Technology Disruption: Behind the Scenes of an On-coming Problem
Technology disruption, disruptive innovation, and change have become the norm. Most of us know that if we don’t proactively innovate and change the game, someone else will rewrite the rules for us. Just think Blockbuster, Borders, Blackberry, and Kodak. Those are remarkable examples.
At the same time, business culture reinforces the idea that uncertainty should be avoided at all costs. Control is the goal. No wonder every management book on Amazon that uses the word “surprise” in its title focuses on preventing the phenomenon from occurring.
But here’s the problem. Disruptive innovation and change aren’t formulaic. Whether we’re intentionally innovating or responding to competitive threats, today’s leaders (and most employees) must live with constant uncertainty and continually respond to the unpredictable.
In 1892, George Eastman formed the Eastman Kodak Company to “make the camera as convenient as a pencil.” It was an idea whose time had come and by the early 20th century, Kodak emerged as one of America’s largest companies and Eastman one of its most successful entrepreneurs.
It wasn’t just that one idea that made the company so successful, it managed to stay on the bleeding edge for over a century, pioneering impressive new advancements in photographic paper, development and image processing. In 1975, it invented the digital camera, which would lead to its downfall as a major corporation.
The problem wasn’t that Kodak didn’t understand the potential, but that it became stuck in its operating model. It was so huge and so profitable, that almost any other opportunity seemed small by comparison. While Kodak is an extreme case, many others fail in new markets for similar reasons, they fail to bridge the gap between innovation and operations. The truth is that every business eventually gets disrupted, so it’s absolutely essential to be able to look beyond your current business and explore new horizons.
How GE Was Disrupted
General Electric has earned its reputation as one of the world’s best-managed companies. Its former CEO, Jack Welch, was named Manager of the Century by Fortune magazine, its executives are heavily recruited to run other companies and its management development campus at Crotonville is legendary.
Jeffrey Immelt’s tenure as CEO was very much in this vein. He deftly moved the company out of financial services and likely avoided the worst of the financial crisis. Much as Welch pioneered Six Sigma, he brought in lean startup guru Eric Ries to implement a more entrepreneurial approach and created the FastWorks program to drive these methods throughout the company.
These were thoughtful, strategic moves designed to leverage the company’s existing strengths. In its power generation business, long a cash cow, the FastWorks program dramatically cut development times and improved quality. GE also acquired the power division of Alstom, in a move analysts called “brilliant” and the firm’s “best deal in a century.”
Unfortunately, while this strategy did much to improve the operational performance of the Power division, it did nothing to change the fact that, because of the rise of renewable energy, customers stopped buying gas-powered generators. The company announced massive layoffs and Immelt was forced out. GE had become a square peg business in a round whole world.
The results are that you must continually reinvent the business. Take Sarah Robb O’Hagan, president of Gatorade, for example. Having learned that many young football players pack bananas in their sports bags only to find them mashed between their cleats before practice, she asked her product development team to create a better solution. A worthy goal, yes?The result: a pre-workout drink pouch containing a powerful carbohydrate punch. The ingredients weren’t the challenge. It was the container. “We knew drink bottles like the backs of our hands, but pouches were a completely new animal,” Sarah said. But they had the courage to give it a try.
Gatorade launched the pouch with lightning speed, hoping to make a big splash in the market by establishing a new product category. But while the pouches had tested well in the lab setting, some of them leaked when sitting on store shelves — a pretty big problem for a product meant to be a cleaner alternative to mushy pre-workout snacks such as bananas.
In many organizations, customer complaints and internal grumblings would have stopped the entire program in its tracks. Rather than running for cover and placing blame, Sarah focused on personally managing the fallout while turning the problem into a learning opportunity. Would you have stuck it out? The pre-workout drink pouch, along with several other products, ultimately became the foundation upon which Gatorade reinvented and re-energized its entire product line and brand.
Our inherently uncertain environment demands a new set of competencies focused on navigating disruptive change while proactively driving game-changing breakthroughs. Five leadership competencies are essential for success in today’s unpredictable world. And these competencies need to be embraced by leaders, role modeled, and instilled into teams and individuals across the organization — just like Sarah did at Gatorade. Here they are:
Leading disruptive innovation and change involves leapfrogging — creating or doing something radically new or different that produces a significant leap forward. People who possess an unyielding desire to create a breakthrough ensure that everything they do focuses on adding a whole new level of value to customers, the market, and the organization. It is called ‘sticking your neck out’. Can you see yourself with this mindset?
Pushing boundaries is important on two levels. On the personal side, people who live abroad, work across multiple functions and surround themselves with diverse team members continually broaden their mindsets and enhance creative problem-solving skills. From a strategic perspective, they push the limits of their colleagues, teams, organizations, and partners.
Some boundary-pushers here: 7 Extraordinary Digital Disruption Mini-Case Studies
Most leaders demand hard data when making critical decisions. In times of disruptive change, robust data rarely exist. Leaders must use any information they can obtain from any source inside and outside the company — but then complement that data by using their gut to round out the equation.
Leading disruptive innovation requires managing unsurpassed levels of uncertainty. Adaptive planning involves taking action to drive results, learning from them, and then modifying assumptions and approaches accordingly. Whether these “results” are good or bad, they bring us closer to our breakthroughs since they result in new insights — just like Gatorade experienced. These new insights shape our future strategies, plans, and actions, which are better aligned to the needs of the market.
