Managing in the times of disruption
Over the last two decades or so, the word disruption has acquired a positive twist representing ‘a light at the end of the tunnel’. It no longer means an interruption or interference. Businesses are being disrupted at an unprecedented pace. Many ride the wave but most end up too weak to survive. There is no magic formula that works. But I believe there are some basic principles that remain unchanged no matter what or how the disruption. Managing an organization in these unpredictable times requires a greater understanding of disruption and its symptoms.
Note: in no way do I claim that there are only 3 ways to manage (businesses) in disruptive times. There are multiple approaches with multiple options. I have presented my top 3.
To my mind there are two distinct types of disruptions. There is one that happens in real time and can be called ‘Explosive disruption’. Contrastingly there is another sort of disruption that takes place quietly. It provides no warning and before one realizes, the status quo has been disrupted. I choose to call this ‘Silent disruption.’ These two types are best illustrated with an example. Both of these are realities in today’s world. They can affect businesses both positively and negatively.
Here is a live example of ‘Silent Disruption’. For 350 years books were defined as printed paper bound together that held content of a consistent type. Books had elements that were consistent across all types. There was a front cover and a back cover. The insides contained statutory pages such as a copyrights page, a table of contents page which were generally followed by chapters housing knowledge of some sort. One could mark a page with a physical object such as a bookmark or by turning the corner of the page. Text on the page was highlighted by some sort of marker. But over the last 50 years another type of book started taking shape. These were books that didn’t have any paper or ink but contained knowledge that was recorded on different types of media. The earliest version (of non-book recorded knowledge) was one which had some sort of grooves cut on vinyl. This was followed by magnetic tape containing recorded knowledge. Before long, compact discs read by lasers and devices read by computers started redefining books. These were however marginally successful in replacing classical paper books. There were advantages to storing knowledge digitally. It was retrieving knowledge that created the problem. The quest then began to replicate the look and feel of a real book in digital form; without paper and without ink. Today an eBook has made a subtle yet conscious entry into our lives. We may swear by a printed book but in disseminating knowledge the digital world is a reality, co-existing with the traditional analog world. Together they have augmented dissemination and not replaced one form completely with another.
Here is an example of how disruption takes place visibly. There used to be a classical definition of a ‘library’. It meant a physical structure that housed knowledge, generally in some sort of printed form. Within these structures lived entities that are best described as ‘reference material’. These constituted books, periodicals, images (both still and moving) and audio files (including human voice). The library had a cataloging system that allowed a
user to quickly find what one was looking for. A system of accessing the knowledge within the walls of the structure co-existed with a system that tracked knowledge ported out of the walls. Supplying these repositories were publishing houses that specialized in curating knowledge and structuring them more suitable for referencing. As knowledge became digitized, it became more searchable. Porting knowledge became easier and most of all, systems tracking porting dramatically changed. Today we rarely consider the World Wide Web as a ‘library’ but in reality, that is what it is. With this change came a clear and ‘Explosive disruption’, academic or reference publishing has all but vanished as a commercial venture. Publishing houses have had to revisit how knowledge was curated and commercially made viable. The change isn’t complete and even the changed models are undergoing metamorphosis.
The analogy of disruption needn’t be restricted to publishing, it is a phenomenon that has or will affect every industry, product and service. A more direct disruptive force that is product or service agnostic is Artificial Intelligence (AI). I classify AI as a silent disruptor because it is already making inroads into our lives and we aren’t (yet) conscious about it.
What needs to be managed in a time of disruption?
Managing in a disruptive environment requires an understanding of the forces at play. Depending on where one sits in an organization’s management structure, interpretation and importance of forces at play, will differ. However, for the senior management, the approach has to be consistent and focused. Here are the top 3 focus areas as I see them:
1. Understanding disruption
2. Create and manage a business transformation plan
3. Action plan for VUCA situations
Within each of these points resides a universe of ideas, thoughts and processes. Defining them will stimulate detailing of each of these areas.
Any and every organization is a complex, living entity. Disruption or change is never understood consistently across this entity. The most important step is acknowledging that the business, or service is undergoing some sort of disruption and quantify its effects as best one can. Once this is done, top management needs to agree on a messaging that is consistent, clear and balanced about the future of the organization. Most often than not I have observed that organizations don’t want to acknowledge a change or disruption until it is too late. Then begin a series of knee-jerk reactions to contain and explain the situation. A more effective part is communicating ground realities and steps that senior management is taking to ensure the future of the organization. The entire organization must understand and believe that they have a future. Conversely confused messaging could derail current functionality of the organization.
Creating and managing a business transformation plan
Once there is acknowledgement of a changed or disrupted environment, the organization must transition into business transformation mode. It begins with creating a medium-term vision which is backed with a short gestation transformation plan. There is very little room
for a long-term business vision given today’s dynamic world. The basis of the transformation plan has to be grounded in how business affects the people (in the organization) and the business environment (in which the organization works). When discussing people, one generally tends to read this as ‘removing dead wood’ or ‘trimming the fat’ in an organization. On the contrary, people are the most valuable asset in any transformation plan. People carry the DNA of the organization and are most likely to predict the outcome of any change. It’s true some folks may not have the skills to manage the transformation. But to survive, the organization must attempt at skilling their workforce and making them ready for the future. This should be undertaken before a decision to ‘trim the fat’ or ‘remove dead wood’ is taken. To me the answer of simply reducing workforce OR worse, replacing it, is never a sustainable one. Yes, replacing workforce with a more skilled workforce will have its benefits but a greater risk is that of losing the company’s history. Sometimes this can prove dangerous.
Action plan for VUCA situations
VUCA is the acronym for Volatility, Uncertainty, Complexity and Ambiguity. By its very definition it can’t be planned for. A management team however can come with an action plan on handling contingencies. The trigger to implement or visit the plan must be key matrices that move beyond a defined or predicted matrix. Once triggered the plan would come into play in addressing the change. Sometimes these could be small changes but need senior level authorization for implementation. At other times situations may demand a more speedy and radical response. Either way, there has to be a contingency plan actively worked on and put into place to ensure that dramatic change (in the business environment) is speedily addressed.
Over the last two decades the world changed more than it did in the preceding five or six decades. In time to come changes could be silent, speedy and devastating. However, the fundamentals of managing these changes, will not really change.