Two worlds of business are colliding: the high-velocity world of technology – often associated with the West Coast, Apple, GOOG, OpenAI; and the world of incumbents with well-fortified brands and businesses. Having lived and worked in both worlds, I discussed three principles that can help business leaders grapple with the challenges that accompany the collision and drive their companies toward transformation, in my recent TEDxWalden Pond talkIn today’s world, corporate innovation and digital transformation are accelerating, necessitating new leadership and management approaches. For leaders grappling with business transformation, I recommend watching my recent TEDxWalden Pond talk, “Thriving In Turbulent Times.” 

Disruption is never just about technology

The true cause of disruption is a collision 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? — which are often enforced through regulation. The evolution of technology works in lockstep with these trends, not as the sole driver but a tailwind that tips the world to some new normal. 

This is 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.

Let’s unpack this a bit. Why is it that electric vehicles (EVs) are so disruptive? I submit: The growing 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. 

So then, disruptive forces are knowable, 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?” 

Small steps, systematically taken, lead to big things

When disruptive forces hit and the outcomes seem inevitable— digital wallets; streaming TVs, computerized cars — timing really matters.  I’ve often seen a tendency 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 expend costly resources and management attention too soon, and with underwhelming results. A swing and a miss can dampen enthusiasm and lead to false negatives.

A more useful approach could be 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, and moving from conviction to confidence and, if appropriate, sustained commitment. 

Let’s take the current hot topic, generative artificial intelligence, 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 well-known. Well-crafted experiments can make the unknown better known, and help leaders move from conviction to increasing confidence. 

Know when to hold ’em, know when to fold ’em

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 them, not fold them, and act with grit and tenacity to work through turbulence to a better future. 

Here again the world of tech innovation provides a model that incumbents can tune 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 high order bit at a later stage is much more about laser focus on making the race to materiality. There are useful frameworks for unpacking 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 decouple the motion of racing to scale advantage from *both* BAU (business as usual) *and* the test-and-learn, bob-and-weave experimentation that makes sesnse early on. 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 to build out product(s) that meet underserved customer needs. 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, laser focus on shifting customers’ attention from “old way to new way,” and resetting the competitive game around a new set of principles.