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August 30, 2016 / Strategy / Wise Talk

WiseTalk Summary on the Disruption Dilemma

On August 18, 2016, Sue Bethanis hosted economist, Joshua Gans, the Jeffrey Skoll Chair in Technical Innovation and Entrepreneurship at the Rotman School of Management, University of Toronto and author of The Disruption Dilemma. Gans discussed his new research on innovation theory and the range of actions that leaders can take to deal with disruption.

Favorite Quote:

The disruption dilemma is “do we go for gold now or do we settle for silver every year?”

Insights:

  • Why do companies that are at the top of their game seem to get into trouble with disruptive innovations? Successful firms have trouble deciding what path to pursue because at first, their customers reject innovation, but eventually they begin to embrace it and the new entrant becomes a real business threat. That creates a real dilemma for an established firm.
  • Sometimes something new comes along that in addition to being innovative, is put together in a new and completely different way. Blackberry is an excellent example of this supply side disruption. They just didn’t have the right organization to be able to do what Apple and Samsung were doing. Often, the incumbents are handicapped by the operation and structure that made them successful.
  • You need to pay attention to the warning signs: A) a new product comes along and your organization dismisses it without evaluation, and/or B) situations where different parts of an organization have no idea what other parts of the organization are doing.

Tips for managing supply-side innovation:

  1. Your customers don’t know everything: You need to be actively monitoring new technologies and keep track of what’s going to be the next thing. You need to be strategic and anticipate the needs of the future.
  2. Acquire new disruptive entrants: Most firms have dealt with innovation by buying the firms that bring the new innovation to market. You must not only acquire them, but you also need to absorb them and their way of thinking and doing. Developing procedures is one way to make these acquisitions successful.
  3. Have very focused teams on rapid innovation and improvement: There is a cost to this, as you might have a very short time at the top of the industry, but there is the potential to make a lot of money in the short-term.
  4. Choose the life of the firm: By sacrificing rapid innovation you can lag a bit behind. This does come with a cost as you won’t have as many sales and you won’t be the leader in your industry. But, doing so will make your organization more flexible by breaking up silos and making sure that people rotate across teams. This doesn’t guarantee that a company will survive the next big disruption, but it does increase the odds quite a bit.

What we found most interesting:

Do you want to be gold or silver? Historically, when you choose to be gold you are choosing to be there for a short period of time. When thinking about disruptive threats, it is worthwhile to bring different parts of your organization together to identify and decide how you will deal with them.

To learn about Joshua’s theory and research on disruptive change, and more interesting insights about companies that have fallen to disruptive innovation, listen to the recording here.

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August 1, 2016 / Strategy / Wise Talk

WiseTalk Summary on Transformation for the Digital Age

On July 20, 2016, Sue Bethanis hosted David Rogers, professor at Columbia Business School and the author of the recent book The Digital Transformation Playbook. David is a globally-recognized leader on digital business strategy. David talked with Sue about why traditional businesses need to rethink, adapt, and learn from todays’ digital disruptors and innovators.

Favorite Quote:
“The reason that digital technologies matter so much to businesses is because it matters to customers. Through technology, customers can discover, learn, interact, and influence each other. It’s changing the relationship businesses have with their customers.”

Insights:
Digital transformation is a question — How does a business that was started before the digital era need to adapt in order to grow, thrive, and reach its next stage of profitable growth?
According to Rogers, digital transformation really isn’t about technology, it’s about changing strategic thinking and organizations’ need to upgrade their thinking across these five domains of strategy:

