Taken from WSJ, June 3, 2016.

An incumbent’s guide to digital disruption. If the ability of a legacy company to identify in time the digital harbingers of its doom does not sound hard enough, try the years (and possibly millions of dollars) spent experimenting with new initiatives when, for all purposes, the core business appears solid. “Not only are there strong, short-term financial incentives to protect the core, but it’s also often painful to shift focus from core businesses in which one has, understandably enough, an emotional as well as a financial investment,” McKinsey & Co.’s Chris Bradley and Clayton O’Toole write.  And for those legacy companies that do succeed in establishing new digital business models there’s still the challenge of adapting to the new normal. “The challenge is to adapt and structurally realign cost bases to the new reality of profit pools, and accept that the ‘new normal’ likely includes far fewer ‘rivers of gold.’”