Two worlds of business are colliding. On one side is the world of incumbents, boasting a rich legacy of well-fortified brands and businesses. On the other is the high-velocity world of technology, exemplified by companies like Apple and OpenAI, which has much valuable insight to teach the incumbents. Having lived and worked in both worlds, I discussed three principles in my recent TEDxWalden Pond talk, “Thriving In Turbulent Times,” that can help business leaders grapple with the challenges that accompany this collision and drive their companies toward transformation.

1. Understand mega-trends that shape disruptive forces

The true cause of disruption is a convergence of mega-trends. Some are trends in behavior — what is “it” that people want to pull into their lives? Then there are societal trends — what will society accept or reject? Technology evolves in concert with these trends, not working as the catalyst but rather as an enabler of underway changes that are moving the world to some new normal.  

So rather than immediately training attention on their assets and products, companies need to start with a time for observation, for understanding these mega-trends, and asking crisp questions about the course and speed of forces at work. Formulating the right questions is much more important than pushing for answers at this juncture.

Let’s unpack this a bit with an example. Why is it that electric vehicles (EVs) are so disruptive? I submit: It is the growing consumer desire and global policy trends toward a net-zero and nature-positive future, intersecting with the convenience of buying a car online and having it “serviced” with a software download while it’s sitting in your driveway. There are real inconveniences that need to be addressed to unlock widespread EV growth and adoption, like greater availability of charging stations, but the trend line is predictable.  

Disruptive forces are knowable, then, triggered by mega-trends that can be observed and tracked. The question shifts from “Will disruption happen?” to “When will it hit?” and “Am I prepared, moving on the right course, at the right speed?”

2.  When faced with disruption, small experiments yield large results

When disruptive forces hit and the outcomes seem inevitable — digital wallets, streaming TVs, computerized cars — timing really matters. I’ve often seen a tendency among companies to greet big disruptive potential by swinging for the fences. There’s a logic there: If some new opportunity is truly disruptive, then let’s make sure we don’t under-invest so we’ll be able to thwart competitive threats and/or capture big growth. However, a big swing can exhaust costly resources and management attention too soon, and with underwhelming results. It can dampen enthusiasm and give a false impression that the opportunity wasn’t worthwhile to begin with.

Consider the Insurance industry. In recent years, a number of large life insurance companies have acquired insuretech startups in an effort to stave off growing competition from new tech market entrants. Unfortunately, most of these acquisitions were shut down or later sold amid poor financial performance and reported regulatory issues. Still, while these have been setbacks for insurers , the results weren’t necessarily an indication that the impetus for making the acquisition was misguided.

Unfortunately, too often incumbents overreach in this way, preventing the chance to learn vital knowledge. A more useful approach would be to launch a few well-crafted experiments to test different pathways to the future, and to “learn” about market timing. Here’s where the world of tech provides a playbook that incumbents can put to work, with some modifications. The startup model argues for stage-gates that unlock investment based on building conviction, moving from conviction to confidence and, if appropriate, making a sustained commitment. 

Let’s take the current hot topic of generative artificial intelligence (AI), and AI more generally. What might generative AI mean for your business if you are an incumbent? Does it apply best to customer acquisition or customer service? Complex or routine processes? And should employees adapt their ways of work to embrace new, AI-powered tasks? 

In this example, there is a clear view that AI will reinvent work and create new value. But never confuse a clear view for a short distance. The pace of adoption is less known. Well-crafted experiments can help make sense of the unknown, and help leaders move from conviction to increasing confidence. 

3. Armed with evidence, move forward boldly

With increasing confidence, informed by real data distilled from experiments, it’s time to weaponize your scale advantage and shift from confidence to sustained commitment. It’s time to hold ’em, not fold ’em, and act with grit and tenacity to work through turbulence.  

Here again the world of tech innovation provides a model that incumbents can follow and tailor with their unique advantages. The stage-gate model of tech shifts in intensity and focus as a company builds product traction with real customers. The highest-value concern at the later stages is maintaining laser focus on making the race to materiality. There are useful frameworks for better understanding this race (in particular by my former partner and friend Geoff Moore, the guru of chasm-crossing and playing zones to win). The challenge here is to separate the motion of racing to scale advantage from both business as usual and the earlier test-and-learn, bob-and-weave experimentation. Neither of those motions are purpose-built for transformation journeys.

Leaders of late-stage ventures either morph from their early-stage selves or get swapped out for a near IPO leader who is passionate about scaling a business that has proven it has products and solutions worthy of outsize customer attention. Now it is time to fortify the lead, build an enduring company, with as much momentum as possible.

At this stage of maturity — close but not quite there — the magic ingredient isn’t brilliant analytics or disciplined experimentation. It’s the lock-jawed, doubled-down, unwavering focus on shifting customers’ attention from the old way to the new way, and resetting the competitive game around better solutions and new rules. Leaders of incumbent companies should seize this moment to apply their scale advantages — customer reach, brand, balance sheet, geographic presence — all things that it will take years for a late-stage startup to achieve.