In today’s competitive time, it doesn’t take long before strength becomes weakness. Big corporations have fallen victim to their size when they failed to stay abreast with technological advancements in their industry. When they turned a blind eye towards innovation, they lost a chance to stay in business and compete.

At a large European insurer company, the board members were asking questions from management. A competitor known mostly for its online branding had begun to undercut premiums for a number of products in different markets. It had removed agents and was selling online directly to customers using its brand and excellent customer service. Few members of the insurer’s senior staff thought it’s a temporary threat and would abate with time. However, others pointed out that they were losing appeal among the younger customers who were avid users of internet and compared several price-comparison tools. Luckily for the insurer the board decided to hasten up its digital adoption.

It’s easy for an incumbent to look at their strong balance sheets and feel a cushion against the tide of disruption. Thus, the disruption, most often, comes from new entrants rather than incumbents. But incumbents need not fall victim to this digital disruption if they take decisions to adapt in time.

We all know how print media has fallen shattered by a tsunami of digital disruptions. Only few newspapers which adopted digital and identified new rivers of gold (that’s how the old classified ads were called then) are still sailing. Things, however, are far more confusing when one is in the midst of the disruption’s early stages. We all have been witness to how e-retailers like Amazon, Alibaba and Flipkart disrupted the market of brick-and-mortar ones. Similar examples can be found in lodging and travel industries.

So, what’s the secret of those incumbents that do survive and sometimes even thrive? One key aspect is to stay nimble and flexible with an ability to recognize and overcome the typical response (or lack thereof) which is identifiable with a company of their size and position. This mostly means, the dexterity to know when is the right time to react before it’s too late. As Netflix moved from DVDs to streaming, Reed Hastings, the CEO of Netflix, pointed out that most successful organizations fail to offer the new things their customers want because they’re afraid to hurt their core businesses. This is also called the innovator’s dilemma as incumbents find it difficult to distance their companies from something which made them successful in the first place. Hastings simply said,

“Companies rarely die from moving too fast, and they frequently die from moving too slowly.”

It’s easier to connect the dots while looking back but the question is what to do when you are in the middle of it all, under the real-world constraints of running a large company.

Few industries like Banking, Insurance and Retail are already a decade into their industries’ digital transformations. The reality, however, is that most industries are still in early stages of the digital transformation. That’s why the early experiences of media, music, and travel companies can prove so valuable.

Digital transformation not only comprises of building a digital capability but also digital dexterity to turn it into a competitive opportunity. From Starbucks to GE – companies are utilizing digital technologies to redesign their operations and build a competitive advantage. Organizations need to be nimble and flexible to respond to the ever-changing technical and digital disruptions to best serve the customer needs.

Awareness and adoption are two distinct metrics. While awareness is important, it is adoption of a solution that drives an economic engine as it can be monetized. So when do we adopt or reject something? There are five characteristics that influence a person’s decision to adopt or reject an innovation.

  • Relative Advantage over the previous generation product or service
  • Compatibility to assimilate into an existing process
  • Complexity of usage
  • Trialability to assess how likely are users to try and adopt the innovation
  • Observability to find how visible it is to others

It’s also important to realize that sometimes the change itself can be intimidating and it’s only a matter of trial. When organizations and customers see value, they become loyal custodians of digital transformation.