It is not just about seeing shifts and changes in society and business before they happen, it is also about using them to your advantage, explain Ruth Murray-Webster and Eleanor Winton
Many great and long-established organisations have fallen victim to disruption, and it’s all too tempting to think, “that could never happen to us!” Yet, the factors that disrupted those businesses are not unique, nor are they over and done with.
What our collective experiences tackling Covid-19 have taught us is that the scale and impact of the threats we failed to take account of can be greater than we ever imagined and can play out in ways we never expected. The harsh reality is that, taking the long view, Covid-19 has become the latest in a string of seismic shifts – realised risks – with the potential to fundamentally change the way that societies and economies operate into the future.
We know, thanks to the special report by the Intergovernmental Panel on Climate Change on global warming, that we have just nine years remaining to take action to limit global temperature rises to 1.5°C. We also know that the world is already reeling from the effects of climate related risks, from flooding to forest fires, which will only accelerate in the coming years – and that in our globalised system, risks and events that feel geographically remote can have a catastrophic effect on the global marketplace.
If our businesses are to survive and thrive in a disrupted future, we need to get better at spotting those potentially disruptive situations, and better at preparing to adapt in the face of disruption. Bouncing back or indeed bouncing forward from disruption takes more than some quick decisions – it requires a different mindset. In spite of the plethora of regulation, structure and process we’ve developed as a society to manage the change, the way that businesses respond to threats and opportunities in reality is fundamentally human – so culture is a key enabler of positive change.
We cannot prescribe a “winning” cultural formula – every business is different after all. Nor is there a silver bullet – or an off-the-shelf solution. Building a culture that can enable you to drive value from disruption requires that, as leaders, we tackle some challenging but potentially transformational aspects of how we do business.
Set out a compelling vision
To begin with there are a couple of questions you can ask: does your organisation have a compelling vision for the future? Does it seek to add value to the world as a whole and not just to your bottom line? If the answer is “no” it’s time to take action. We are living in the moment that signals the beginning of the end of “profit at all costs” and the transition to a more inclusive and value-led definition of the role of business. Your vision for the organisation should reflect that. Some segments of your workforce will already be wondering where it is. Given that 73% of Generation Z (born after 1996) are willing to pay more for sustainability, maybe some of your customers are already turning away.
Beware the deeply entrenched silo
An unfortunate side effect of our years of effort to maximise the efficiency of organisational design is the emergence of the dreaded silo. Not just structural siloes, but siloed thinking and action within the organisation. Where siloes are deeply entrenched, they can develop their own identity and culture, harming the sense of a cohesive culture across the organisation as a whole, as well as creating internal friction that hampers collaboration.
For us, the key siloes to address if you are to create a culture that can drive value from disruption are those that too often exist around risk and innovation. That these functions often struggle to work together or even engage with each other is one of the greatest missed opportunities in business and it’s something that we have a great deal of professional experience of dealing with.
In a stable environment “the disconnect” is a shame. In a disrupted one, the one we’re currently living in, it’s a disaster. Our need as leaders to categorise change in our operating environment as risk or opportunity rather than potentially both not only enables and compounds these siloes, it also means that we are narrowing the potential scope of action we can take before we’ve even had time to consider an emerging issue and its implications.
Curiosity is not the preserve of any one team or individual in your business. Nor should it be. In a fast-moving environment it is collective curiosity that will help you to spot those “weak signals” and “edge perspectives” that could be future value generators or indeed value destroyers.
Specifically, as an organisation, you need to get really good at asking questions of each other and generally exploring “why?” when making decisions. That’s easy to say but definitely not easy to do. Too often we meet leaders who feel sure that they have a culture in which everyone feels safe to ask questions while their employees tell a very different story.
You also need to fully invest in diversity. All vectors of diversity (sex, age, background, geography, ethnicity, sexuality, seniority, education, wealth etc.) will play a part in ensuring that your thinking doesn’t suffer from an avoidable blind spot.
It starts with you!
Unpredictable times call for unusual leadership. Throughout the business world there is an increasing challenge to traditional power-based leadership and a growing conversation about servant leadership, focused on the needs of the team. If your culture is, in short, “the way things are done around here” – what is your leadership communicating to your colleagues and customers, stakeholders and shareholders? Maybe a hackneyed term, the “tone from the top” really matters – what you say or don’t say, what you do or don’t do, what behaviour you reward, or don’t reward.
Company cultures that embrace disruption motivate and incentivise curiosity, creativity and collaboration. To build such a culture requires the creation of a compelling vision, a willingness to work together not in silos, a passion for seeking out new data and perspectives and leadership that not only talks the talk, but also walks the walk.
This is easy to say and can be difficult to do, particularly if the prevailing culture is something more “normal” focused on perfecting what you already do rather than seeking out solutions that add new value in new places. There are some conditions for success that need to be diligently, and maybe painfully worked through with the leadership team. But the reward is great – not just preventing disruption of the status quo, but being a positive disruptor in your world.
Ruth Murray-Webster and Eleanor Winton are experts in risk, disruption, innovation
and foresight. They are co-authors of a new book ‘The Disruption Game Plan: New Rules for Connected Thinking on Innovation & Risk’.