  1. Customers – Businesses need to shift from thinking about their customers as targets (who they market to) to thinking about them as networks. We need to look at customers as active and dynamic participants and partners. Technology is changing the customer relationship with businesses and with each other. There is now a much more reciprocal dynamic relationship with customers and it is important to understand the ways that they (customers) are interacting with each other and making decisions. Businesses now have better insight into the customer’s very rapidly changing path to purchase.
  2. Competition – We are shifting from a world where traditional competition was very much a zero-sum game. We are now not only dealing with rivals within our industry, but also with competitors from outside our industry (for example, Uber and the auto industry). We are now in an environment where companies are dealing with “co-opetition”. The same company may be your fiercest rival and a critical business partner.
  3. Data – Traditionally, data was expensive to obtain and was primarily used in an organizational silo fashion to manage processes and forecasting. Basically, businesses used data to operate more efficiently and effectively. Now, data is everywhere. There is an incredible sea change in unstructured data which is commonly called “Big Data”. We are now seeing businesses that can bring this data together in an integrated fashion. Instead of just improving operating efficiency data can be used to create new value and to innovate and drive the business forward.
  4. Innovation – There is a big shift from the traditional model of innovation that is based on senior organizational leaders making tough decision and placing big bets. We are shifting to a model that is based upon a process David Rogers calls “rapid experimentation.” The role of leadership is very different in this model. Instead of trying to figure out the answer, leaders set the goal and the question of innovation and enable their organization to figure out how they can effectively learn as quickly and rapidly as possible. Digital technologies now enable continuous testing and experimentation so that business leaders don’t sink everything into one big bet that may or may not work.
  5. Value – The last domain of digital transformation is the value a business delivers to its customers. Industry definitions and borders are becoming much more fluid and evolving. As the environment changes, businesses need to shift from taking a static view of who they are. Every business should look at every change and new technology and ask itself, “How can this create a new opportunity for me to deliver value to my customers that I wasn’t able to deliver yesterday?” It is important to be thinking about how to be as relevant to your customer today and going forward as you’ve been in the past.

On Data Sharing:
Certain industries are more comfortable with sharing data and there are certainly key differences among age groups.

  • Brand Trust – Even when an individual is hesitant to share data, if there is a particular brand where they thought they had a trusted relationship with for more than six months they were more likely to share their data.
  • Creating Value – People are really influenced by the perception that there is value being exchanged. When they feel that by giving the data to your company they can see that it allows you to serve them better, they are much more open to the idea of sharing data.

On Learning to Experiment:
Experimentation is really just an iterative process of what does and doesn’t work. Thinking about innovation as a series of experiments is about organizing your innovation process around learning.
There are a couple of different types of experiments and as a manager it is important to understand the distinctions.

  • Convergent Experiments – You start with a specific question and you are converging on an answer (example: an A/B test). In the ideal situation, these experiments can actually be designed using a scientific method.
  • Divergent Experiments – There is not a single specific question like an A/B test. You are posing an unknown set of questions that require a different process design. This is where you might be putting a prototype in the hands of customers or discovering through an iterative process what may be most meaningful for the business. The process may actually generate new questions for each stage. The ultimate goal is to test as many assumptions as possible behind a general idea of an innovation.

What We Found Most Interesting:
Businesses must understand the importance of strategies to build platforms, not just products. In the digital era, the competition shift is being driven by the growth of platform business models – a business that creates value by facilitating direct interactions between different types of customers. So, instead of the business creating the value – the business is creating value by bringing together different parties that are each contributing and exchanging different kinds of value themselves.

To learn more about David Rogers and his thoughts on digital disruption, listen to the WiseTalk recording.

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July 29, 2016 / Articles We Like / Strategy

On “Embracing Change Means Disrupting Your Day”

Can positive change be achieved without disruption? Is your mindset about accepting change and seeing it as a wonderful opportunity or does the “newness” of change seem like a disruption to the comfortable and familiar that you’ve created at home and at work?

In this recent HBR article Embracing Change Means Disrupting Your Day, authors Kate Sweetman and Shane Cragun explore the idea of “growth mindset” and why it is needed to achieve success in today’s environment.

Are you embracing change in this tumultuous and global environment?

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June 30, 2016 / Articles We Like / Strategy

On “3 Stages of Successful Change Management”

Whether you are in a disruptive market environment or not, real change doesn’t happen without the support and buy-in from those you lead. As a leader you need to take the time to share your vision and prepare your culture for change.

In his most recent Forbes article, Mark Murphy, outlines his 3 Stages of Successful Change Management. It’s a quick read with some valuable and practical insights for getting the support you need to go through with a change effort.

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June 7, 2016 / Design Thinking / Creativity / Innovation / Wisetalk

WiseTalk Summary on Empathy, IT, and the Digital Economy

On May 24, 2016, Sue Bethanis hosted Jeff Sussna, Founder and Principal of Ingineering.IT on WiseTalk. Jeff specializes in driving quality improvements through practical innovation.  Jeff shared his ideas about using Design Thinking and DevOps to improve customer satisfaction and operational effectiveness.

Favorite Quote:

“Empathy does not mean wallowing in other people’s pain. All it means is the ability to see things from another person’s perspective. It’s really fairly simple and straightforward.”

