Does disruption create growth?
By: Marti Rillo
Tags: Strategy, Disruption, Change Management, Leadership, Culture

Most of the latest business books or articles you read mention buzz phrases of disruptive growth, disruptive innovation, disruptive technology, disruptive design, etc. Essentially referring to the need to change as otherwise you would end up being mediocre or die out.

Technology and technological advancements require us to totally revaluate how we operate, how we communicate, how we do things differently we used to do. We constantly seek for improvement and how to be better than our competitors. For example, Harvard Business School professor Clayton M. Christensen’s theory of disruptive innovation has lead many executives to understand that we are standing on a burning platform and our options are either to die or jump to uncertainty.

Disruption is a buzzword. But what disruption is and why so many companies are thriving for action? Does disruption create company growth? Is disruption good at all? What happens if we do not change? How can we cope with the future?

What is disruption?

By definition, disruption is the action of completely changing the traditional way that an industry or market operates by using new methods or technology. So it is about finding new ways of working, a new approach, challenging the traditions. It is not settling with the status you are in. In a disruptive environment, you constantly thrive for better and try to figure out how you can positively affect the status quo.

What are those disruptive events? In history, we talk about industrial revolutions, now fourth in the process. We talk about worldwide web and disruptive events while the internet area has completely changed our behaviour, ways of working, ways of communication etc. There is web 5.0 we are talking about already. Or even the current pandemic situation, it is definitely a disruptive event. It has already has changed how we work, communicate, build and maintain our businesses, introduced new business ideas.

We mustn’t mix up the innovation and disruption, nor the technological advancement or disruption. These are different things. Disruption relates closely to managing the change. Therefore disruption is not something that creates growth, by definition or vice versa. Still, disruptive events require us to change.

How to achieve success?

Understanding the need for change and being successful in managing the change are the key factors. Change itself cannot be a goal. The goal is something that you have agreed with your team, company, at the strategy level. It is a vision where you want to go next.

Responding to disruption itself is a transformation that cannot be achieved in days. It is a slow process that takes weeks and months and therefore thoughtful approach is essential. Several very good and thorough change management models can be used — ADKAR, Kotter’s model, McKinsey’s 7s model, to name few.

From my personal experience, having a process to lean on is really useful. Either the change is small or large it is practical to have a model that will guide you through the process. Different change management models have a slightly different approach and are suitable at slightly different occasions but the overall concept is similar.

I will not dive into analysing the change management practices or models at this point but concentrate on transformation success. Successful transformation is related to three aspects, mainly:

Clear and thoughtful strategy;

Good leadership;

Supporting company culture.

Thoughtful strategy to respond to the disruption

The strategy is key for responding to a successful technological disruption, innovation disruption or anything disruption. The strategy should basically give you an answer where the buck is going to be, which customers you will serve, how you will serve them. There needs to be a vision in place and you need to figure out how to turn the opportunities into reality.

I personally value an approach where the strategy is not just a broad concept but you can work towards a specific goal. Also, my strong suggestion is that instead of evaluating your current situation or your current problems, start with the end in mind. This way you can avoid the approach “how you cannot do something” but rather think about “how you can.”

The strategy is not just a broad concept. Instead of evaluating your current situation or your current problems, start with the end in mind.

The strategy is where you describe your ambition, this is the place to show your boldness.

Of course, it is important that the players of the game are involved and know the strategy. You do not need necessarily to involve everyone to contribute to the strategy composition but you need to make sure that everyone knows what they work for — what is the “what”, “where” and “why”. Otherwise, you end with a headless herd who will soon run out of your organisation.

The important thing to keep in mind that the strategy should not be a wishlist but should be followed by a concrete plan on how to achieve the written. In our current organisation, we use objectives and key results (OKRs) at different levels — global, country and business unit level. We work with quarterly and yearly objectives in mind. And it really works!

In summary, the strategy should answer the questions “what”, “why” and “where”. Your team needs to be aware of the strategy as it gives them a purpose. Eventually, you create a plan and answer “the how”. There must be an actionable plan along with the strategy either in the form of OKRs or action plans or something else. This is the first step towards successful disruptive change.

