Digitally-driven disruption is playing out in nearly every sector. Executives in incumbent organisations experience a range of emotions as disruption plays out. Here’s a typical sequence:
- Intrigue – ‘We are a leader in our sector and expect to stay that way. There are some interesting new digital offerings springing up, perhaps we can learn from them’
- Denial – ‘Some of those new digital offerings are getting to scale, but we don’t really need to worry about it as we don’t see our sales or margins being impacted’
- Anxiety – ‘We are in trouble. We are losing business to new (or retooled) competitors and we are late responding. We need to invest at scale just as our cash flow is falling…our investors are not going to like this’
- Optimism – ‘We now have a clear digital strategy. We can reshape our business model, grow sales, improve efficiency….and beat our competitors’
- Frustration – ‘We are moving too slowly. We can’t secure the digital talent we need, our legacy systems are slowing us down and our culture is bureaucratic. Our competitors are moving faster than we are’
- Excitement – ‘We can win. We have proved we can deliver on our digital agenda and performance is improving again. Competitors are not standing still, so we have to keep innovating, delivering and improving our agility’
To some extent this sequence is inevitable and necessary. Some organisations are able to avoid the Denial phase by taking early action, underpinned by strong strategy and innovation processes. Some also avoid the Frustration phase by investing early in new capabilities (e.g., software engineering, advanced analytics) and a more agile culture. Of course some organisations get trapped in Denial or Frustration for so long that Excitement never arrives.
As any psychologist will tell you, the first step in managing your emotions is to listen to them. Executives need to spend time feeling, not just thinking.