Why the Inertia Around Business Change?

sue 3 in textWhy do some people, when faced with a mandatory hurricane evacuation, refuse to leave their homes?

They might simply be, well, nuts. Or, according to Dr. Keith Ablow—a psychiatrist and frequent contributor to the New York Times— they may be experiencing something called “reflex denial”: they have trouble believing that a rare, highly dramatic event could actually be happening to them.

Sue Todd finds the reflex denial phenomenon an apt metaphor for the way leaders shut their eyes to the increasingly breakneck speed of business change. In the past, leaders had plenty of time to consider the impact of disruption, she says. They could watch and evaluate early adopters. But they can no longer afford this luxury because change itself has changed. Todd cites evidence such as:

  • According to Columbia Business School professor Rita McGrath in the Harvard Business Review Blog Network, the pace of technology adoption is faster than ever before. For example, it took decades for the telephone to reach 50% of households, beginning before 1900.  But it took five years or less for cellphones to accomplish the same penetration in 1990.
  • Diego Comin, a professor of economics at Dartmouth, and Bart Hobijn, a senior research advisor at the San Francisco Federal Reserve Bank, validate that newer technologies are being adopted at a faster pace based on two centuries of data. And they attribute the “miracle” of fast development in Japan and the so-called East Asian Tiger countries to that region’s increasingly quick adoption of new technologies.
  • Malcolm Frank, an executive vice president at Cognizant and author of Code Halos, provides a striking visual of technological change by comparing photos of the crowd at the Vatican’s 2005 and 2013 papal announcements. In the 2005 photo, a lone cell phone can be seen in the crowd. In the 2013 photo, the scene is ablaze with the light of hundreds of smartphones and tablets.

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