Is the Threat of Digital Disruption Overhyped?

In a recent short essay titled “Survival Skills for a Digital World,” which appeared in our fall 2017 issue, MIT Sloan Management Review editor in chief Paul Michelman wrote that today’s managers need “to embrace the demands of change.” Given the rate of change and the extent to which business environments are shifting as a result of digital technologies, Michelman noted that it’s helpful for businesspeople to accept change as a constant. “The kind of transformation we are experiencing in business today isn’t easy for anyone,” he wrote. “However, once you accept the truth that change is ongoing, change becomes more about opportunity and less about challenge.”

One MIT SMR subscriber had a different view. Responding to Michelman’s essay, reader Tony Pavone, director of process engineering at IHS Markit Ltd., a global information services company, wrote that he wished MIT Sloan Management Review and others would move past what he perceives as an “obsession with radical transformation, chaotic disruption, and lust for digital tools.” Pavone further argued that, “for the most part, organizations that require radical anything are failures to me because they haven’t kept the pulse of their customers, haven’t benchmarked their competitors, and haven’t stayed in tune with the tools that allow [them] to do things better.” Neither capabilities nor deficiencies, he noted, are created or destroyed overnight. Winning companies, Pavone offered, “mind their knitting” and may often do what their competitors do — “but do it measurably better.”

It’s true that pressures to change don’t affect every industry with equal force. A recent McKinsey & Co. survey, for example, found that executives of companies in industries such as telecommunications and media and entertainment sensed greater instability than those in, say, basic materials. That seems to suggest that some companies will have more time to adjust to the future than others. Moreover, as Joshua S. Gans, author of a 2016 MIT SMR article titled “Keep Calm and Manage Disruption,” has argued, for many companies, fears of quick disruption are overblown.

So how does this jibe with Michelman’s view? Although the question about how fast companies need to respond to technology-induced change is complicated, we asked Michelman to address Pavone’s comments. Here’s what he wrote:

“At the strategic level, Mr. Pavone’s comments are well-taken.