Looking back upon my long career, it’s frankly sobering how many once powerful IT companies are no longer around or are shadows of their former selves, e,g, Digital, Wang, Sun Microsystems, BlackBerry. The forces of disruption might have been more powerful in the fast-changing IT industry, but no industry has been immune. In less than two decades, the global recorded music industry has lost over half its revenues, while the drop in newspaper advertising revenue in the US has been even steeper. Retail has undergone major changes with the rise of e-commerce, as has telecommunications with the transition to mobile phones.
Why have so many companies been done in by disruptive technological and market changes? Is it that in spite of all their efforts in strategy formulation, their management was unable to anticipate them and were caught by surprise? Or it is that, as if actors in a kind of Greek tragedy, they see the changes coming and understand what needs to be done, but are somehow unable to make the needed strategic and cultural transformations?
“Evolutionary fitness of organizations is determined by their ability to effectively respond to environmental changes,” write Leo Tilman and Charles Jacoby in their recently published book Agility: How to Navigate the Unknown and Seize Opportunity in a World of Disruption. “Extinctions generally follow a familiar pattern. Environmental signals - both positive and negative - are undetected or ignored. Leaders fail to recognize the new reality and accept it for what it is. No viable strategic vision for the new environment is developed. Instead, a myriad of tactical activities is deployed, without amounting to a coherent strategy. Existential risks remain hidden until it’s too late.”
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