Keynote: The Disrupted Mindset #KMWorld

Speaker: Charlene Li, Analyst & Author, The Disruption Mindset: Why Some Businesses Transform While Others Fail

Session Description: Growth is always hard, and disruptive growth is exponentially harder. It requires companies to make tough decisions in the face of daunting uncertainties. Some organizations beat the odds and succeed at becoming disruptive: Adobe, ING Bank, Nokia, Southern New Hampshire University, and T-Mobile, among them. Their stories make it clear that organizations don”t have to be tech start-ups or have the latest innovations to transform. What they need to do is develop a disruptive mindset that permeates every aspect of the organization. Li lays out how to do so by focusing on three elements. A strategy designed to meet the needs of future customers; leadership that creates a movement to drive and sustain transformation’ and a culture that thrives on disruptive change. Drawing on interviews with some of the most audacious people driving disruptive transformation today, Li will inspire leaders at all levels to answer the call to lead disruptive transformation in their organizations, communities, and society.

[These are my notes from the KMWorld Connect 2020 Conference. Since I’m publishing them as soon as possible after the end of a session, they may contain the occasional typographical or grammatical error. Please excuse those. To the extent I’ve made any editorial comments, I’ve shown those in brackets.]

NOTES:

• Disruption is an opportunity for change — and it’s an opportunity for growth. The needs of our customers and clients don’t go away although they definitely change. When things are going well, people tend to disrupt and innovate less. However, when times are bad then time is ripe for disruption.
  • Microsoft was formed during the oilshock recession in the 1970s
  • The iPod was launched just after the tech bubble burst
  • Uber was created during the global financial crisis of the last decade
• The Disrupted or the Disruptive? Who are you going to be? There are only two choices.
• Focus on People and Transformation — You must look beyond the technology. It isn’t just about the cool tools. It’s about finding new ways to use them to open new opportunities.
• Focus on the Future — know where your customers are but, more importantly, figure out where they will be. (Wayne Gretzky: “Skate to where the puck will be.”)
  • In 2010, Adobe realized that the way they distributed their software via CD-Roms was not as efficient as using the cloud. However, their customers were perfectly happy with the current situation. In addition, their employees were perfectly happy serving customers using this model. Finally, as a publicly traded company, moving from software to the cloud would temporarily depress their revenue and ramp up their startup costs. Despite all of this, they moved forward. Even though their net income plummeted, the stock market rewarded them for being forward-thinking. This was due to the fact that Adobe did such a good job of explaining who their future customer was.
  • Lesson: Don’t get blinded by your beautiful, profitable customers. It is important not to be seduced by the ease of your current situation. You need to find and fall in love with your future customers.
  • Audience Poll: a small number of attendees are in organizations whose entire workforce is focused on their future customer. Only one quarter of attendees have a small group focused on figuring this out. A smaller group are not evenly slightly focused on their future customer.
• Fall in Love with your Future Customers
  • Use Empathy Maps to Spark Curiosity — figure out who your future customer is. What do they think, feel, say, and do?
• Put Future Customers in your Dashboards — once they are on your dashboard, they become a priority. This is an important signal to your team.
• Connect your Customer-Obsessed People — wherever they are in the organization. They are the ones who are always seeing opportunities for greater service and sales to customers. This allows you to develop an organization-wide view of your future customer. And it gives your employees an opportunity to cross-fertilize innovation and disruption.
• Leadership — as always, leadership is critical for success. The best leaders make you feel empowered, inspired, limitless.
• Disruption Needs to be a Movement — movements take on a life of their own. They continue well beyond the life of the leader. (Heimans & Timms, New Power: “It’s only a movement if it moves without you.”) This happens when the leader constantly and consistently communicates their vision.
  • T-Mobile consciously decided to meet its future customers by becoming the “un-carrier,” the opposite of everything customers hated about the other mobile carriers. They began with a manifesto that fed the passion and directed the actions of T-Mobile personnel.
• What is your Disruption Quotient? On a scale of 1-10, where 1=status quo and 10=disruptive, where are you? If you are on the low-end, you cling to the status quo. If you are on the high-end, you are naturally disruptive.
