The Four Stages of Digital Disruption CXOs Should Know

It is easy for people within an industry to see something repeated quite often as clichéd, boring, hyped or done-to-death. But when it comes to the double dose of “Digital Disruption” (with two heavyweight words wrestling alongside), there is usually a lot of discomfort as well.

And while one often gets to hear the names of the usual “culprits”—the Ubers and Olas, the Airbnbs, the Facebooks of the world—who are causing or have caused a lot of disruption in the market, it is good to come across something that helps the existing enterprises or the incumbents chart digital territory with greater confidence.

McKinsey’s aptly titled “An incumbent’s guide to digital disruption” offers a few silver linings and plenty of hope. The introduction lures you in with these powerful words: “Incumbents needn’t be victims of disruption if they recognize the crucial thresholds in their life cycle, and act in time.”

It goes on to describe in interesting detail the four stages of disruption from an incumbent’s perspective, the barriers to overcome, and the choices and responses needed at each stage.

The four stages are identified in self-explanatory terms—Stage one: Signals amidst the noise; Stage two: Change takes hold; Stage three: The inevitable transformation; and Stage four: Adapting to the new normal.

The authors of the McKinsey article, Chris Bradley and Clayton O’Toole, also help the incumbent organizations in visualization of their current stage on an S-curve and mapping their moves and barriers along various inflection points on the graph.

The authors pepper these stages with real-life examples and insights, which makes for useful reading for companies that are in the midst of their own digital journeys and can take cues from those who have been there or done that (or not done that, for that matter).

Sample a few: as long as 10 years back, Norwegian media group Schibsted made the bold move to offer classifieds online—for free; Netflix “disrupted itself” in 2011 by shifting its focus from DVD rentals to online streaming; and Grocery retailer Aldi is said to have disrupted numerous incumbents globally with its low-price model.

You can read the full McKinsey article here or download an assessment guide that helps an organization in ascertaining its position in the digital journey by clicking this link.

It is always better to disrupt yourself than let someone else do it!