What most people don’t realise is that these painful examples are the exceptions, not the rule. The vast majority of incumbents find some path to survival, even when faced with a really disruptive technology.
Sometimes, the new technology becomes good enough for adoption by the mainstream market and renders the old technology obsolete. Or, the new technology matures to a point that it is attractive to one segment of the market but not others, so the two can co-exist. In trade publishing, for example, e-books can co-exist with paper books. Online shopping co-exists with retail shopping. Incumbents have a range of different tactics available to them in response to disruption, and trying to fight back directly may not be the best idea.
Kodak’s major competitor, Fujifilm, diversified – adapting its existing in-house technologies to meet the needs of future markets. Likewise, the educational publisher Pearson diversified into adjacent markets, applying its expertise to grow in areas such as professional certification, assessment, language learning, work-based learning and virtual schooling – surviving disruption and going on to enjoy a resurgence.
Three things to consider when you’re facing digital disruption
There is no simple formula for incumbents when facing digital disruption – every industry has its own dynamic and circumstances – but in our experience there are three interlocking elements to the puzzle:
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Structure: what is the right organising model for addressing a disruptive threat?
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Mindset: how should you and your colleagues think about the threat?
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Identity: how does it affect your company’s purpose?
The trick is to simultaneously keep in mind the possibility that your industry is going to be radically transformed, while also keeping in mind the probability that in fact it will be just fine. A clear sense of identity, or “North Star”, will help provide some consistency around the difficult choices you need to make.
Knowing how and when to respond to new technologies is an obvious challenge. For most companies working their way through a major digital transformation, the old Facebook approach of “moving fast and breaking things” is not the way to go. Your customers won’t thank you for breaking things they value and rely on. Rather, an iterative approach to strategic change enables you to learn rather than guessing.
Move too quickly and it will cost you. In the entertainment industry, Time Warner’s $165 billion merger with AOL in 2000 was notoriously ill-fated. In energy, British Petroleum (BP) launched a renewables strategy, “Beyond Petroleum”, under then-CEO John Browne in the early 2000s, but it was too soon and they had to close it down, after spending billions of dollars. Bernard Looney, another of BP’s CEOs, tried a similar approach when he took the reins in 2020. Again, in February 2025, the company found itself having to backtrack.
How to respond to a new technology or competitor
Essentially, you have four options when responding to a new technology or competitor: double down, fight back, retrench or migrate away. We go into more detail on each of these in our new book, Resurgent: How Established Organizations Can Fight Back and Thrive in an Age of Digital Transformation. We also delve deep into business models, ways of working and infrastructure (de-jargonised, so you will be able to hold your CIO to account and make sure they understand the business consequences of their IT investment plans, rather than having to blindly trust their judgement).
Whatever your response to disruption, you are confronting an uncertain future. You need a clear vision of what a digital-first future for your company looks like, and you need to drive consistently towards that – bearing in mind that the pacing of that digital shift will depend in part on your customers’ behaviour.
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