Economics Insights @ CBS

Creative destruction presents a tough implementation challenge. It's expensive in terms of physical goods and executive and employee time. Creatively destroying requires stopping all or part of the existing system, destroying it, redesigning the new system, putting it in place, debugging it, and habituating employees to its entirely new features. That means retraining and re-establishing informal networks among longstanding employees, customers, and new employees. Finally, it means creating a new culture and aligning people, processes, networks, and structures with it.

Much of consumer research has focused on frequently purchased packaged goods, and so it might be understandable that the concept of risk has lingered in the shadows. Although risk is involved in the purchase of packaged goods, it is minor compared with that in the domains of much greater economic consequence: For most consumers in developed countries, decisions about where to live and how to invest for retirement are the two largest economic decisions they will make.