The last century has seen a closure of multiple million-dollar corporations due to their inability to keep up with the market trends. For those of us who belong to the GenZ, Kodak was a household name and we all grew up using its analog cameras. Sadly, the company no longer exists. The reason behind it was the reluctance of the owners to move to digital cameras for photography. The result: closure of one of pioneers of the photography business. This is an excellent example of disruptive technology and the failure to adapt to it which led to the fall of 130-year old Kodak. While Kodak is a story of collapse, Canon is a success story in itself. 

In 1942, Joseph Schumpeter, one of the most celebrated economists on the 20th century came up with the theory of dynamic economic growth, also known as ‘Creative Destruction’. In this theory, Schumpeter described the need for continuously evolving economic structures from within, which could be brought about by destroying old ones and structuring new ones in their place. Today, Creative Destruction has spread its branches across each and every facet of a successful business.

Today, the industry is moving from mechanization to digitization. Traditional companies like Cisco have undergone a massive change in their products to match up to the latest trends in technology. From the humble router to the revolutionary wireless LAN, VPN, VOIP and WebEx, Cisco is a name that is synonymous with all things networking. They were successful in tapping the immense potential of the internet and developing their products accordingly.

                Sony, in the 1980s and 1990s was the leader in the electronics industry. The Sony Walkman was a rage all over. Sony had the plan for an MP3 player in the pipeline but kept it on hold, in order to leverage the profits out of Walkman to the fullest. And this is where Apple gained. They launched their iPOD in 2001 and Sony failed to catch up as they were unsuccessful in predicting the market trend and demands. Since then, it has been a successful upward climb for Apple.

                While in the case of Apple, Steve Jobs came up with disruptive technology such as touch screen phones and MP3 players, they were also big on quality and customer satisfaction. They created a brand for themselves and a huge customer base world-wide. It is their ability to look ahead into the future and create demand by implementing disruptive technology that helps them stay ahead of competition and more importantly, flourish.

While everything is just a mouse-click away, the service market is at an awakening. It is not only important to adapt your product according to the technological trends to survive, it is equally important to cater to the wants, needs and expectations of customers. After all, the sole purpose of a business is to earn revenue, which is possible only if customers are satisfied.

                A large number of companies are fighting to survive the digital wave and according to Cisco’s outgoing CEO John Chambers, 40% of the companies that exist today will cease to exist in the next 10 years. While the numbers a grappling, one may think, what is the secret to survival in an ever-changing and dynamic market that is characterized by VUCA.

                The secret lies not only in changing the products or business models, it lies in internalizing the change.  While the process of adaptation can lead to an economic downturn and confusion in the workforce, it is important to ensure clear internal communication so that people are aware of what needs to be achieved. Some companies suffer from a ‘Cultural Lock-in’. They tend to cling to their most widely selling product and adhere to old practices, reluctant to adapt to the change even in the face of imminent threat. A Cultural Lock-in is essentially the human perspective of a firm’s inability to keep up with market trends.

                While the decisions are made at the top level, it is important that these decisions translate to each and every individual to the other end. The Leadership in a company must champion the cause of change and it eventually creates a sense of faith and belief among the employees. It is a culture of change that companies need to adopt, along with technological advancement. An organization that believes in its purpose is one that can survive the market in its tumultuous state.

                While Cisco has grown inorganically over the years, its enterprise and service provider divisions were completely disjoint, working in silos.  Cisco decided to undergo the painful process of reorganizing its internal structure over a period of three long years, during which they had to let go a large number of leader as well. They internalized the process of change to the top and they believe in leading by example.

                Another facet that needs to be taken care of is making sure that the organization has the right kind of people, who will fit into a culture of constant change. This can be achieved by hiring the right kind of people. Firms need to look for people who are motivated, flexible and driven to perform. From the firm's perspective, they should provide ample opportunities to employees to grow by empowering them and create an environment of collaboration.

                With organizations developing the ability to look into the future and internalizing the process of change in its products as well as people, it may be possible to ride the wave of creative destruction and disruptive markets and emerge jubilant.