Technology disruption … creating surprise
Disruptive innovation and change is a process chock full of surprise — failures, successes, unexpected technological advancements, competitive moves, customer feedback, political and regulatory shifts, and other unforeseen events. Most leaders assume surprises always should be avoided. But those who realize that surprises are an inevitable part of the business (just like life) are best equipped to use surprise as a strategic tool — which makes them the agilest and fastest to respond to or capitalize on unforeseen events.
In today’s turbulent environment, disruptive innovation and transformational change go hand in hand. Companies that want to proactively drive game-changing breakthroughs must give their leaders and employees the requisite mindsets, skills, and tools to break through — personally and on behalf of the business.
Learn to anticipate: Disruptive Innovations … 9 Creative Ways to Achieve a Shocking DisruptionThere is a lot of misinterpretation about what ‘being focused’ actually means:
The focus is not about accomplishing your tasks; it is about accomplishing your vision! And yet, quite often when confronted with the need for change we see leaders proclaiming a focus, which is far removed from the focus described above. They describe a focus that is task-oriented, short term oriented, focused on strengthening what we do today. Often a focus with a strong cost-saving orientation, and less orientation on creating new value. A focus that is rather risk-averse, not exploring possibilities for learning and growth.
In some business situations creating a focus aimed at ‘keeping and strengthening what we have got’ can be justified. However, most situations require leaders who create a different focus, one that aims at creating successful and sustainable change. Not easy! Most people seem to be able to live with a company focus that is keeping them inside the known territory. If for instance, we need to do more of the same in less time, raise the quality level of our product or service, or produce at a lower cost; we seem to be able to deal with this. People will maybe not like the pressure that this company focus is putting on them, but they will go along with it. Up to the level that all energy and ideas are used, and nothing is left.
At that moment people reach the limit of what they believe is possible, feel numb and start acting unmotivated and uninspired. At that moment the company probably realizes that it needs to change more fundamentally and that it will take substantial energy to do that. The energy that most people don’t have any more at that moment!
Successful leaders create organizations that focus differently. In their organizations, the focus is always aimed at the future, at how we see our desired future, at what we need to do differently to get there, at what we collectively gain when reaching it. At first, they will encounter resistance and hesitation within the organization. Not so strange, because people are asked to get outside their comfort zones.
The desired future is new, and there is maybe uncertainty and a lack of confidence, so people will not easily follow. Nevertheless, successful leaders succeed in aligning their people around this focus. And by doing that they create energy instead of draining it! How do they do this? What specific traits do these leaders show? I observe the following recurring traits:
Their focus is aimed at the longer term, not short term
They have a longer-term focus based on their vision of their company’s desired future. They link the company focus to this desired future. They share their vision actively and discuss it openly with the organization. They do not lose energy in focusing on short-term temporary improvements; they focus on creating sustainable results.
Their focus reveals a high level of personal alignment
They know their qualities and weak points very well, as well as what they stand for. They act based on clear personal values and include these in their vision. Because of their high level of personal alignment, they explore different opinions with an open mind and feel no need to focus on themselves. Their focus is always on creating the best company results, in line with these key values.
Their focus arouses an eagerness among people
They pay special attention to the process of building a shared focus throughout the organization. The focus is not just on setting out tasks and actions. It is about creating shared energy that drives us towards a common result. They invite people to take part in defining the focus that is needed to create the desired future, and this builds motivation and commitment.
Their focus is on releasing smart energy
They are only interested in decisions and actions that will bring us closer to our destination. Even more, they are continuously challenging people to focus on the levers for change that will boost us forward, and not focus on trivial things.
They are allergic to ‘jumping to conclusions’ without knowing how it will bring us closer to our goal. But they are also allergic to procrastination and risk aversion when the way forward is to ‘experiment — learn — adjust.’
They are persistent in their focus
They stick to the focus, even if results are not forthcoming at first sight. They show confidence and stay focused. This does not mean they will never change course, and will always rigidly keep following the initial plan. When they see that the vision will not be reached by maintaining the current focus, they are the first to shift focus. But as long as the focus is directing us towards the vision, they will keep this focus.
A final example
On December 9th, 1968, a research project funded by the US Department of Defense launched a revolution. The focus was not a Cold War adversary or even a resource-rich banana republic, but rather to “augment human intellect” and the man driving it was not a general, but a mild-mannered engineer named Douglas Engelbart.
His presentation that day would be so consequential that it is now called The Mother of All Demos. Two of those in attendance, Bob Taylor and Alan Kay would go on to develop Engelbart’s ideas into the Alto, the first truly personal computer. Later, Steve Jobs would take many elements of the Alto to create the Macintosh.
So who deserves credit? Engelbart for coming up with the idea? Taylor and Kay for engineering solutions around it? Jobs for creating a marketable product that made an impact on the world? Strong arguments can be made for each, as well as for many others not mentioned here. The truth is that there are many paths to innovation.
The bottom line
“The hardest thing when you think about focusing. You think focusing is about saying ‘Yes.’ No. Focusing is about saying ‘No.’”– Steve Jobs