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Why Disruption is the CEO’s Best Friend

by Audrey Smith, Ph.D., and Stephanie Neal

Disruption is the CEO's best friendThere is a looming collective anxiety among business leaders. Increased complexity, geopolitical fluctuation, and uncertainty have become constants exacerbated by relentless shifts across markets, technology, and competition. These exponential and accelerating changes are labeled as the “new normal,” becoming a mandate for organizational transformation. Today’s leaders frequently tell others, as well as themselves, to “get used to it”!

While most of us recognize that change is inevitable, human nature is wired for homeostasis, which is the tendency of living organisms and groups to keep the conditions inside them the same despite any changes in the conditions around them—a quest to maintain a state of internal balance. Of course, the business paradox is that while today’s leaders recognize that running towards change is their only option, it continually destabilizes their equilibrium.

Despite the discomfort it requires, our recently released Global Leadership Forecast study demonstrates that successful organizations are comprised of leaders who embrace challenges to their equilibrium. They continually rethink, redesign, refocus, and readjust stakeholder mindsets, as well as their own. They sense when it is time to act on changes in response to shifting trends, competitive forces, and customer needs.

"It's not the strongest or the most intelligent who survive but those who can best manage change." - Charles Darwin

This creates a peerless platform for CEOs to rebrand the angst of disruption into a winning call for differentiation—as a more agile organization than their competitors. In fact, Harvard Business School professor Clayton Christensen describes disruption as the key force for exploiting changes in market, industry, or technology to produce something new, more efficient, and even game-changing (e.g. Trulioo, Dropbox, Pinterest). A 2017 study by KPMG titled “Disrupt and Grow: 2017 Global CEO Outlook,” shows that CEOs are increasingly seeing disruption, particularly technology and business model disruption, as more of an opportunity than a threat.

Leveraging disruption is not easily accomplished without a pragmatic and deliberate approach to helping leaders create both the mindset and even more importantly, the organizational practices, that drive leadership agility. Here’s what DDI has learned about how CEOs and senior executives ignite these new mindsets and inspire acts of leadership that drive organizational success and innovation through complexity and change.

Shifting Mindsets to Capitalize on Disruption:

  1. Reinforce the notion that disruption and the associated quest for organizational transformation goes beyond a discrete point in time. Reframe it as a welcomed and desired state of being and an essential ingredient for differentiation.
  2. Treat discomfort as a positive tension. While change may be uncomfortable, help associates understand that being uncomfortable is not a state of emergency. Describe discomfort as the healthy tension that ensures curiosity and alertness, giving way to an array of varied perspectives, data, and new solutions to old problems.
  3. Recognize that winning innovation only occurs when your organization gets there first. Create a sense of urgency for being at the forefront of new business trends. Describe this as a prerequisite for those who will lead your organization into the future.
  4. Know that big transformations happen one small transformation at a time. Organizational agility requires leaders who are equipped to fuel their associates with confidence and the ability to sense and respond to change.

Translating Mindset Shifts into Practices that Drive Agility

Sense, Act, Shift, Repeat Converting new mindsets into sustainable agility requires understanding and anticipating how environments will change so that leaders can maneuver successfully and rapidly. It also requires developing new behavioral practices that enable change resilience. As Global Leadership Forecast 2018 shows, agile organizations excel and drive discipline in three areas:

  1. Informing decisions through data and analytics. More agile organizations leverage predictive data and analytics to fuel their sensing capability, with 91 percent of their leaders indicating that they’re prepared to use data to guide business decisions. This contrasts to only 76 percent at low-agility organizations. Leaders at more agile organizations are also 1.7 times more likely to use analytics to measure the impact of leadership programs and to make talent projections.
  2. Integrating multiple diverse perspectives to drive successful change efforts. Leaders in more agile organizations are twice as likely as their low-agility counterparts to collaborate and rely on diverse perspectives to create new solutions and opportunities and use multiple perspectives to gauge success.
  3. Encouraging rapid development of new and improved capabilities. Twice as many leaders at more agile organizations indicated that failure is embraced or rewarded in pursuit of innovative or different approaches (56 versus 21 percent, respectively).

Activating the “Disruption Advantage”  

CEOs and senior teams accelerate their organization’s fitness for disruption through purposeful and simultaneous shifting of both mindsets and organizational practices. They become engaged and vocal activists in championing the following key tenets associated with agility, including:

  • Drive first for speed. Encourage leaders to seek rapid deployment and feedback for new prototypes so that they can capture the information needed to quickly make decisions and adjust.
  • Proactively identify data blind spots. Challenge all leaders across the organization to relentlessly mine diverse data sources in support of decision-making and sensing for innovation opportunities. Establish healthy paranoia around identifying and closing information gaps.
  • Drive alignment around cross-functional, shared goals. Establish common goals across different parts of your organization that rely on interdepartmental cooperation and collaboration—and alignment around a common vision. This will surface information silos, create transparency, and help anticipate and remove barriers that impede capitalizing on disruption.
  • Think big, act small. Organizations that ranked highest in agility were smaller in size and less likely to have grown in complexity due to mergers and acquisitions. Rapid deployment of new and improved capabilities will require quick communication and decision-making by smaller, more nimble groups.
  • Aim to adjust, not adapt. Adapting generally implies change that happens over time, whereas adjusting can be instantaneous. Organizations that are more successful adopt cultural norms that actively endorse tinkering and adjusting.

Avoiding the Unmoving Box

Perhaps the greatest shift of all is when CEOs and senior executives fully appreciate that winning ideas are never created in isolation at the top. Although businesses fortify themselves in solid walls and floors, today’s uber connected workforce will never thrive in an unmoving box. Creating cross-functional and diverse cooperation and collaboration is crucial for exploiting disruption and opportunistically evolving with customers and markets. Capitalizing on disruption requires agile leaders who enjoy the ride, are equipped for and relish continuous shifting as the new state of being.

Learn more about how disruption is driving organizational success.

Audrey Smith, Ph.D. co-leads DDI’s Executive Services. An avid practitioner, thought leader, and architect for DDI’s C-suite and succession offerings, she has extensive experience with Boards, CEOs, and executive teams striving for high performance, business transformation, and growth. In her spare time, Audrey enjoys gravel bike riding on the beautiful trails of Western Pennsylvania, and hanging out with her young grandchildren who are already growing up as digital natives and happy disruptors.

Stephanie Neal is a research consultant for the Center for Analytics and Behavioral Research (CABER). She conducts evaluation studies and research on leadership and talent in the workplace, and is a co-author of DDI's Global Leadership Forecast.

Posted: 06 Jun, 2018,
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