BREAKING THROUGH DISRUPTION 28 Industries in the Volatility period of disruption feel the pinch. Financial performance has dropped off, as fault lines that developed amongst incumbents have been exploited by disruptors who are eating their market share. And there is little sign of abatement—the future looks equally difficult as inefficiencies and underinvestment in innovation are exposed. They face difficult prospects, requiring them to make radical choices in their core business. In the Retail sector, ever-growing platform-based competition has forced some hard choices. The historically slow innovation displayed by traditional retail players is changing—$5 billion is expected to be spent on AI technology in 2019. 18 But more than a digital veneer is needed. Many industries here realize it’s time for a rapid re- think. In a separate study we conducted, we found that 80 percent of companies in the Retail and CG&S sectors had altered their strategy as a consequence of disruption. 19 Some of the incumbents in this disruption period show tenacity, while others jump the gun and try to do too much too soon. Leading companies juggle the twin challenges of prolonging the lifespan of their legacy business while also investing in new areas. The former requires a restructuring that supports continual internal disruption in order to mitigate external threats. Establish a specialized entity such as an “innovation lab” or a “digital factory” in order to bring meaningful innovation into your established business.