What Got You Here Will Leave You Here: Driving Growth in Legacy Firms

Organizations today face an era defined by disruption. Driven by a series of mega-forces, including the accelerating pace of change, exponential impact of technology, and the globalization of opportunity and access—disruption is reshaping industries, economies, and societies at large. It is no longer confined to start-ups or technology-driven giants; it cuts across all domains, demanding that even long-established incumbents fundamentally rethink how they create value.

For many legacy firms, the challenge is existential. They must ask: what is the brilliance of our legacy, who are we today, and who must we become to thrive in exponential times? These questions go far beyond incremental innovation. They demand reinvention of business models, management practices, and organizational mindsets. The dangers of complacency and comfort are severe, as the well-known downfall of Kodak illustrates. By contrast, Fujifilm succeeded because leadership embraced disruption, posed uncomfortable questions, and diversified boldly.

The Rate of Change Isn't Linear

A critical trap for incumbents lies in failing to grasp the exponential nature of change. Human intuition is wired for linear thinking, which blinds leaders to the accelerating curve of technological progress. The metaphor of the chessboard—where rice grains double exponentially across each square—captures how disruption seems gradual at first but then suddenly overwhelms entire industries. Exponential shifts in technologies such as artificial intelligence and 3D printing often surprise incumbents, not because they were unforeseen, but because they were underestimated until it was too late.

To survive and thrive, leaders must adopt what we call exponential leadership. This requires clarity, congruence, and courage: clarity to see disruptive forces early, congruence to align thought and action with exponential realities, and courage to experiment and lead transformation. Unlike start-ups, incumbents cannot abandon stability; they must balance disruption with continuity. This dual mandate—to optimize the core while reinventing the future—is akin to “working on the plane while flying it,” amidst unprecedented turbulence.

Exponential leadership rests on three core practices:

Vigilance

Leaders need to cultivate the ability to detect weak signals of disruption before they escalate. Vigilant organizations widen their lens beyond traditional competitors, tapping diverse networks and listening closely to customers—sometimes even the customers of their customers. They scan adjacent industries, regulatory shifts, and emerging technologies. The goal is to create maximum optionality: the capacity to act before disruption strikes with full force.

Versatility

Organizations must develop the capability to disrupt oneself before others do. This requires questioning and reversing long-standing assumptions about industries, customers, and business models. Leaders must be willing to turn entrenched beliefs upside down and generate bold alternatives. Experimentation plays a vital role here, not as large-scale bets but as a stream of small, rapid, low-risk trials that can either succeed quickly or fail fast and cheaply. This shift demands a culture that tolerates mistakes and views them as essential to learning.

Experimentation

Leaders need to embrace the inherent messiness of reinvention. Incumbent cultures often resist this, as Industrial Age management practices were designed to minimize mistakes, not to encourage discovery. Yet in an era of disruption, fear of failure is a greater risk than failure itself. Companies must move beyond continuous improvement models and hierarchical traditions to foster openness, curiosity, and empathy for emerging customer needs.

Exponential times also demand a new kind of organization. Legacy hierarchical structures, with information hoarded at the top, are ill-suited to today’s world. Instead, disruptor business models are distributed, mobile, transparent, and participatory—mirroring customer expectations of real-time, on-demand solutions. Incumbents who thrive will be those willing to evolve their practices accordingly, what we call “humble incumbents.” These organizations embrace transparency, invite diverse perspectives, and foster collaborative learning across ecosystems.

Driving Growth as Business Resilience

The path forward is not easy. Reinvention requires deep inner work at both individual and organizational levels. Many incumbents will fail, as Cisco’s John Chambers starkly warned when predicting that 40% of enterprise customers may not survive the next decade. Yet those that commit to vigilance, versatility, and experimentation—backed by humility and courage—can turn disruption into opportunity.

The notion of a “new normal” is itself outdated. We now live in an era of “no normal,” where constant turbulence is the only certainty. Incumbents cannot wish this away, but they can choose how to respond. Those who cultivate exponential leadership will not only weather disruption but harness it to reinvent themselves and create lasting value.

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