Bookshelf: ‘Digital Vortex’ is a Digital Playbook for Incumbents

Most business literature celebrates disrupters, but what should “incumbent” companies do to stay ahead of new competitors? How can they leverage digital capabilities and trends to steer themselves into the next generation?

These are the questions addressed by a Cisco Initiatives/IMD team in a new book, “Digital Vortex: How Today’s Market Leaders Can Beat Disruptive Competitors At Their Own Game.” The book, written by Jeff Loucks, James Macaulay, Andy Noronha and Michael Wade, is grounded on a survey of almost 1000 business leaders.

Of course, we all remember Clayton Christensen’s evangelical plea at the dawn of digital disruption: incumbents should build a separate company that would have its own culture, priorities and sales goals.

But 20+ years into the digital revolution, the authors smartly note that the digital revolution requires more of a long-term strategy that recognizes the different stages and impacts of disruption. There is no reason to leave money on the table of functioning, still profitable units; and there are multiple strategies (buy, build, partner, retreat) to leverage existing strengths. “It’s the Value, Not the Value Chain,” note the authors.

The real question is whether they are dealing with “Value Vampires” that drain the life out of a business, or a “Value Vacancy” that potentially represents new opportunities. Target’s partnership with Harry’s mail-order razors, for instance, represents a decision to team with an online brand that will cut into its own in-store razor sales, but adds a new audience segment that would otherwise go elsewhere.

Digital Vortex is not specifically focused on technology or media and entertainment — the #1 and #2 industries most susceptible to disruption. Moreover, a lot of the book covers familiar ground. But it provides useful, in-depth context to many of the issues faced by the larger incumbents.

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