SHAKE THINGS UP:
Thriving in the Face of Disruption
By Vitra Gopee
LINKAGE Q4 (2024) - OPPORTUNITY IN ADVERSITY
Easy times do not create character, and our mettle, strength and conviction are tested especially during times of uncertainty, turbulence, threat or strife. While learning things the hard way is never our first choice, the need to overcome challenges encourage us to think ‘out-of-the-box’, explore alternative solutions, and embrace change. Change is difficult and painful and calls upon us to be resilient. From the lunchroom to the boardroom, we have all heard the term, but what does it really mean to be resilient, and how can it benefit us as individuals and businesses?
Named as one of the main trends for business in 2024, resilience is the mental ability to bounce back from difficult experiences; the soft wiring that allows us to successfully adapt to stressors to maintain psychological well-being in the face of adversity. Psychologist Carol Dweck coined the term “growth mindset” to describe the belief that acumen and abilities can be developed through perseverance and hard work. Individuals can therefore harness the power of resilience and use adversity as a catalyst for personal and professional development provided that their ‘soft wiring’ supports a growth mindset.
ACTIVE INERTIA
In this era of unprecedented technological convergence, digital transformation has emerged as the key to survival and success for businesses worldwide. As Phil McKinney, author of Beyond The Obvious and CEO of CableLabs, states, "Without a robust and resilient innovation strategy, no company can survive." Organisations must act early, break through, and embrace innovation with a deliberate mindset, determined energy, and resilient spirit.
Once globally iconic companies, like Kodak, Blockbuster and Xerox, faced with technological disruption, failed to take tough actions to innovate, irrelevance and obsolescence became their fate. Donald Sull from the Harvard Business Review calls this phenomenon “active inertia”, which he defines as “an organisation’s tendency to follow established patterns of behaviour—even in response to dramatic environmental shifts.”
Companies get stuck in ‘strategic frames’, in debilitating responses, preferring to hold onto the status quo, rigid rules and dogma, staying shackled to business practices and processes that allowed them to succeed in the past, but which limit their flexibility, adaptability and agility. Studies have shown that 75% of change initiatives fail, primarily because they either do not deliver the desired results or fail from the start. Blockbuster, for instance, doubled down on its retail stores strategy despite overtures from Netflix. Kodak invented the digital camera and later dismissed it as “cute”, preferring to overlook the technology so as not to disrupt their existing business model. Similarly, Xerox chose to reinforce its focus on paper copies, ignoring the advanced digital communications technology it had also pioneered. These companies paid the price for their hubris…too successful to fail and ending up as "unsinkable" industry Titanics.
With the rapid pace of emerging technologies such as AI, machine learning and the Internet of Things, which enable automation and optimisation of processes, predicting future disruptions has become increasingly difficult. Disruption is inevitable, and with innovative entrants and game-changing technologies, businesses that stubbornly adhere to outdated routines only make the process of inevitable change more painful. As M.S. Rao noted in Entrepreneur Magazine, CEOs dealing with disruptive change "must prepare to overcome volatility, uncertainty, complexity, and ambiguity." Leadership mindsets and organisational soft wiring must evolve to invest in digital technologies, pivot to new business models, build supporting competencies and capabilities, and foster a culture of communication, collaboration, and continuous improvement. The meteoric rise of companies like Uber, Lyft, and Airbnb reinforces the idea that change is necessary to stir creativity, innovate, and outperform.
LEADERS MUST EMBRACE CHANGE
To ensure survival and success, a company’s leadership must focus on long-term strategies that embrace change, adopt the right technologies, foster agility to execute business goals, and create a culture that encourages learning, innovation, and which puts the customer at the centre to understand Simon Sinek’s “the Why”, the purpose of business and the reason it exists. Jeff Bezos understood this when he built Amazon into one of the world’s most successful companies, fulfilling his promise to customers by delivering products reliably and quickly. Kodak, as another example, should have continued to focus on its iconic ’Kodak Moment‘ while also planning and preparing for ‘the big picture’, embracing technological change that could have kept them ahead of the curve.
The authors of If it Ain't Broke...Break It!, Robert J. Kriegel and Louis Palter, argue that breaking things is the only way to challenge conventional thinking and stay ahead of the competition. I want to push this further by challenging businesses to "break it...better." Start with the end goal in mind and redesign the business to produce the new results you’re looking for. There may be a risk that you may not put things back together as they were, but the goal is to break it better, to break through, and to build it better. Amazon, established in 1995 as an online retailer of physical books, promoted itself as “Earth’s Biggest Bookstore” and had moderate success. In 2000, Amazon launched its third-party marketplace to become the go-to online retailer, later in 2006, began offering cloud computing services and in November 2006, its launch of Amazon Kindle sold out in less than six hours. Over the next decade, Amazon consistently diversified its portfolio acquiring major companies like Audible and Whole Foods and as of August 20, 2024, Amazon had a net worth of US$1.87 trillion.
