Leadmore ® Newsletter November 2016

 

Disruption is back to the basics of customer driven leadership

Having been a silent spectator of the voluminous hype around disruption, and attended several conferences on the topic together with hundreds of management peers, I now feel like sharing some of my reflections on the matter.

Judging by the extent of academic research, social media interest and attendance at conferences, disruption particularly seems challenging for established players.

 

It is not only about technology – simplify by putting customers first

It’s true that computing power, big data, telecom networks, mobility, artificial intelligence, robotics and 3D-print among others have expanded the possibilities and accelerated speed of disruption. Most are new entrants and others are to protect and develop their current business. Apparently, things seem much easier for new entrants starting from scratch, where as the “incumbents” often struggle as they get paralyzed and caught in a technology spider web, a catch enforced by fear of leaving their comfort zone.

Although, I may not be among the true and best disrupters of this world, I have progressed by simplifying the challenge. My key point is, that it is not only about technology, and certainly not in the first place. You can benefit from taking the complexity and discomfort out of the discussion by simply focusing on three very basic things in the first place, i.e. how you can make life better, easier and cheaper for your customer?

Value innovation – more for less

For years, I have my-self leaned on the customer centric value-innovation concept designed to achieve product differentiation and lower cost simultaneously, i.e. the ability to provide more for less rather than more for more. Many have researched on this, but my personal reference is Ben M. Bensaou, Professor of Technology Management at INSEAD with whom I had the pleasure to cooperate during my time as CEO of TDC Nordic Mobile.

In brief, the value innovation concept, is about re-engineering the value curve of your product or service and creating a “blue ocean”. Which current features can you eliminate or reduce to save cost? Which features can you increase or introduce to differentiate, leaving you as well with economies of scale stemming from increased demand? I prefer this approach to the technology approach, as the Cirque du Soleil case is a perfect example that disruption is not necessarily driven by technology, but rather strategic thinking, customer insight and a differentiation mindset.

Don’t chase technology in the first place, think about the customer experience and then find the technology, it is definitely there. Put your-self in the customer seat instead of the CTO seat. Think wild and wide – and don’t be afraid of being perceived a little ridiculous for a moment or two by your colleagues. Ultimately, you can apply co-creation to involve customers, which can maximize creativity and commitment on both sides of the table. Then ask your CTO to find the enabling technology. Not to forget your CFO to find out, if you will be able to make money on it.

Managing disruption is very much about leadership

The threatening disrupters are not only masters of new technology and business models, they are typically also better at execution than the established players. Even the best plan can fail with average leadership, while the second best can become successful with value-adding leadership. Thus, your management skills need to be fertilized by your value driven leadership, which is about creating and sharing visions of unique value propositions and enabling your organization to deliver. Over the years I have my-self experienced how difficult it can be in practice. Extremely busy workdays with so many things to get fixed to survive current business challenges and secure our bread and butter. The best in the old school may be eminent in continuous, yet incremental improvements and productivity gains. However, they risk becoming the best in a declining market and miss out the new train.

It goes without saying that setting the right direction and making the right priorities is pivotal. However, a classical trap is that everything becomes priorities, some more, some less, but anyhow priorities. Thus, you must involve the “true experts” in your organization and among your customers, and dare to deselect something by making your bold bets – that’s value-adding leadership. Try out for instance an approach where your own disruption isn’t about your “shaggy” future, but the solution to your current challenges – think more than just one step ahead.

The board and executive management need to lead more

Exploiting disruption for value growth is much more than technology management. It is as much about leadership. The board and executive management need to strike the right balance between its control and approval duties as well as business development duties. The latter entails anchoring the right direction, creating maneuvering space, setting up ambitious goals and deadlines, and last not least securing the right competencies to execute – either internally or through external networks and partnerships. In most cases, admittedly easier said than done. But, by allowing your leadership to be guided by what you can do to delight your customers, you will at least narrow the scope of what needs to get done, and how.

Enjoy disrupting your-self.

Mads Middelboe

Executive Advisor & CEO

Leadmore ®

 

 

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