In the past, your business might have survived without a clear vision. Today, that’s not an option. 53% of companies – both startups and corporates – are facing disruption.
After surveying 120 C-Suite leaders from major corporates and start-ups across the globe, and interviewing 40 more in depth, one matter is clear: leaders and organisations without a north star won’t last the night.
It’s hard to know how to find the answers if you don’t know the questions. So these five questions drag the heart of your organisation into the light, revealing whether you will survive the next market shift, or whether you need to realign fast.
Does your purpose hold up?
For too many leaders, a noble cause is a nice-to-have. Their approach to ambition is mild, and their vision of the future sounds more like shareholder-appeasement than an inspiring call to arms.
As Deborah Pellen, Global Director of Innovation at Bacardi, told us, “Leaders can lack grit; the drive to persevere because they believe in something.”
When organisations lack purpose, they tend to hold fast to their tried-and-tested products and services, and they may refuse to lift anchor. When the market tides move, what was once the flagship of a promising start-up becomes beached like a whale.
Alternatively, disrupted organisations might become easily swayed by changing trends, looking to copy a winning formula rather than invent their own. Their innovation labs may be whirring away, but the scattershot objective of “find the next successful product” – combined with a pressure to succeed fast – leads to random, chaotic and redundant invention.
Success is too broad an ambition. And a product or service is too narrow. Neither should become a hill to die on. In order to fail fast, learn and thrive in a market that is constantly at risk of disruption, you need a real purpose. One that actually matters to the world.
“Purpose versus profit is a false dichotomy,” says Gib Bulloch, former Executive Director of Accenture. “Businesses need to deliver a triple bottom line impact and find broader purpose within societal aims.”
How bright is your commitment to innovation?
Alex Long, MD of McLaren Automotive, paints a familiar picture of the carrot-and-stick pressures that wreak havoc on organisations who lack purpose:
“Fears of poor stock market reaction to experimentation, combined with bonuses based on current year performance drive short-term decision making.”
On the other hand, he adds, “Innovation requires long-term commitment.”
Paul De Savary, who founded Home from Home Care after seeing his own daughter suffering, exemplifies this disruptive mindset. “We don’t go to work every day,” he says. “We go to war.”
Disruptive leaders are dangerous to the disrupted. These leaders need to solve a problem and they won’t just throw surplus resources at it. They’ll hurl themselves and their reputation, too.
All-in leaders like this set big, often seemingly impossible goals for themselves. They emanate authentic energy and determination, and everyone else in their organisation can’t help but be inspired to achieve the impossible with them.
Right now, leaders of disrupted organisations might feel safe in their ships of predictable profits. But they’ll soon be blasted out of the water by businesses that are making waves.
What’s the incentive?
Few leaders have anything at stake. Their bonuses, promotions and stock market valuations are dependent on delivering on short-term goals. As Joost Korver, the Former CEO of Primagas, says, “It is difficult to get execs to react when they are still hitting the numbers.”
Such short term thinking is bound to blow up.
In organisations with an effective response to disruption, 56% said their leaders were incentivised to take risks and innovate, compared to just 10% in organisations that were ineffective.
The implication is clear: short-term success no longer aligns with the path to long-term success. If you care about tomorrow, you need to overhaul your recognition and reward system.
What’s your iterative strategy?
For many, innovation is a side project, a footnote to an organisation’s performance.
Because of this, their innovation projects lack defined outcomes, objectives and budgets. They are underfunded or overfunded with little rhyme or reason. Some are killed before they have a chance to prove themselves, others are kept alive even though everyone has lost all enthusiasm for the idea.
Disruptors do things differently. They’re not playing with slot machines, they’re testing assumptions, or building hypotheses and antitheses that will evolve as they experiment.
Instead of working to build an AirB&B-killer or the next Uber, they’re in deep with their consumers, learning their problems so they can begin proposing the beginnings of solutions.
They go all in with metrics, gathering feedback and constantly monitoring progress. No one has any illusions about the kind of bets they’re making. Everyone is aware of the risks, the rocks and the reason as they chart a path towards their north star.
Is your organisation aligned?
Netflix invests in shared purpose over compliance because it works. Purpose aligns an organisation in a way that mere direction cannot.
It also unleashes the power of your people. At the height of the pandemic, DHL was suddenly faced with overwhelming demand. From vital medical supplies to food, huge shipments were needed urgently.
For DHL, decisions that would usually take days or weeks needed to happen yesterday. So instead of rewriting formal processes, they gave their people a simple mandate: “Do the right thing.”
As a result, every employee’s creativity and motivation was unlocked to fulfil the task before them.
So, will you survive?
T-minus was forged in the fires of startups and world-leading companies and, after 20 years of leadership, we know that becoming disruptive is not optional.
If you’re a corporation, it’s not enough to be established. If you’re a start-up, it’s not enough to be new. Everyone needs to ask themselves one more question:
Does your organisation have what it takes to survive the next fundamental change in the market?
If your ambition is clear and aligned, if your north star is still in view, the chances are you won’t have to survive it. You’ll be the one that causes it.
In this changing world, the only constant is disruption. To be ready for it, download our Disruptive Leadership Report, a playbook for leaders of the fourth industrial revolution.