What leaders can prepare to do for disruption
February 25, 2019
That business is being continuously disrupted should not be a surprise to anyone. Disruption is not new.
Even before Uber’s disruption of transportation or Netflix’s challenge to traditional entertainment, many giants of industry — BlackBerry and Kodak to name a few — have fallen to the forces of disruption.
Seismic trends such as the advent of AI, automation and robotics constantly shape and reshape the business landscape.
Disruption is a part of life, and leaders today are paid to make decisions in the gray zone, where certainty is scarce.
But leaders can navigate complex times better with the right response when faced with an uncertain future. In fact, a well-planned strategy for disruption can become a cultural strength in your workplace.
Start with what endures: the company’s purpose and vision. These two elements fulfill customer expectations, and aligning your direction, your teams and your workplace culture around them clears a path through the gray to keep your company on the rails.
However, Gallup research shows that only 22% of employees strongly agree the leadership of their organization has a clear direction for the organization.
Fewer yet, 15%, strongly agree the leadership of their organization makes them enthusiastic about the future, and 13% strongly agree their leadership communicates effectively.
Most workers, therefore, are even less prepared to weather changes than their leaders are. They need a “true north.”
And their leaders need one even more. Clearly defined purpose prevents an organization from chasing trends that diverge from the brand promise. It reassures employees about the future when they can’t see the road ahead, and decisions are far easier to make when so little is certain.
Rigorously test your assumptions.
A competitor’s sudden departure from the norm is alarming — it suggests they see something you don’t. But jumping on trends can lump you in with the crowd and erase your differentiation.
You don’t need to do what others do. You need to keep your brand promise. So, your direction should point toward what you know your customers value. That may meet the trends of the day, it may exceed them, but what your customers value is the right direction, and your teams should align around it.
However, the direction you’ve decided you should pursue may or may not be the direction you’re actually headed. To course correct, leaders must put preconceived notions to the test.
Unexamined assumptions can lead you astray. Biases can lead you off a cliff. It’s important to collect data, facts and objective information on your organization’s investments and continue to review them to determine if they align with the strategic direction of your organization.
You’ll find that some of those investments quit paying off a long time ago and should be scaled down. Some may present more opportunity than originally thought. Some will just be red herrings.
Then, you can invest in people and products that serve your customers’ needs and reimagine what new needs might emerge that will best engage prospects.
Think about the way IBM handled its own industry disruption.
In 1984, IBM was synonymous with business computing. Less than a decade later, IBM announced the biggest loss in the history of corporate America at the time, $8 billion, because customers were buying faster, cheaper tech than IBM could sell.
To save the company, “Big Blue” had to abandon its path — its competitors were churning it into mud anyway — and chart a new direction: to develop, produce and integrate high-value client solutions, not PCs. The direction and products are different, but the brand promise is the same: excellent tech that helps businesses grow.
IBM’s future success will depend on its employees’ talents and its pipeline of ideas. That is true of your company, too.
Always focus on the right data and analytics in support of your decision. Then develop your people and point them toward what your customers value. As a result, your direction will always mesh with your brand promise and disruption will be less confusing.
Steer your team toward your true north.
A company’s purpose helps leaders make decisions that keep the brand promise. With that as a true north, determining the right thing to do in confusing times is easier.
But to effectively activate on decisions, all the organization’s teams — with their different expectations, viewpoints and talents — must align with the company’s values and purpose.
Gallup’s research shows four in 10 employees in the U.S. strongly agree that the mission or purpose of their company makes them feel their job is important. And less than half of workers in any industry feel strongly connected to their company’s mission or purpose.
Fixing that problem requires abandoning the business-as-usual mentality. If less than half of a company feels connected to what its purpose is, a “business as usual” approach is clearly inadequate.
Unfortunately, the hot hand fallacy — the mistaken belief that because you’ve had successes in the past, you’re likely to be successful in the future — can make leaders think they must stick to what’s been working.
That’s a dangerous assumption, now more than ever, because what has been working may not work much longer. Leaders need to reimagine management for the future of work — and for the future of customers, too.
Seek broader input.
The world of work is constantly evolving. And leaders need to always be in front of future workforce management trends. Leaders must get better at sharpening their formal and informal networks to gain high quality input, insights and data.
The conversation around innovation and preparing for disruption is also widening — more feedback is being solicited by the chief executive, and the CIO and COO are joining the conversation. According to data and marketing services organization, IDG, 42% of global marketing teams have budgets earmarked for technological investments.
Those investments are more likely to pay off if the marketing and technology functions collaborate.
