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  • Writer's pictureOzzie Paez

Exceptional Transformation

Coping with disruptive technological innovations is a daunting challenge for established businesses and institutions. Disruptions undermine the value of existing structures, experience, and historical precedent, often without clear, proven alternatives. They introduce new opportunities, risks, and uncertainties that challenge leadership teams’ strategic thinking and willingness to change. Incumbents often respond by stripping innovative elements and molding the rest to fit existing paradigms, cultures, and structures.

Harvard’s Clayton Christensen, the dean of disruptive business strategy, described this process as transforming disruptive innovations into sustaining innovations. Innovative technologies that sustain existing operations deliver evolutionary benefits like cost savings, increased productivity, and improved financial performance. They can also create barriers to change by validating legacy thinking and outdated strategic trajectories. Christensen asserted that internal barriers to disruptive technological innovations make it almost impossible for organizations to disrupt themselves.

There are exceptions and the most remarkable was the US Navy’s transformation after the Japanese destroyed its battleship fleet at Pearl Harbor on December 7, 1941. Just six months later, the Navy’s carrier fleet stopped Japan’s string of victories at the Battle of the Coral Sea (May 4-8, 1942) and gained permanent dominance at the Battle of Midway (June 4-7, 1942). Carriers quickly became and remain the premier capital ships of the modern US Navy. This is an exceptional case in which a large, very traditional organization coped, adapted, and exploited what should have been insurmountable catastrophic disruptions.

There have been similar cases of private organizations effectively adapting and transforming in the face of disruptive technological innovations. Their scarcity highlights the difficulties. Success in this context requires rare combinations of strategically minded leadership, adaptable management, and quick, effective execution of transformational initiatives. It sounds attainable but is in fact remarkably difficult. Leadership teams facing these daunting challenges can learn much and find inspiration in the US Navy’s remarkably fast, effective transformation more than eighty years ago.

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