Celebrate the legacy of traditional firms

Abstract

The whole notion of digital disruption, however insightful and informative, has simply been blown out of proportion. Too much emphasis has been placed on the potential threat and the disruptive side, causing many traditional business firms to unnecessarily worry and panic, engaging in either excessive reactions or inappropriate responses. In fact, to many traditional business firms, digital transformation might not be disruptive at all. The unique characteristics of many traditional firms enable them to better withstand the onslaught brought by digital transformation, which, on the other hand, may well be substantively and significantly enhancing their value propositions. Traditional firms should ask themselves two fundamental questions in dealing with digital transformation. First, what makes our business robust and resilient enough to withstand digital disruption? Second, what could we do to enhance our value proposition facing digital transformation? This article aims to help firms address these two questions. First, through a series of four tests (Product, Presence, Participation, and Privilege), it dissects the profile of the firms that will most likely withstand the disruption of digital transformation. Second, it outlines the courses of action (Conserve, Co-opt, Contrast, and Celebrate) through which the firms’ value could be enhanced.