Harvard Business Review

December 14, 2021

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Survive and Thrive as an Incumbent

From Daniel McGinn
Executive Editor, Harvard Business Review

Thirty years ago last summer, I took a summer internship at a magazine, and I’ve worked in this industry ever since. To say the business has changed since then is an understatement: As print advertising declined and free access to online articles grew, magazines needed to change or die — and many iconic titles have gone away. Harvard Business Review has adapted and thrived — 2022 marks its centennial — but nonetheless, spending one’s career in an industry facing disruption creates some anxious moments.

Should every company experience this kind of anxiety? In our Spotlight package, Adapting to nondigital Disruption, several authors suggest some of this fear is overblown. In How Incumbents Survive and Thrive, London Business School professor Julian Birkinshaw shares data that show how much nondigital disruption is oversold — Kodak and Blockbuster are outliers. And in The Strategic Advantage of Incumbency, Thomas W. Malnight and Ivy Buche recount how a group of older “legacy” companies have found ways to turn their size and heritage into advantages, not liabilities.

Another article in this issue focuses on a different kind of heritage: Your family background. In Family Ghosts in the Executive Suite, Deborah Ancona and Dennis N.T. Perkins examine how the family dynamics people experience during childhood play a role in how they navigate work and careers. They say leaders benefit by recognizing these family ghosts and how they affect work relationships — and then working to counteract the negative behaviors that may stem from one’s upbringing.

With the New Year approaching, many people are thinking about other positive changes they might make to improve themselves. In The “New You” Business, Lance A. Bettencourt and coauthors describe the strategy driving transformation businesses — companies working in spaces such as education, spirituality, health, and fitness that promise a process that fundamentally changes you.

After the challenges of the past year (or two), we wish you only positive changes in 2022 — and thanks for reading.

Daniel McGinn
Executive Editor

In the Issue:

How Incumbents Survive and Thrive

by Julian Birkinshaw

While many believe that technological disruption has been rampant for decades, the internet has actually caused much less creative destruction than people think. What else is commonly misunderstood? The best response to disrupters. This piece delves into three viable strategies: doubling down on your existing strengths (as Disney did); retrenching to ensure your survival (as banks are doing); and moving into new opportunities (as Fuji did). Each strategy has benefits and risks, and your circumstances determine which one you should pursue.

The Strategic Advantage of Incumbency

by Thomas W. Malnight and Ivy Buche

For most of the 20th century, size, longevity, and a large market share were seen as assets in business. Then they began to be viewed as vulnerabilities, putting many companies in a defensive stance. Successful incumbents, however, convert these traits into market power, lasting relationships, and deep insights to create new opportunities and ward off upstarts. Three capabilities in particular give established firms an edge: the ability to manage complexity, the ability to focus on the long term, and the ability to leverage customers’ trust in new arenas. This article describes how companies like Hindustan Unilever Limited, Deere and Company, and A.P. Møller–Maersk have prevailed in these areas.

Family Ghosts in the Executive Suite

by Deborah Ancona and Dennis N.T. Perkins

Professional growth can get stymied for all sorts of reasons. But one of the most important is rarely discussed: You’re contending with ghosts from your past. Early in life, family dynamics give rise to many fundamental behaviors and attitudes toward authority, mastery, and identity. When similar dynamics emerge at work, people often revert to childhood patterns. To enable change in the personal realm, psychologists often encourage clients to consider the nature of their original family system. This approach can — and should — be applied at work too. This article delves into six elements of family dynamics that commonly play out in the workplace.

The “New You” Business

by Lance A. Bettencourt et al.

All too often fitness centers, medical providers, colleges, and organizations in many other industries seek to distinguish themselves only on the quality, convenience, and experience of what they sell. But those things matter only as means to the ends that people seek. Enterprises should recognize the economic opportunity offered by a "transformation" business, in which consumers come to them with a desire to improve some fundamental aspect of their lives. Even though we’re all filled with hopes, aims, and ambitions, significant change is incredibly hard to accomplish on our own. This article offers an approach to designing a transformation business.

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