"Preemptive transformation…is an absolute necessity,” writes Boston Consulting Group managing director and senior partner Grant Freeland. The actions that a company deliberately takes today create the business of tomorrow. Grounded in the Japanese philosophy of kaizen, or continuous improvement, preemptive transformation and the concept of "break it...better" are fundamental mindsets for innovation, growth, and thriving. By proactively looking for ways to close gaps on weaknesses, capitalise on strengths, and evaluate risks, companies can avoid being outperformed. Steve Jobs’ “Think Different” revolutionised the tech industry by reinventing the boundaries on Apple’s innovative user experiences, developed highly innovative revenue models (99 cents for digital songs), created entirely new channels with iTunes and reimagined the Apple in-store retail experience.
Fredrik Nilsson, Vice President of the Americas for Axis Communications, emphasises that in the IT industry, "fixing things as they break just isn’t good enough." When something is "broken," it usually means attackers have already breached its defenses. Placing emphasis on preventing the next attack is critical. The value of being proactive is evident: looking ahead, keeping pace, being adaptable, and continually improving and innovating will keep you ahead. Adaptability is crucial, allowing companies to swiftly maneuver critical resources to respond to changes. The "Platinum Rule," as outlined by Tony Alessandra and Michael J. O'Connor, suggests that adaptability is a two-part process, combining the skills of flexibility (your willingness to adapt) and versatility (your ability to adapt). Adaptability, therefore, cannot be a one-off, knee-jerk response but should be married with consistency to maintain crucial momentum, ensuring that business success is sustained into the future.
Martin Reeves, a veteran colleague of the BCG Henderson Institute, urges companies to pursue change early, "before financial performance has started to decline," and often, or more accurately, continually. "To be able to transform preemptively," he writes, "leaders need to anticipate change by continually exploring new options." He suggests a two-pronged approach: a combination of big steps "to move to uncharted terrain" and small steps "to uncover adjacent options at low cost." Despite this wisdom, many successful companies continue to coast through on autopilot, banking on current momentum without recognising that such complacency leads to stagnation, weakened adaptability, and declining agility. Alarmingly, Reeves notes that "one out of five underperforming companies and one in four severely underperforming companies launch transformations." By comparison, just 15% of "outperforming" companies do so, indicating that the "breaking better" mindset and the will to outperform have not yet caught up with the reality of disruption, disintermediation, and digital transformation.
Organisations must prioritise innovation by committing to outperforming, continually scanning the landscape for emerging technologies, adopting an open and curious mind about possibilities, and approaching resourcing investments as marathons with staying power. They must support brainstorming, testing, and analyzing results to move forward and execute on closing gaps. The cycle of innovation will continue, and technological revolutions have enabled companies like Amazon, Apple, IBM, and Hyundai to capitalise on disruption and dominate. Similarly, agile companies like Alibaba, Airbnb, and Uber have successfully challenged traditional business titans with their strategic agility, entrepreneurial energy, visionary leadership, digital capabilities, and culture shifts.
Jason Richmond, a Forbes Council Member, in his article "How Companies Can Find Opportunity In Adversity," points out that "new competitors and dramatically changing technological advances have already caused an increase in competitive volatility." While only "one in three companies successfully navigates disruptive shifts, those that do often emerge stronger than before," according to BCG Henderson Institute’s "Advantage in Adversity" research.
So, what should outperforming companies do to thrive in the face of adversity and disruption? Here are key strategies:
• Commit to a long-term vision, strategy, and planning: Continuously assess customer needs and reassess business strengths and weaknesses.
• Create and execute a ‘digital first’ strategy: Align the customer buying experience with competencies, capabilities, culture, and commitment. With 87% of consumer purchases involving digital elements, businesses must build out digital routes to enhance their business models.
• Prioritise people in the digital culture: Invest in training and upskilling resources, recruit good talent, and foster a culture of open communication, collaboration, and innovation.
• Be adaptable and agile: Pursue relentless learning and continuous improvements, constantly re-evaluate and refine strategies, and ensure leadership and decision-making are nimble enough to pivot when required.
• Get top-level commitment: Ensure that the board and executive leadership set the tone for early action, accountability, and innovation, driving a culture of outperformance and "breaking it better."
• Take action: Shake the status quo, fail fast, fail small, and ensure that vision translates into action quickly to avoid complacency and politics, override past practices, and understand that success often comes from a series of failures until it's right, relevant, and resilient.
I
f you aren’t willing to disrupt yourself, someone else will. The mindset to outperform pushes us to operate at our optimum. Fear may keep us shying away from change, but it takes courage to shake things up, innovate, and face potential missteps or failures when things are going well. It is during times of disruption and adversity that we stretch our limits, express our full capabilities, and discover the reserves within us. Coming through trials and testing conditions is how we develop resilience, seeing adversity as a leapfrogging opportunity rather than a stumbling block. As Frank A. Clark aptly said, "If you find a path with no obstacles, it probably doesn’t lead anywhere."
ABOUT THE AUTHOR
Vitra Gopee is a dynamic sales and operations executive with 25+ years of proven success in the ICT services industry, driving performance improvements across top and bottom-line P&L, service delivery, and client engagement.