CIO Upfront: How to lead through technology fuelled disruption
- 17 March, 2015 11:42
The simultaneous impacts of factors such as the speed of technology-induced change and globalisation further accelerate these changes.
Established organisations whose business models are predicated on the assumption that a fine tuning of their current strategies, structures and business processes will guarantee future viability may be ill prepared when faced with the inevitability of disruption.
20/20 hindsight is a good thing. The litany of cases where organisations have failed to read the signs of disruption are well known and researched. Kodak and Polaroid are well known such examples.
The question is: What can business leaders do to ensure their organisation thrives and survives in the face of increasing technology-induced volatility?
The inertial organisation meets disruption: Who wins?
All organisations, whether public, private, for-profit, not-for-profit or Government, intrinsically face the same challenges in ensuring their ongoing financial viability and efficiency whilst remaining relevant and valued in the eyes of their stakeholders.
Even though the latest technology offering may be compelling, the acid test is how, if at all, organisations can exploit these technologies and innovations to their advantage with known cost, value and risk. This tests the organisation’s intrinsic ability to truly deliver when it comes to making the necessary changes – not everyone will come out a winner.
Past successes contribute to organisational inertia, and overcoming this inertia presents business owners and executives with a complex set of challenges. For incumbent and mature organisations, the foundations on which the capability for ensuring enterprise-wide resilience and adaptability has often little to do with the latest technology.
Next: Five things to consider
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In exploring this theme in more detail, consider there are five things to consider:
1. How effective is the organisation’s ‘over the horizon’ radar?
Does the organisation’s internal culture support a capability for reading and interpreting the early tell-tale signs of disruption? What listening strategy is evident?
Those organisations with poor staff engagement, rigidly reinforced functional silos which contribute to territorial factions, not to mention having a reliance on a revolving door of casual employees, contractors and consultants, face an real challenge in building a cohesive culture. This would stand in stark contrast to organisations based on a collaborative, adaptable culture where all participate in the identification of potential risks, threats and opportunities for improvement for the organisation as a whole.
2. Implement a culture of governable adaptability.
Implementing ‘proven best practice’ governance frameworks can be helpful in ensuring repeatable, auditable processes, but they can also contribute to inherent organisational inflexibility.
Resilient organisations continually review how, where and under which situations their existing governance structures are an inhibitor to its adaptability, and are adjust accordingly. Organisations that fail to recognise the tripwire of ‘best practice’ when faced with disruptive change may fail to thrive.
3. Incentives can be counterproductive.
Heavily incentivising managers and staff to achieve locally focused, single shot, short term targets, is one way of making sure that no effort is spent in understanding the suite of interacting threats to the business as a whole. If not well structured, incentives can be counterproductive in the face of rapid change.
4. Understand the risks associated with innovating.
Joseph Schumpeter (1883-1950), regarded as one of the most influential economists of the 20th Century, argued that economic change revolves around innovation, entrepreneurial activities, and market power. This led to the term ‘creative destruction’. He identified innovation as the critical dimension of economic change.
It is this innovation, in the absence of appropriate governance frameworks that can deliver adverse outcomes. Case in point being the near collapse of the financial world in the late 2000s (colloquially termed the GFC). The GFC had its origins in innovation, namely the unbridled innovation of complex, opaque financial transactions. The rest, as they say, is history.
5. Bringing IT departments in from the cold.
If the organisation’s IT department is seen primarily as a cost to the organisation that is to be minimised, this approach may lead to missed opportunities. Even if the organisation’s IT department may no longer make all the technology decisions within the business, they still have a crucial part to play.
When a competitor recognises (and exploits) the transformational capabilities in their existing (legacy) or new technologies, and are outstripping the marketplace, everyone else has to play catch-up, and some organisations may die. Value trumps cost in any investment, and enterprise IT is no different.
In many instances, the business case for shifting IT from being largely a cost centre that is subservient to the demand of the business to a high value, strategic enabler for the entire organisation should be clear. Put it another way, if technology is important for an organisation, then transforming their IT department to a high value, strategic enabler should be high on their change agenda.
The reality is that technology-fuelled innovation is a double edged sword, requiring cross-collaboration within the organisation itself.
On the one hand, technology-led innovation opens up a world of possibilities for perceptive, agile, adaptive and fast moving organisations for capitalising on new markets, opportunities and revenues. On the other hand, these changes can disrupt or destroy entire industries as well as ill‐prepared incumbent organisations.
Rob Livingstone (rob@rob-livingstone.com) is a mentor, consultant, and industry advisor. He is the author of <i>Direction through Disruption</i> and Navigating through the Cloud. He is a fellow of the University of Technology, Sydney’s Faculty of Engineering and IT, where he lectures to higher-degree students on leadership, strategy and innovation.
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