technological change, huge financial crises, political turbulence and
natural disasters in the last two decades have made disruptive events
virtually inevitable in business and industry. Yet some companies manage
better than others and some even come out ahead.
"Captains in Disruption," a Strategy + Business article by Ken Favaro, Per-Ola Karisson, and Gary L. Neilson,
reports on the experiences and actions of CEOs who not only guided
their organizations to survival but were able to shift trouble and
turbulence to organizational advantage. To lead effectively in such
times, these authors say, CEOs have to anticipate the kinds of
disruptions their companies may face, including natural disasters in
remote locations that could disrupt their supply chains. Then they have
to prepare an adequate response, and find a way to implement it
effectively. And of course, none of that is easy.
They quote Clayton M. Christensen, professor and management professor who first examined the dynamics of disruption in his book The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail.
"How can you make sense of the future, Christensen asks, "when you
only have data about the past? That’s the role of theory, to look into
the future.” That means being able to analyze data to spot changes and
figure out what they mean, which is especially hard when analysis
depends on the strength of the limited data and risk models. Further,
Christensen says, leaders often lack candid insights from people at all
levels of the organization, which they need plan effectively.
to disruption may need organizational redesign and culture change, the
authors write, and if top executives have become isolated, they need to
begin interacting informally with people throughout the organization who
understand first hand what works and what doesn’t. Cross-organizational
interaction, the authors write, is by far the biggest accelerator of
is an executive who took on a tough job during a time of disruption. In
mid-2012, Jenkins was head of the retail and business banking division
of Barclays, then the U.K.’s second largest bank. Then the LIBOR rate rigging scandal broke, exposing a series of fraudulent actions connected to the London Interbank Offered Rate (LIBOR),
a primary benchmark for short term interest rates around the world. The
bank’s chairman and CEO resigned, and Jenkins took over as CEO. The
article explains Jenkins immediately informed the bank’s 140,000
employees that the focus on short term goals and immediate profits were
out and a new long term strategy for transformation was in. Jenkins says
the "cataclysmic experience” made people ready to listen. Jenkins
emphasized involving all stakeholders in asking the right questions to
move forward. In addition to bank employees, he met with politicians,
media, consumer groups and regulators and listened to their criticisms.
organizational change needed to respond to this cataclysm, Jenkins told
S+B, "is about being continually dissatisfied with that you are
doing...It’s about constantly challenging and creating an organization
that is never satisfied.” What makes that kind of thinking hard,
Christensen told the authors, is the human tendency to be complacent and
forget to ask good questions. As an antidote, Christensen points to
the famous phrase of former Intel CEO Andy Grove: (and the title of his book) "Only the Paranoid Survive." Read the S+B story here.