At our Future Talent Leaders' Club event with Oxford University's Saïd Business School, we considered four disruption-related questions for leaders.
How can we reinvent ourselves?
How can established business models reinvent themselves for the fourth industrial revolution? To explore this, Dr Andrew White, Saïd Business School’s associate dean for executive education, recounted an anecdote told to him by the CEO of just such an organisation:
“For the past 35 years, it’s like I’ve been climbing a mountain,” said the CEO. “That mountain represents my career, the company and the industry I’ve been a part of. It’s as if I’m stood at the top, with every success, but we’re surrounded by fog; I’ve no idea where to take us, it’s as if the ground is crumbling beneath me.”
White’s subsequent discussions with other business leaders revealed a consensus.
“When I told them this story, I found that bankers, leaders in retail, insurance, the music industry… all would nod in agreement,” he said. “When you’ve got something that’s established and successful, how do you reinvent it?” The more successful you are, the more you find that what you do starts to become the thing that binds you up.” To help leaders unlock conversations around reinvention, he suggested four questions to pose to their organisations, followed by a further four to help launch them on their change journey (see box, p22). “To learn, you have to become childlike,” he added. “Start-ups can ask these questions, because they’re unconstrained by their past. The world’s their oyster, they’re always learning. When you’re an adult (or senior leader), it’s harder to say ‘I don’t know’, because social groups project onto leaders a need for clarity, for certainty.”
How can the arts and humanities help us navigate disruption?
Marc Ventresca, an economic sociologist and associate professor of strategic management at Saïd, pointed out that “disruption is all about pulling things apart and breaking things up. Conversation means ‘to turn over with others’.
“The claim I want to put to you is that we need to think more about the humanities, the arts; we need to understand old, old questions that get reframed in new ways,” he said.
“At Saïd, we look at very contemporary problems and challenges through the lens of the humanities, the arts, theatre, to ask different kinds of questions. And to do that we’re having conversation, to turn over ideas with others and give us more fruitful, actionable and potentially complex answers.
“This is towards complexity,” he admitted. “The mark of a good leader is someone who is able to hold fully contradictory certitudes at the same time and still act.”
Proposing “this house believes that the work of leaders engages the passions and not the interests”, Ventresca highlighted both the work of social scientist and economist Albert O. Hirschman whose book The Passions and the Interests takes a different perspective on the rise of the modern market economy, and Miguel de Cervantes’ Don Quixote, which formed the basis of a leadership lesson by former Stanford professor James March.
“Don Quixote said: ‘I know who I am,’ explained Ventresca. “This is the basis for a line of work saying that leading must be grounded in passion and discipline – and there needs to be joy as well. You have to find something that renews and sustains you over the long term.
“In this age of disruption, we have to believe, we have to find joy, we have to look for discipline to harness the passions that define us,” he concluded.
What constitutes resilience and how can we achieve it?
To survive the uncertainty, ambiguity and complexity of disruption, organisations and individuals must cultivate resilience – but what does this mean?
For Saïd fellow in management practice, Dr Eleanor Murray, resilience is “a dynamic concept” involving an organisation’s capacities, capabilities and cultures being able to anticipate disruption proactively and react immediately.
“One interesting factor is that, as volatility increases, we’re seeing things we once viewed as major crises, as minor disruptions,” she said.
Another is a current change of focus around resilience. “Businesses have been helping their people to become more resilient, so there’s been a massive increase in personal resilience training,” she noted.
“There’s beginning to be a push-back, with people asking ‘why aren’t you, as an organisation, finding ways to become more resilient?’” To achieve this, leaders must become adept at managing contradictions; for example, businesses must be both reliable (efficient, cost-effective, waste-free) and agile: able to anticipate trends, react to disruption and to innovate and flex at short notice.
Effective businesses are using their whole workforce to spot potential trends and signals – and are receptive to these, said Murray.
“There’s a tendency for businesses to work with a narrow suite of indicators or intelligence around current performance,” she warned. “Part of resilience is broadening these to consider what’s coming towards us.”
With interpreting signals, it’s all about “having the mind-set, that openness to take on new ideas: listening to trends that might contradict existing ways of working” – and, of course, taking action as a result.
Undertaking scenario planning is one practical way in which leaders minimise risk, stress-test strategies or open up conversations with stakeholders.
Senior fellow in management practice, Trudi Lang, explained that unlike models, which are based on a set of assumptions and parameters, or forecasts, that tend to extrapolate from the past, “scenarios simply use the future as a perspective on the present” to help leaders make more robust decisions. They can be used at the start of the innovation process through to reframing an organisation’s identity or taking key decisions.
The willingness to undertake such planning is “dependent on all leaders,” stressed Murray. “It’s not just C-suite, but about using all leaders to gather intelligence, and being receptive to different ideas of change and willing to take robust action, even in the face of uncertainty.”
How is machine learning transforming the future of work?
Machine learning – whereby computers are fed data and learn things they weren’t explicitly programmed to do – is not new, pointed out Saïd professor of operations management Matthias Holweg; what has transformed it is today’s abundant computing power and the sheer quantity of available data.
Naturally this is disrupting every facet of society and introducing ethical issues around privacy, replication of results and algorithmic bias.
“Technology has displaced humans from the workforce every time it has been introduced; but it has also created opportunities,” said Holweg. “So the interesting question is not whether it will displace human labour, but in what form and what opportunities may arise; what will be its net effect?”
He believes that “virtually all professions will be augmented by artificial intelligence (AI); for example, using machine-learning tools to go through evidence in court cases; or image-recognition technology in medical diagnostics. However, three human qualities remain challenging to automate: complex social interaction, creativity, plus sensory perception and basic physical manipulation.
“Those are the three areas where the human has an advantage,” he said.
This means that today’s leaders need not fear a takeover by the machines, concluded Holweg, but he cited the famous words of American computer scientist Roy Amara: “We tend to overestimate the effect of technology in the short run, and underestimate the effect in the long run.”