2018: The Empire Strikes Back

By Professor Alan W Brown

The past few years have been dominated by digital disruption in an economy that is ever more unpredictable. To a large extent, incumbent business organization dominating their markets have been struggling to evolve at the speed demanded by their customers, partners, and prospects. This has encouraged a wide range of startup businesses, moving quickly, experimenting widely, and bringing a diverse set of offerings to market. This period of change has been dominated by the adage: it is not the large that eat the small, but the fast that eat the slow.

However, it looks like 2018 may be the year when we see the incumbents strike back. Rather than receding to lick their wounds, most established businesses have spent the last few months intensively redesigning many aspects of their product portfolios, organizational structures, operating models, and skills base. Whether driven organically or via external acquisition, incumbents in domains as diverse as retail, financial services, infrastructure, and utilities have been making significant moves to become more effective in the digital era.  This redesign is highlighted in three particular areas of their business:

  • Open up – connecting with customers and partners to understand their needs, gain benefit from their wide market reach, and ensure a more transparent approach to business operations.
  • Join up – bringing all elements of the business together to take advantage of the large customer base in order to derive meaningful insights into product use, create internal markets, and optimize partner ecosystems.
  • Smarten up – shortening the distance between opportunity and deployment by adopting practices and technologies that deepen customer insight, and support more experimentation across the business.


Whether by acquisition or internal growth, large established organizations have invested heavily in broadening their existing product offerings through greater deployment of rapidly maturing AI and machine learning capabilities, and by diversifying their portfolios with complementary online offerings. Thus incumbents are executing a dual digital transformation strategy to reposition current offerings as more intelligent and efficient, while creating new avenues for growth based on distinct value propositions. Their ability to manage such an ambidextrous strategy will ultimately be the determining factor in the organization’s successful transition to a digital economy.

The volatility being faced by business in 2018 looks certain to continue. But, change brings opportunity. Not just to the new, agile organizations unencumbered by any legacy, but also to incumbents determined to leverage their position to build for the future. May the force be with you!


Share this Post!

About the Author : Kris Henley

Communications and Outreach for Surrey Business School's Centre for the Digital Economy, a newly-founded research centre to explore the implications of the Digital Economy for business, government and society.