We fear tech disruption rather than embrace it, says report

So what's the solution? Partner with the opposition and focus on silver users, not millennials, says the EIU.

More businesses fear digital transformation and disruption than are ready for it, according to a new report, which brings together the views of 1,000 business leaders worldwide, mostly in sectors that have been most affected, such as healthcare, financial services, and energy.

The report, Thriving Through Disruption, was published today by the Economist Intelligence Unit. It found that six out of ten leaders see disruption as a threat rather than an opportunity, with the same number saying that their organisations react to disruption rather than drive or influence it.

Despite this, 60% are also investing more money in their disruption strategies, and the same percentage have created, or are considering creating, a new role to focus exclusively on managing disruptive change.

It's not all about youth and tech
Contrary to accepted wisdom, the EIU says that technology is not to blame. "Technological change is not the main source of disruption everywhere, according to the survey.

"In heavily regulated sectors, such as financial services and energy, regulatory changes do more to catalyse disruption than other factors, according to respondents. Changes in customer behaviour come a close second (and first for healthcare respondents)."

However, technology advances are never far from the surface: they do much to influence regulatory reviews and stimulate new patterns of customer behaviour, says the report.

Companies should also beware of assuming that technology disruption goes hand in hand with young 'millennial' customers, the demographic that many organisations are obsessed with understanding and attracting.

The survey reveals that it is the "silver market" (those aged over 60) which is most likely to be disruptive.

Healthcare executives are certain of this, says the report: 86% believe that the older generation is a greater source of disruptive change than millennial customers or emergent technologies, such as data analytics or the Internet of Things.

Elderly populations are booming in many countries, such as the UK, the US, and Japan, and so working out how to engage with and care for ageing people should be motivating far more organisations, many of which focus too much on the young's ability to disrupt.

Love your enemy
But what can organisations do, other than simply worrying about change and reacting when it's too late?

Partnership models, such as working with rivals and peers are one counter-intuitive answer, says the EIU.

Nearly one-third of the surveyed organisations have formed strategic alliances with rivals in their sector, while one-quarter have partnered with companies in different sectors, to capitalise on the increasing convergence of many business types around shared technologies.

Many companies are adopting a "convergence mindset", observed the EIU.

"If you can't beat them, join them" is another successful strategy, says the report: one-fifth of organisations have engaged or partnered with disruptive start-ups rather than try to beat them at their own game.

But by far the most important strategy is for business leaders to articulate a strong sense of purpose and vision, if organisations are to be the disruptors rather than the disrupted.

"In innovative companies, employees want to innovate continuously rather than being forced to as part of a job," says the report. "This passion is nurtured by a strong and clearly stated sense of organisational purpose that elicits greater engagement than narrow commercial goals.

"Internal competitions, ‘deep work' spaces, and material incentives all contribute, but for respondents to this survey, management's ability to articulate the organisation's purpose does more to foster a culture of disruptive innovation than any other factor."