The Industries That Are Being Disrupted the Most by Digital


Harvard Business Review | March 21, 2016

Harvard Business Review published a bylined article written by Russell Reynolds Associates' Rhys Grossman titled "The Industries That Are Being Disrupted the Most by Digital." The piece looks at how digital is transforming organizations and how some leaders are struggling to set a digital strategy. The article is excerpted below.

We’re at a critical time for the digital economy. Digital is no longer the shiny front end of the organization – it’s integrated into every aspect of today’s companies. As digital technologies continue to transform the economy, many leaders are struggling to set a digital strategy, shift organizational structures, and remove the barriers that are keeping them from maximizing the potential impact of new digital technologies.

Every year, Russell Reynolds Associates surveys more than 2,000 C-level executives on the impact, structure, barriers, and enablers of digital technologies across 15 industries. The barometer below shows the percentage of executives surveyed who responded that their business would be moderately or massively disrupted by digital in the next 12 months, broken down by industry.


Unsurprisingly, the most disrupted organizations were B2C, with media being the most disrupted and telecoms and consumer financial services close behind.

90% of these organizations profess to having a digital strategy in place. But the sheer pace of change has created a skills gap, which is stopping many of these organizations from moving more quickly. Just over half of the respondents answered “yes” to the question “Do you have the right people to define your digital strategy?” It might be hard for people in HR to hear, but only 20% of those who responded said that their HR function was enabling them to transform, ranking them even lower than finance — an area not exactly known for its agility.

The most disrupted industries typically suffer from a perfect storm of two forces. First, low barriers to entry into these sectors lead to more agile competition. Secondly, they have large legacy business models which often generate the majority of their revenue. These organizations, therefore, have embedded cultural and organizational challenges when it comes to changing at the pace required.

At the other end of the spectrum, the industries that are least disrupted often have perceived higher barriers to entry, and a smaller part of their business that can be digitized. They are less affected, but not immune. Advances like 3D printing and EdX, the joint venture between MIT and Harvard, mean that even industrial production and education are seeing disruption, and are also having their own incumbents lead the disruption.

So what can business leaders be doing to meet the coming changes head-on? There are three levers organizations can pull to keep pace: catalytic roles; culture; and commitment.

To read the full article, click here.

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The Industries That Are Being Disrupted the Most by Digital