Two approaches to "self-disrupt"

As industries are disrupted by new technologies and approaches, should you adapt to a new model fast, or set up parallel processes? We look at two case studies.

Drone flying in evening sky

As the Fourth Industrial Revolution kicks in, many companies are trying to become a smart connected business by building innovation labs and acquiring start-ups. But they have not been able to create sustainable success in the market.

Problems occur when a company acquires start-ups and tries to scale them on a platform that was never intended to sustain a smart connected business. They end up killing the innovation they bought.

Success requires a fundamental operational shift. The challenge comes in deciding the best approach: should you try to maintain two operating models in parallel, one for your core traditional business and one for your new approach, or should you attempt a flash cutover to an all-new model for both your legacy and your new businesses?

Both approaches can work:

This disruptive transformation of industries will be at least as big a change as the industrial revolution and the internet. There are common challenges and early patterns of how to accelerate the transformation and build the capabilities for success.

Regardless of approach, both companies in our case studies made strong commitments to the new business model and created the right platform to supports its launch, growth and scale.

So far, success seems to be coming to the bold, those who are willing to explore the full extent of the necessary changes and take on the core business transformation directly. The key is finding the right model to enable innovation to thrive for your business – which is where EY’s smart connected business reference design model can help.

 

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