  • Note: the goal is not to be a 10 on this 1-10 scale. If you are a 3 and your organization is a 1, then you are a leader. If you are an 8 and your organization is a 10, then you are a laggard.
  • Audience poll: attendees say they are 6.2 out of 10, on average. However, they say that that their organizations are 5 out of 10 on average. This is close to the usual result where most people tend to believe they are approximately 1.5 points more disruptive than their organizations.
• Shift your Culture to Support Disruption — if you want to change your organizational culture, you need to change your organizational beliefs.
  • Orange Bank created their “Orange Code” to drive cultural transformation:
    • You take it on and make it happen
    • You help others to be successful
    • You are always a step ahead
• Three Beliefs of Disruptive Organizations:
  • Openness
  • Agency
  • Bias for Action
• Openness — Openness in information sharing and transparency in decisions builds trust and accountability
  • According to the chairman of Nokia, Risto Siilasmaa, sharing is good. To make this clear, he had the following principles:
    • “No news is bad news. Bad news is good news. Good news is no news.”
• Openness Best Practices
  • Create a safe and inclusive environment. It is hard to share if you do not feel safe. The first step is to make sure they believe
  • Put vital data where it can best be use. It is important to share as much information as possible, as widely as possible.
  • Breaking down silos may not be the best approach. They are important because they enable expertise. The better approach is to install windows in your silos.
• Agency — This gives every employee the opportunity to act like an owner. (It is different from “empowered,” which relies on permission received from someone else.)
  • Sponsor agency in every employee
  • At Amazon, they have adopted the principle of ownership:
    • “Leaders are owners. They think long term and don’t sacrifice long-term value for short-term results. They act on behalf of the entire company, beyond just their own team. They never say, ‘that’s not my job.’”
• Best Practices for Agency
  • Demonstrate trust in their judgment — people will not act boldly if they are uncertain of your support.
  • Shift ownership and authority in chunks — give them what they need to act decisively.
  • Connect emerging leaders for peer support — it is hard for some employees to view themselves as owners — particularly if they feel as if they are acting alone.
• Action – sometimes the thing that is holding you back is a critical bit of information. So you and your organization should identify and share the Minimally Viable Data required to take action.
  • Southern New Hampshire acquired the Daniel Webster University in FIVE days. They did this by developing a bias for action and distributing widely the necessary decision-making power. [Of course, this also requires tremendous trust in your team.]
• Best Practices for Action
  • Develop Extrasensory Skills — invest in and develop your employees’ extrasensory skills to seek out growth.
  • Force decisions and action by imposing impossible deadlines. This requires decision making without complete information. [It acknowledges that despite our fondest wishes, we rarely have complete information. So this approach reduces analysis paralysis.]
  • Define the decision field — most decisions are reversible. So be clear about which decisions can be revisited safely and which ones need to be done right the first time.
  • Define your edges of action — if people don’t know what the edges are, they tend to stay in the center and avoid discomfort. So help your people understand how far they can go. Then they can push themselves to the edge and still feel safe.
• What Beliefs Hold Us Back?
  • Some people believe that they need permission from someone else to make change,
  • Some people say that they don’t have the right role / position / title to make change,
  • Some people say that they do not have the budget / people / resources to make change. However, this is more a matter of priorities and allocation of resources. When do you set aside the urgent and focus on the important work of defining your future?
• Comfort Zone is Danger Zone — during these turbulent times, it is very natural to want to stay within your comfort zone. However, that is a recipe for stagnation. Instead, push yourself to the edge of your comfort zone. This teaches you how much more you are capable of. “Look over the precipice and see what is there. Then take just one step back and operate there. Build the scaffolding within your organization to support you at that edge.”
  • “You don’t know how far you can go until you reach the edge.”
• Charlene Li encourages us to be in touch with her. She would like to hear how we are figuring out how to stay at the edge of discomfort and disruption. Here are her contact details:
  • Twitter: @charleneli
  • Email: Charlene@charleneli.com