Insights:

  • DevOps – In most IT organizations the people who develop software and the people who operate software are separate groups. Software as a service (SaaS) businesses need IT to deliver faster and continuously and this leads to boundaries between these two separate groups to break down. Sussna believes that DevOps is fundamentally about crossing silos and boundaries and getting people to work better by working together- shifting from an old complicated system into something more fluid and dynamic that improves both speed and quality as a result.
  • Design Thinking – After 250 years industrialism we have this very long tradition of how we deliver things and messages. Now we need to learn something new. Companies are losing control because customers are controlling the message and that is a very new thing. Sussna uses an abductive approach to solving problems. This approach is an alternative to analyzing your way to a solution. He shared that it is important to think beyond functionality and that all of the parts of IT and digital business are about delivering service and this service needs to be designed.
  • Resistance – With an iterative approach you start with a hypothesis by engaging a group and allowing them to learn; you are empowering people to adjust and in this process you create momentum. Sussna believes that getting people talking to each other is the simplest and most straight forward way to begin. It is important to create opportunities for them to solve problems together. When you get people together and you give them an opportunity to make things better together, that is an ideal way to overcome resistance.

What We Found Most Interesting:

Leading businesses are making the shift from the complex machine model to the complex adaptive system model. This new model is organized in small cross-function teams with autonomy and the ability to experiment, learn and move quickly. This model also gives us a mechanism for achieving resiliency. The problems we face are becoming more complex with systems and the model organization structures give us a much more powerful mechanism for doing that. They also help us to respond to failure in a flexible and elegant way. The potential is that instead of IT being a friction point it becomes an acceleration point.

To learn more about Jeff’s approach to digital service delivery, listen to the WiseTalk recording.

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May 31, 2016 / Articles We Like / Strategy

On “3 Stages of Successful Change Management”

Whether you are in a disruptive market environment or not, real change doesn’t happen without the support and buy-in from those you lead. As a leader you need to take the time to share your vision and prepare your culture for change.

In his most recent Forbes article, Mark Murphy, outlines his 3 Stages of Successful Change Management. It’s a quick read with some valuable and practical insights for getting the support you need to go through with a change effort.

MORE
May 7, 2016 / Strategy / Wisetalk

WiseTalk Summary on Leading Change – Are you a decider?

On April 21, 2016, Sue hosted Nick Tasler, CEO of Decision Pulse, a global management-consulting firm, and an internationally acclaimed author of three books including his latest #1 best-seller, Domino: The Simplest Way to Inspire Change. Nick revealed his surprisingly simple framework to align teams around change and achieve new goals quicker than ever before.

Favorite Quote:

“The essence of strategy is choosing what not to do.”

Insights:

  • When managers try to make a change the natural approach is to talk about the new things they are going to do but they don’t get rid of the 10 old priorities.  Team members are all on board and understand why the change is happening but they just went from 10 priorities to 20 priorities.  This is “change by addition”.  With “change by addition” people become unsure about what they should prioritize and everybody gets spread thin.
  • There is confusion between collaboration and consensus. Collaboration is a good thing but collaboration should not be used as an excuse for abdication. In the very well intentioned goal of being a collaborative team nobody can move forward until every single person has signed off.  You need to change your mindset.  What exactly is the point of a decision? What exactly does collaboration mean and what does it not mean?
  • An “Aha! moment” for many leaders is “I really do have the authority to make the decision!” Most leaders try to be inclusive and collaborative because that is what we say good leaders should do. It is up to the leader to make the decision when there is no natural alignment among team members. Under the guise of not being a micromanager, leaders don’t make a decision and that is just as problematic as being too authoritarian.
  • ADAPT is a useful “change by decision” framework. Anticipate – You have to notice the change before you can do anything about it. Decide – The latin root of decide is “to kill” or “to cut”. To decide is to know what to kill.  Align – The easy way to operationalize the decision is to come up with a 90-day sprint and a 90-day waitlist and ask your teams to do the same thing. What are the three things you are going to sprint on and three things you are going to hold off doing for 90 days?  Alignment is really about aligning waitlists. Permit – It is important for people to know that they will not be punished for not working on the things on the waitlist. Test – Whatever the decision, it is only a hypothesis.  The whole point of test is to let people know that when a new direction is announced,  it is possible that it might not work.  Testing is a reminder that this is a hypothesis until the reality proves differently.
  • We always hear about old lumbering organizations who are too short-sighted and get disrupted. Within a disrupter or a startup, the goal is often to be visionary. Disrupters risk getting too far ahead of the industry and too far ahead of what customers want. This farsightedness is hyperopia. It is the opposite of myopia.