Workplace expectations are evolving rapidly, and preconceived notions of what works are being tested. The generations now entering the workforce demand real work-life balance, development and purpose, among other attributes their elders didn’t require, and they won’t hesitate to decamp for an employer who offers these if your organization doesn’t.
Hackathons — in which a core group of employees focus on a particular problem or product development project on a short timeline — are an example of future-of-work solutions in an ever-changing environment. These events give leaders input and insights into performance or help develop market-beating products and services. Hackathons provide opportunities to learn, test assumptions and, importantly, build networks; these are invaluable for a company focused on dealing with disruption.
Customer requirements are evolving, too. Customers now expect personalization, convenience, speed and the feeling that their patronage supports their values. Just like employees, they’ll leave without a second thought to spend at company that offers them what they want, the way they want it.
The customer voice is critical to this endeavor’s success. What customers value in you is what makes profit for you. Ask your customers about their expectations and evolving needs.
But feedback is only useful to leaders if it sheds light on what leaders need to know to make vital decisions. That’s a function of analytics. Scientifically valid analytics helps leaders make decisions, especially in disruptive times.
In the gray space, business-as-usual mentalities can blind leaders to new realities and, as noted, assumptions and biases are dangerous — more so all the time.
Purpose and values keep decisions consistent with the brand promise and align teams. No matter what the work unit does — builds apps, runs HR, drives trucks — a common purpose and shared values integrate that function with the rest of the company. It makes the brand promise foundational.
That’s especially important in times of disruption when standard practices and foregone conclusions may not accommodate a rapidly changing environment.
Reduce organizational noise.
Rapid change is pretty much the status quo. Leaders in the gray space are often encouraged to rethink their strategy to adapt to change, and sometimes that’s great advice — unless it causes them to abandon their purpose and brand promise.
It’s an understandable temptation. The gray space is confusing, and trends have special appeal when the market is unpredictable. But a sudden lurch in a new strategic direction can be bewilder teams — and it can leave the brand promise and purpose behind.
In an interview with Fast Company, Tim Cook of Apple says that one of his key roles as a leader is to “block the noise from the people who are really doing the work.”
To him, a leader’s job is to bring a sense of peace and order to the organization so employees can concentrate on the work — not be distracted by the cacophony of the world outside.
In the scheme of things, Apple’s production rate-to-revenue is far lower than its competitors. Yet Apple has become one of the world’s most innovative companies. They have done so by building a workplace culture of strong alignment around things that truly matter — to the company and to its customers.
Tim Cook’s approach works. All leaders, regardless of the decision ahead or direction they’re facing, need to make sure their culture is behind them and able to navigate change.
There are five key factors to focus on:
- Focus on sustaining your organization’s unifying purpose.
Do you know what your purpose is? Do your people?
It’s not unusual for leaders and lower-level workers to have very different definitions of the organization’s purpose. That disconnect can create inefficiencies and prevent purpose from being integrated into day-to-day decision-making.
2. Focus on the right behaviors.
What behaviors will drive success in an uncertain and unpredictable business environment? How will you know that the right behaviors are at play?
The right behaviors must also be measurable — and leaders must consider several kinds of benchmarks, including financial, employee and customer metrics. Otherwise, leaders won’t know what’s working and what’s not.
3. Focus on development.
Do your managers coach to performance? How do you know?
Development is usually pushed to the wayside during times of change — but that’s when it’s needed the most. Continuous coaching and feedback create an opening for new ideas, initiatives and programs.
Do your people feel welcome or comfortable sharing their opinions and ideas? What’s their incentive? What holds them back?
4. Focus on agility.
In disruptive environments, being agile is a basic business necessity. But if agile is just a buzzword, or confined to a few teams, it won’t do you any good.
So, find out which teams have autonomy and which don’t. Are your teams genuinely end-to-end on production? How much freedom do people have to innovate? What gets in the way?
5. Focus on engagement.
Excessive attention on cost reduction misses the point — saving money is good, making money is better. All workers are more productive and profitable if they’re engaged.
Do you know if yours are? Do you know how to move the needle on engagement? Is engagement an aspect of your inquiry into opportunities for growth, revenue and capital efficiency?
Those elements are key factors of an organizational culture that can navigate change. When they get leadership’s attention, the workplace culture works in the future’s favor.
Companies need a strong foundation to face disruption.
Leaders who align their company culture around those elements, with people who truly understand the mission and purpose, create a foundation that allows teams to assimilate new directions and plans without losing sight of the brand promise.
It allows them to navigate disruption and capitalize on advantages.
In business environments of slow change, aligning culture, teams and purpose are a vital advantage for leaders operating in the gray space.
But in times of disruption, these are essential to getting through the gray space at all.
By Vibhas Ratanjee and Stephanie Barrymore