• by Sarah Mahoney  @mahoney_sarah, March 6, 2013

While “digital disruption” may already be the decade’s most overused marketing phrase, a new report from Forrester indicates that most brands are poorly equipped to respond, let alone initiate, abrupt changes among customers.

Among the biggest eye-openers in the research is that while poobahs believe their brands are prepared, their teams don’t. While 74% of those at or above VP level say they can navigate company policies to respond to swift changes, for example, only 44% of those who actually have to do the navigating have that level of confidence. 

Further proof that marketing execs need a reality check? Less than half -- 48% -- think the companies they work for are capable of out-innovating the competition. Yet 67% believe that somehow, their company will end up with stronger customer relationships in the future.

To be truly ready for disruption, companies need three things, writes Corinne Munchbach, an analyst at Forrester.

* Energy, in the form of digital-specific enthusiasm.

* Skills, including managing direct digital customer relationships, mining real-time data sources, and the ability to “partner promiscuously” to move more quickly.

* Policies. While many companies have the first two, “if the company has enshrined organizational policies and practices that inhibit the creation and delivery of new experiences, digital disruption simply won't happen.” 

The survey also uncovered significant anxiety about competitors. For example, while 87% believe that there are plenty of ways to digitally innovate and differentiate their brands, the majority -- 56% -- think other companies will have an easier time making those changes, and beat them to the punch.

They are also increasingly aware of the rise of unexpected competition. “ You can become an Amazon Merchant, a Kickstarter entrepreneur, or a Square-enabled credit card merchant with "a handful of clicks and no money down," she writes. “The result is that at least 10 times more digital innovators can operate at one-tenth of the cost or less; multiplied together, these forces generate at least 100 times more idea power produced than under traditional disruption.”

Of the companies Forrester surveyed, one-third came in with below-average scores in its disruption assessment, meaning that they scored low across all measures of energy, skills and policies. Another third were either “solidly” or “variably”  average, with perhaps high levels of enthusiasm, but fewer skills or more policy obstacles. Finally, a third were deemed above average, and typically, these were smaller companies. 

Based on those insights, Forrester recommends four steps for greater readiness:

* Set up small innovation teams, made up of between four and six people, across marketing, IT, and other departments.

* Make a concerted effort to reduce inter-departmental barriers

* Encourage senior execs to add enthusiasm to the process, and CMOs aren’t enough. “It takes a C-suite village to disrupt a company,” she writes.

*Shorten time frames. “A trademark of digital disruption is its speed and flexibility,” she adds. “Large firms need to shed long product development and campaign planning cycles in favor of a more iterative, rapid approach that takes place more often, but in less time.”