While innovation is often seen as a positive, (r)evolutionary force driving competitive advantage and growth, disruption tends to be associated with risk and cost. By framing your current – and future – context differently, and viewing disruption through the same lens as innovation, organisations can harness the creative influence of disruption and take advantage of the opportunity it offers. Contributor Claire King, Programme Director – Innovation Arts.
A: Agile strategic planning
How do we plan for disruption? First we must break free from the tunnel vision that bakes our narrow expectations of the future into strategies, processes and forecasts. One way successful companies do that is by using scenarios. Just as an architect would consider plausible scenarios for a building, from stress factors on materials and structure to evolution of usage, so we do the same in business. By exploring possible disruptive events, priorities and options can be identified. For example, a Top 5 services company evaluating their offshore capability explored the implications of exponential growth; a competitor poaching scarce employees; a regulatory change halving demand and a catastrophic natural disaster. By proactively architecting for a wider range of possible futures, focus shifts from risk mitigation to opportunity exploitation, anticipating, innovating, and taking advantage of hindsight with foresight.
Scenarios help us picture where we think we are going, but will it still be there when we arrive? Much programme management measures progress against a project plan, which works in times of stability, but when facing disruption it is more important than ever to track towards strategic objectives in a systemic rather than linear way. Even while building and using the solutions we devise, we maintain one eye on the horizon, using short, iterative planning cycles and regularly reframing to course-correct when necessary. This balances the paralysis of doing nothing with the risk of being swayed by sunk costs.
B: Break patterns of thinking:
The cognitive bias that affects all our judgement must be resisted if an organisation is to stay ‘disruption fit’. Companies that thrive on disruption always expect to be surprised and challenged, meaning their leaders are less likely to revert to cognitive rigidity in times of stress (and disruption is inevitably stressful, particularly when it comes from an external force). Consider the UK government preparing Brexit: pressures of time, emotion and resource do not provide the best conditions for innovative thinking, yet ‘we’ve always done it this way’ is no longer an option.
Similarly, many manufacturing industries, whose business models are not built around sustainable materials and processes, are now held to account on sustainability by consumers, customers and government. How do C-suites react effectively in real time to such obligations – which may well fundamentally affect strategy – whilst still planning for the future and satisfying shareholders?
One practical approach is to take pressure off leadership by becoming adept at collaborative decision-making. Releasing control takes courage and may require a mindset change, particularly amongst the top team, but engaging the right diversity of experience, expertise and information, combined with a rigorous, facilitated approach to systemic complexity delivers outcomes far more robust than if decisions had rested with the CEO alone. Preparing such processes is a specialised task, but Innovation Arts believes that investing in that preparation is the most effective and efficient way to get the most out of your top talent in the face of disruption.
C: Culture is key.
Collaborative strategic planning can strengthen your hand in the face of disruption, but only if your culture and measures support it. How do you collaborate when leaders are not always incentivised to pull in the same direction?
Innovation Arts recently worked with a group of leaders from the UK finance sector including industry incumbents, FinTech startups and regulators to create an industry-wide tool. The confluence of several new regulatory obligations combined with the uncertainty of Brexit has meant a moving feast of disruption and transformation. Some stakeholders were in direct competition with each other but all agreed that an industry approach made sense. During the collaborative session, the Design Thinking principle of ‘divergence then convergence’ gave all constituencies a voice, pooling the wide range of perspectives and expertise. This meant various possible models could be identified and tested, before converging on a solution beneficial to all. Modelling is an extremely effective as a tool for alignment, allowing models, rather than points of view, to be subjected to scrutiny against a common goal.
A culture that tries to minimise the impact of disruption will suffer far more shockwaves than one that relishes its challenge. Engaging an organisation with the behaviours that drive that culture, and measuring success, however, is notoriously difficult. But tools like Games Science are now providing metrics, and helping ensure that organisations are on track culturally at all levels.
For an HR Director, planning for disruption provokes numerous questions: Do recruitment processes welcome disruptors into our organisation and culture? What values do we embrace that support agility and disruption fitness? What behaviours are we trying to encourage? One thing is certain: whether a disruptive impetus comes from within or is driven by an external force, by getting smarter at working with it rather than against it, your organisation can harness its power for good.