How Incumbents Survive and Thrive

Birkinshaw, J (2022) How Incumbents Survive and Thrive. Harvard Business Review, 100 (1-2). pp. 36-42. ISSN 0017-8012

Abstract

Research on the world’s biggest companies shows that digital disruption is less destructive than you might think.

While many believe that technological disruption has been rampant for decades, the internet has actually caused much less creative destruction than people think. An analysis of the Fortune 500 and the Global 500, in fact, reveals that most sectors have been surprisingly stable over the past 25 years. Very few firms on those lists today were launched after 1995.

What else is misunderstood? The best response to disrupters. The default is to fight back with a new digital unit or a transformation. But there are three other viable strategies: doubling down on your existing strengths (as Disney did); retrenching to ensure your survival (as banks are doing); and moving into new opportunities (as Fuji did). Each strategy has benefits and risks, and your circumstances determine which one you should pursue.

This article won the Harvard Business Review (HBR) Prize for best article published in 2022