The clock is ticking: surviving privatization and deregulation by utilizing the running time

Deregulation interrupts industry evolution, leading to failure or absorption of many once-proud, dominating firms. Privatization also radically changes the evolution of an organization, as it moves from a protected, state-aligned institution to life subjected to the harsh forces of private sector ownership and scrutiny. Yet, deregulation and privatization do not occur overnight. We identify a period in many regulated or monopolistic industries which affords incumbent firms and soon-to-be privatized organizations the time to ready themselves for a radically changed, competitive landscape. We identify this period as the running time. Companies that survive and thrive in a post-privatization and post-regulation era initiate strategic processes early in their running time. We present a four stage model of strategic survival processes during the running time. We illustrate the model by drawing upon an in-depth case study from the US banking industry.