In the midst of the 4th industrial revolution, as we are, threats of disruption surround us.  Typically, we tend to view such disruption in binary terms as either a threat to our business or an opportunity for it.  New research from Cambridge Judge Business School highlights how such a simplistic perspective is ineffective, and a better approach is to take a more “multiplexed” view that allows greater flexibility of response.

The more flexible approach enables us to view both the type and the urgency of the challenge.  This, combined with the heritage of the firm, allows a variety of perspectives to be considered before the firm responds to the challenge.

Responding to change

The research was based on the response of a multinational insurance firm to the rise of online aggregators, such as GoCompare.com.  These platforms allow consumers to easily and conveniently compare prices and so get quotes on a range of insurance products in one place.  This bypasses the traditional broker arrangement, and the platforms proved enormously popular, with 56% of UK motor policies purchased through them by 2012.

The insurance business was able to modify its approach to these threats as they evolved.  This ensured they were able to deploy a series of new tactics as managers understood what worked and what didn’t.

“Our study supports the idea that – in the right conditions – organisations can benefit from multiple, competing and even divergent perspectives on emergent threats,” the researchers say. “Framing the situation in a variety of ways can help organisations be significantly more flexible. They can test alternate responses in a relatively short time frame and drop strategies that failed to bear results in practice, rather than aim for a planned or deliberate strategic response.”

Flexible thinking

The approach, which is referred to as “multiplexed framing” by the researchers, enables firms to quickly test various strategies in response to disruptive innovation, with this rapid learning and experimentation crucial to forging an effective response.

“This adaptive capability allows the organisation to switch back and forth between different responses as needed to respond to an unfolding disruptive innovation,” the authors explain.

The researchers argue that the multiplex approach used by the insurance firm helped them to avoid the kind of tension that often exists between business units or teams when faced with disruption.  As such, it underpins the ability to rapidly change the response of the organization as it learns from events as any tensions that emerged did so within teams rather than between teams, which proved easier to manage and diffuse so that it didn’t undermine the overall response.