WILL YOUR ORGANIZATION SURVIVE THE AGE OF DISRUPTION?
For the last 35-40 years, American organizations have been led and managed by the concept of continuous improvement. This idea that organizational improvement comes from engaging employees, defining operational strategies, and deploying organizational resources to constantly look at and define ways to improve each process. In many cases, the outcome of these activities was finding ways to eliminate jobs.
My favorite incremental improvement consultant activity was, and is, “Six Sigma”, where: “Employees define ways to improve the customer experience, that lowers costs and builds better leaders.” This program used Karate words like Green Belt, all the way to a Black Belt.
There also is the Toyota University, which has a similar approach to defining how to save $$. Well, these 35 years’ worth of management concepts, I believe are now obsolete - we are now in the new age… of America’ Disruption.
Disruption is defined as: To break apart or alter so as to prevent normal or expected functioning.
Let me define just a few examples of what I am talking about:
- The largest Cab Company in the world owns no Cabs
- The largest property rental company owns no property
- The largest travel agency owns 1 building in Seattle
- The largest retailer owns only 1 store in Seattle
- The largest Media Company produces no media
- The biggest personality communications happen in 144 letters or less
- The largest video company produces no videos
I could go on, but I think you have my point - the “new normal” is something that disrupts almost everything we have called normal for over 35 years. This concept of disruption is and will redefine every aspect of our society: business, communications, politics, travel, healthcare, driving our cars - and the list goes on…
There is a simple reason that this has happened, and why it will continue to happen. With the introduction of the internet, the promise was high for many of its benefits, but it was managed in the same way that all previous significant industrial revolutions had evolved. There were limits to the “band-with” of how the information could be delivered and the amount of “memory space” required for the information to be stored. So, the growth of the power of the internet was limited to the same incremental growth as all the other great monopolies, i.e. Roads, Pipelines, Wires, Trains – you get what I am saying.
Well, about 10 years ago, band-with and memory no longer limited the growth to the companies that had the monopolies – Software had no limits – The World has been disrupted:
“About 10 years ago Amazon started its Cloud computing business, what started as a service to provide cheap storage for software developers, soon added computer power for rent on a pay as you go basis, enabling a new generation startups such as Airbnb and Pinterest to focus on building apps rather than the technology infrastructure support for their products” [quote from the Seattle times 3/15/16]
In essence, there are no barriers to starting an on-line business. All you need is a well -defined problem, which the internet can serve to change, by putting a solution on-line. Once developed, it’s all about marketing and communications.
IS YOUR ORGANIZATION GOING TO SURVIVE THE AGE OF DISRUPTION?
The answer to this question is at the very soul of every organization – for profit or non–profit - in the country. You can no longer just try to increment Getting Better, you now have to try to make a transition into an initiative-based change organization. Organizations will now survive by being able to do rapid change. The skills for this management behavior are 180 degrees different that the processes of incremental change management of the past 35 years.
Today’s organizational culture must rely on much higher levels of collaboration – more frequent problem solving and conflict management. The ability to share vision and get every one to be “All-IN” for making change, (even if there is not a clear vision of the outcome of the efforts). The new organizational culture will need much higher levels of positive trust and respect; the organization will have fewer management layers, and will require the ability to maximize the power of a multi-generational workforce.
Starting a new company to solve a defined problem may be easier than trying to change an existing organization that can’t re-engineer their culture from incremental operations, toward Being Great at risk. I will close this post with one of my favorite stories:
Back in the days before electricity, in the great state of Iowa- during the winter a crew of men would go to the river and cut Ice Blocks. They would store them in an insulated building, and then in the spring and summer they would sell the blocks of Ice to the local residences for their “Ice Box “.
Once electricity was harnessed, someone invented the compressor and now Ice could be made in a freezer –So the business went from the river to the freezer.
Later, GE invented the refrigerator and now there was no need for Ice Blocks - the world changed to the Ice Cubes.
The point of this story is that in each of these transformations the company that had the river Ice business never made it to the guys that invented the freezer. The business that harnessed the freezer never made it to the refrigerator.
We are in a new world of disruption and “the way we use to do it” is no longer going to compete in “the way we will do it” world. The only chance is to embrace the possibility of change, and develop an organizational “All-In” culture that embraces Change, Flexibility, and Risk.