Try it:

Host a session or a day-long strategic planning workshop called a “Decision Day”. The whole point of the day isn’t to come up with a plan or a list of priorities. The point is to arrive at a decision of what the team is going to do and what they are not going to do. The name Decision Day changes the mindset of participants to prime them for the purpose of the day.

What we found most interesting:

Leaders often go right into communication mode when they make a major decision.  The equivalent analogy to driving is turning on the hazards and getting everyone’s attention but nobody in the organization knows what’s going on.

A blinker is different. It signals a change and a specific direction. The thing that gets everyone’s attention is taking something away and not adding something new. The questions is – what do you take away? It has to be something that is important and will get people’s attention.

To learn more about Nick’s research, listen to the WiseTalk recording.

 

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April 28, 2016 / Strategy

On “Go Disrupt Yourself”

There has never been a more interesting, exciting time to work in technology-fueled companies. Technology is advancing at an exponential pace, and it’s changing the way the world does business. But it’s extremely hard for companies to disrupt their own market while moving full speed ahead.

Daniel Gross, author of the recent Strategy + Business article, Go Disrupt Yourself, reminds us that with every successful disruption story, there are always more that failed.

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March 30, 2016 / Strategy

On “Does Your Business Model Look to the Future or Just Defend the Present?”

Today’s best technology-driven companies (think Netflix or Uber) are using transitional business platforms to learn and react quickly, even if it can potentially threaten the company’s traditional core.

In the Harvard Business Review article, Does Your Business Model Look to the Future or Just Defend the Present?, Robert C. Wolcott provides four characteristics distinguishing transitional business platforms and how they allow a company  to ‘get in the game’ for driving change in the future.

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February 2, 2016 / HR / Talent Management / Wisetalk

WiseTalk Summary on Managing for Disruption

On January 27, 2016, Sue hosted Ragini Parmar, VP of Talent Operations, at Credit Karma. Credit Karma has set out to disrupt consumer finance and as a disruptive business experiencing hyper growth, they consider their culture fundamental to their success. Credit Karma’s culture is not built around free lunches, but common principles that act as their compass, and is a foundation of how they want people to work together.

Scaling their culture is as important to Credit Karma as scaling their business, and to that end, Ragini talked about their collaborative hiring process. This innovative process helps them avoid bad hiring choices that could change the internal culture instantaneously. Ragini shared why their culture is key to their success, how they structure the interview and debrief process, and how they involve employees.

Favorite Quote:
“You have to trust that you have smart people at the table who are invested and want to make a difference. If you don’t trust that, then there’s probably something broken there.”

Insights:

  • Credit Karma’s disruption as a company is focused on recreating the finance industry around people. The company wants to put the credit industry into the hands of the people by giving them free and comprehensive access to their financial data and empowering them to manage personal finances and make financial decisions. Internally, they mirror this disruptive philosophy by placing all decisions around corporate culture in the hands of employees.
  • When asked how a culture built by employee-driven decisions is a disruptor in their industry, Ragini spoke about the importance of trusting the employees. Because Credit Karma is growing so fast, if hiring or retention decisions were left to top management , they might be disconnected from employees because there are so many new voices at the table. Ragini commented on the richness of qualitative data that employees can offer, which can be overlooked if decisions are made solely based on quantitative data. Because culture is an abstract concept, it can be hard to define culture fit, and finding that trust in employees can be hard. But, Ragini said at some point they had to trust their hiring practice, that they were bringing on the right people who have an innate responsibility to want to take care of the culture.
  • One way Credit Karma involves employees in the culture decisions is through a collaborative hiring process. The company currently has more than 100 people on their interview team; any of those people can get pulled to interview at different stages of the process, depending on their experience and the position. Each interviewer has a different responsibility and at the end of the interview process, a discussion brings together all the perspectives. They decided in the beginning that they would always be collaborative in their hiring decisions. Even if a hiring manager says they want someone on the team but the team members who were part of the interview process say no, they will not override this. The benefit is employees select who they want to work with, leading to an investment in that person’s growth with the company and better retention.

What we found most interesting:
When Sue asked how they balance finding people that fit the culture with diversity, Ragini said, “You have to trust the values you have (as a company). Our cultural values are our guiding compass. They tell us how we’re supposed to do the work, how to collaborate and how to get the work done in an efficient way, and keep us all moving in same direction. If you really believe and embody those values, then you’re looking for people who naturally would be able to step into Credit Karma and embody those values as well. They could come from all different types of experiences and walks of life. It’s really about looking at that.”

For more insights on Ragini’s chat, listen to the WiseTalk recording.

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