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