My “love affair” with the Disruption Economy dates back to 2009, when Brazil’s leading Business-School, Fundação Dom Cabral, asked me to partner with Dalton Sardenberg, one of their most solid faculty, and design a program for CEO’s aiming at understanding what was going on in the World’s Economy and whether or not leadership was about to undergo its first truly profound paradigm shift in History.
After one year of collective reflections and welcoming several visitors (incl. Insead’s Dean, Frank Brown, Business Futurist, Gerd Leonhard, Oxford Faculty Roland Kupers etc.,Knowledge architect Nick van Heck, the fourteen C.E.O.s and we had come up with several observations:
Three big Paradigm shifts, triggering the Disruption Economy, would probably be:
- From scarce to abundant knowledge: Whereas we used to live in a world where outsmarting competition, guessing the future faster than they, hold superior knowledge were considered as true advantages, we would head for a “world’s knowledge is at our fingertips” logic. The consequence of which, would be:
- Strategy would need to evolve from guessing the future to preparing for whatever it would be.
- Knowledge would no longer be the privilege of the top management: Just like the human body, constantly taking information by thousands of cells about its environment, tomorrow’s organizations should realize that meaningful knowledge would not necessarily come from the top.
- The capacity of information filtering would become crucial: In 2002, Lieutenant General Paul K. Van Riper, retired Commanding General of the 2nd Marine Division had been asked to lead the “enemy” team in US Army’s 250 million$ war game, Millennium Challenge, aimed at preparing for Iraq’s invasion. Van Riper ridiculed his opponents (the “good” blue guys) and defeated them in two days, inflicting it the equivalent of 20’000 deaths and sinking sixteen warships. The red team had borrowed a lot to “Complex Adaptive Systems” thinking to set its strategy up. One of the key features was to overwhelm the blue army with unnecessary and irrelevant data. When they realized which information was relevant, it was too late.
- Competition will fly under your radar screen: Jonathan MacDonald called it “Corporate Technology in the hands of Citizens”. In other terms, the privilege once held by deep pockets’ companies is now within the reach of unknown and obscure potential competitors working from their home. This is strongly changing the rules of the game, bringing “guerrilla fighting” in the land of the established players.
- “Disruption is what happens to the ill-prepared”: is how Nick van Heck likes to provoke executive teams when they tend to blame circumstances for where they ended-up. Ien Cheng was quoted as saying: “”The choice is not between disrupting your business now versus later, but between disrupting it yourself or having it disrupted for you!” Marshall McLuhan believed that: “It is the framework which changes with each new technology and not just the picture within the frame”. We are going to live increasingly in times where we will have to manage the permanent dilemma of continuing to manage the excellence of the existing operations and constantly looking to surf ahead of the next possible disruption wave. Kevin Kelly summarized this, writing: “Innovation is disruption; constant innovation is perpetual disruption. This seems to be the goal of a well-made network: to sustain a perpetual disequilibrium […] The difference between chaos and the edge of chaos is subtle […]A real innovation is sufficiently different to be dangerous. It skirts the edge of the disaster, without going over. Real innovation is scary. It is anything but harmonious.”
With the support of Gerd Leonhard, we had identified three “Societal game changers”:
- From desktop to mobile society: Society would change from a passive consumption mode towards a far more active and co-creating one. “Passive desktopers” would continue to read, listen and watch whereas “active broadbanders” would write, create, change.
- The arrival of the N-geners: They were born and raised with the Digital technology. This means that there is much more in common between them, whatever their race, religion or geographic origin than there were between the previous generations. Less dependent from television (a passivity inducing media) there are far more into co-creation, interaction and social networks. Their norms would be:
- Speed: they are used to immediacy and getting things done, transferred, shared quickly
- Freedom: quite rebellious to authority for the sake of it, they will certainly challenge the “seniority is superiority” stance. They also have a fundamentally different view on intellectual property and “piracy”
- Openness: the amazing willingness of N-Geners to expose their privacy in public, through social networks and not being bothered by it may suggest a strong need for openness.
- Innovation: N-Geners constantly strive for novelty and what’s in.
- Playfulness: Although politically motivated (sustainability, human rights, poverty, inequality) those “fast zappers” are reluctant to engage into “heavy” debates and far more prefer the appearance of lightness, speed and mobility.
We also identified “Leaders Game Changers” which were to be:
- Disruption leaders: On the one hand, as wise leaders, they do not wish to disturb the operational excellence of the existing organisation and on the other, they want to be the ones disrupting the industry instead of being victims of circumstances. Becoming “Disruption leaders” will change the way we lead in our firms. The opportunities and ideas will not just come from us anymore. Our capacity to listen, encourage (and tolerate/learn from mistakes “fail fast”) and engage our people will be fundamental. Disruption leaders encourage their people to think and behave as market drivers not market driven…
- Connecting leaders: Leaders will need to evolve from “Directors to Connectors”. Their role will consist of connecting the apparently unrelated dots on the strategic map and scrutinize constantly the world around them as well as remain permanently “switched on” with the various levels in their firm (not just to the faithful and loyal “close guard”).
- Tribal leaders: Seth Godin identifies Tribal leaders through 3 questions:
- Who are you upsetting? “Tribal Leaders” are “heretics” who challenge the status quo. So if you are not upsetting anyone in the market, you are probably waiting to be disrupted…
- Who are you connecting? Tribal Leaders understand what “resonates” in people. “The Beatles didn’t invent teenagers, they decided to lead them, Bob Marley did not create the Rastafaris, he chose to inspire them”… Tribal Leaders understand what moves and resonates with people and excel at creating communities around that purpose
- Who are you leading? Tribal Leaders don’t please everybody. They manage to change clients into aficionados, customers into fans and transform obedient and bored employees into passionate defenders of a cause. The old push model becomes an inspire and engage one
- Engaging leaders: This takes us to the book my partners and I recently published. For us, Engaging Leaders work on three agendas:
- They co-create, with their people, clarity, meaning and ownership around the strategic or intellectual agenda (Logos)
- They behave, visibly and spectacularly in ways which directly support and connect with the organization’s Purpose (Ethos). They practice actively Value Building Behaviours (active listening, asking open questions, summarizing, supporting, challenging, clarifying, seeking time-out and asking/giving feedback)
- They create “emotional markers”, through powerful metaphors, stories and symbols, which enable people to engage emotionally into the organization’s purpose (Pathos)
In the next article, we will look at how “Disruption leaders” truly differ from traditional leaders. They truly challenge orthodoxies and paradigms which accompany us since prehistorical times.