Leading disruption

A leaders role in the disruptive change environment is crucial because of the relationship with the team. The leader does not just influence and guide the team but the leader thrives the vision, makes sure that the strategy is communicated and the team is aligned to it. The leader gets people involved and makes sure that the right mindset is adopted, offers encouragement.

What I have learned personally is that trial and error is not the best approach to manage the change. I therefore strongly suggest coming back to the change management approaches I referred to above. As with anything you want to master, it is the same with the change management, hence responding to the disruption, it takes years of practice.

Detailing down these same models describe in detail the role of a manager, a leader throughout the change process. At different stages of the change process, a leader must be a communicator, advocate, coach, liaison or resistance manager (see for example ADKAR model for leader’s role: https://www.prosci.com/resources/articles/manager-change-management-role).

Things to consider here are how you create awareness of the need to change, how you communicate and create an understanding of the desired future state. Who are the key people to lead the change and how you nourish the environment and company culture?

As a side note, I have to mention that I do not believe in the view that manager and leader are something completely different or management is bad and leadership is good. I believe that the manager needs to adapt to the situation and decide when to be what.

It is sensible to go back to the basics and see what Mintzberg described already back in 1973 about the significance of the different managerial roles (see: Mintzberg, H. (1973). The nature of managerial work. New York, NY: Harper & Row. ). One of the roles of the manager is being effective in interpersonal behaviour. That is the topic that humanist theorists and contingency theorist covered already back in the 1960s (McGregor, Likert, Fiedler, and others) and Mintzberg expanded on it.

In a summary, a leaders role in driving the change to respond to disruption is to keep the vision clear and communicate the strategy and the vision. Stay connected with the team, take responsibility and be transparent and open in the process. A leaders role is to thrive for the vision and eventually support organisational culture. Perception of a leader is often shaped during the transition and therefore it is especially important to get things right.

Company culture

The final aspect is the culture. The influence of the organisation’s culture on the successful disruption outcome cannot be overemphasized. Organisation culture describes your values and your core beliefs. Culture is who you are.

But what is culture? I like the definition that the “ Culture is the tacit social order of an organization: It shapes attitudes and behaviours in wide-ranging and durable ways. Cultural norms define what is encouraged, discouraged, accepted, or rejected within a group.” (B. Groysberg, J. Lee, J. Price, J Cheng (2018). The leader’s guide to corporate culture: How to manage the eight critical elements of organizational life.)

The culture can either support the change or depending on your culture style it can totally block any chance of a successful outcome. For example, if the culture emphasises the stability and maintaining the status quo it would require quite an effort on the cultural level first to set off any change. Or similarly, the organisations where autonomy, individual actions are favoured over greater integration, collaboration, and relationships, would find it difficult to run successful disruptive change.

Source: SpencerStuart

In such cases, you would first need to work on the cultural aspects and make sure that your organisational culture can support the change and you work your way towards flexibility and interdependence. By defining what culture you have and what are the advantages or disadvantages and then decide what are the topics that need to be involved in the strategy and how you align the leadership and culture.

It is obvious that culture affects both your people motivation and engagement with the change. As mentioned at the beginning of this article you should start with the end in mind with the strategy and this involves considering also your organisation culture, leadership and vision

Growth as a result of disruption?

Whether the disruption ends up being positive or negative depends on an ability to adapt to the change and on the ability to stay ahead of the curve. There are three components to look into as described above — strategy, leading and culture.

Strategy requires that you have the end in mind and clear understanding of where and why you are heading and what you want to achieve. After having the strategy in place you can create your action plan and answer the question of how and set the action plan.

A leaders role is to make sure that the organisation thrives for the vision and there is constant work towards the goal. Eventually the last but not least is the culture if the culture supports the change then go ahead, if not then find ways to change it.

You can only accomplish the desired result if you keep the target in mind. Disruption is a global change and to be successful and grow you need to change alongside or change ahead of the curve.