“Winter Is Coming!”

If you’re a fan of HBO’s Game of Thrones series, then you’ll recognize the ominous motto of House Stark, “winter is coming.” It is used throughout the series to remind the skeptical leaders of The Seven Kingdoms of Westeros that their world is about to radically change.

While we business leaders don’t have to fear the dead army of white walkers invading from the north, there is a real cause for concern. I’d like to sound a similar alarm to all those skeptical leaders who still think that the disruption we are experiencing will somehow pass them by. Winter is coming my friends and business disruption is a reality that you can no longer avoid.

"It’s not the smartest or strongest that ultimately succeed, but those that are most resilient and determined"

What Is Business Disruption?

Most leaders acknowledge that our world is changing. The debate seems to be about the pace and magnitude of this continuous change. Business disruption is simply the accelerated and disruptive effect of innovation and change in technology, process, business models, customer preferences, etc.

Business disruption is not unique to our time. It has been a continuous thread throughout our history. Only, the pace has been slow and manageable by human standards. A brief history of the earlier disrupters is outlined in an article by Klaus Schwab, Founder and Executive Chairman of the World Economic Forum, titled “The Fourth Industrial Revolution: what it means and how to respond”. In this article Klaus states, the first revolution used water and steam power to mechanize production, the second used electric power to create mass production, while the third used electronics and information technology to automate production. While these challenged people and organizations to adapt, it will be nothing like the magnitude of the fourth revolution. The difference is the velocity, scope, and systems impact will test organizations like never before. As Klaus notes, “the speed of current breakthroughs has no historical precedent. When compared with previous industrial revolutions, the fourth is evolving at an exponential rather than a linear pace. Moreover, it is disrupting almost every industry in every country. And the breadth and depth of these changes herald the transformation of entire systems of production, management, and governance.”

A brief study of history shows many examples of the disrupters and the disrupted. Examples of fairly recent disrupters include Apple, Amazon, Uber, Tesla, Netflix, and Facebook. In contrast, think of those companies that have failed to adapt such as Borders, Kodak, Blockbuster, and Myspace.

Why Companies Fail to Evolve

So why is it that some companies fail to respond to disruption? For me, the answer is fairly simple, and it’s based on how leaders view the world. I have seen all too frequently when leaders fail to understand the power of disruption and its impact on their business. On the other hand, I’ve also seen leaders that followed anything new and shiny down the rabbit hole only to wind up losing as well.

Unfortunately, there isn’t an algorithm or simple process one can follow. Instead, leaders need to start by acknowledging that the good old days are far behind us and we are now leading our business through a prolonged period of accelerated change and growth.

There are companies where adaptability and agility are hardwired into their DNA. Most other companies will rely on some catalyst or crisis to force them to reprogram their DNA. The good news is that there are several examples of companies that have proven if you take the right steps, and with a little bit of luck, you can thrive in this new era.

Crisis or Opportunity?

Napoleon Hill once said that every crisis carries with it the seed of an equal or greater opportunity. It’s important to note that there are several companies that have found the seeds of innovation and reinvention in the midst of disruption.

Netflix serves as an excellent example of opportunity over crisis. Seeing real disruptive forces moving away from video and DVD to streaming, Netflix decided to disrupt its own business model by moving away from DVDs to streaming media. Despite their success in the streaming business, they continue to innovate and grow by evolving into content production. By the way, Blockbuster turned down the offer to acquire Netflix for $50 million in 2000. Today, Netflix is worth more than $60 billion.

Leadership Challenge

As Netflix shows, there is hope for companies that are willing to be smart and bold. So, what can leaders do to help their companies better prepare for the opportunities and avoid crisis. I’d like to offer the following points for consideration:

1) Change Your Thinking: As leaders, you can help change the way your organization is thinking about the new world. Though we can’t control the weather, we can surely prepare for it better. With the sponsorship of your CEO, challenge your organizations to stop being passive and start thinking differently. I highly recommend that leadership competencies and capabilities in the areas of change, innovation, and agility be added.

2) Change Your Behavior: Put your money where your mouth is. Begin recognizing and rewarding leaders that display the kind of leadership agility needed to help move your organization forward. Open up lines of communication to help gain greater insight from your employees, vendors, and customers.

3) Make The Structural Changes: Create an innovation team purely tasked with the “structured ideation” of how to disrupt your business. They should be looking for new technologies, partners, acquisition targets, and any other information that could help your leadership gain insight into the changing landscape. There are many examples of large cap companies creating their own venture capital funds for innovation.

4) Timing: Lastly, strategically decide where you want to be on the adoption curve. Timing is critical. Don’t make the novice mistake of thinking the innovators or first mover wins. In most cases, it’s the early adapter that wins.

Again, while there isn’t any foolproof way to help your companies adapt to business disruption, as Human Resources leaders, you can help shape the future of your company by challenging leadership to think, behave, and work differently. Though the road ahead may be frightening and foggy, don’t lose heart. Allow me to leave you with some words of wisdom from my wise father who taught me that it’s not the smartest or strongest that ultimately succeed, but those that are most resilient and determined.