Businesses must disrupt now, or fall by the wayside

WE are facing tough times - and not just because there are signs of economic slowdown everywhere. As digitisation reshapes business norms, companies from every industry sector are challenged to keep pace with ever-changing consumer social behaviour. For all its transformative power, digital technology has also brought about disruption, turning the global economy on its head and bringing to heel traditional business models and processes.

John Chambers, the former CEO of Cisco, remarked that companies that were lackadaisical about digital transformation would not exist in a meaningful way in 10 years' time. Andy Penn, CEO of Telstra, also highlighted that it's only a matter of time before disruptors such as Netflix and Uber are themselves disrupted by transforming traditional competitors and new startups.

Where the average tenure of companies was 33 years back in 1965, we are now confronted with forecasts that put the average lifespan of companies on the S&P 500 at just 14 years by 2026. Based on these predictions by Innosight, it would mean that about half of today's S&P 500 companies will be replaced over the next 10 years.