Marrying Incumbents and Startups (Part 1)

This article is based on a keynote speech, “Disruptive Leadership,” at the World Forum Disrupt, Strategy & Innovation Conference in New York City. The pace of change we are experiencing today is as slow as it is going to get for the rest of our lives. Everyone talks about disruption: digitalization, automation, virtual reality, artificial intelligence, big data. The corporate world is polarized at the moment. Companies today sometimes feel that they must choose between flexibility, on the one hand, and the stability, on the other. There is a lot of talk about agility as a way to bridge the gap between the startups and the industry incumbents. According to McKinsey, “Truly agile organizations learn to be both stable (resilient, reliable and efficient) and dynamic (fast, nimble and adaptive).” Disruptive leaders are the ones who can stand in the middle – the ones able to speak both the language of the legacy world and the language of the startup world. They stand in the sweet spot between rapid change and rigid stability. In fact, disruptive leadership is the single most important ingredient of agile organizations. Disruptive leadership is not reserved for tech and innovation departments only. It is about changing the organization's DNA, instead. Through my work over the past decade, I have been observing highly effective leaders, and, as a result, I came up with five main pillars of disruptive leadership. I will cover three here and follow up a second article that has the final two, plus a conclusion. 1. Past — Future Startup leaders ask: How could we do it tomorrow? Legacy leaders ask: How have we done it so far? Disruptive leaders ask: How might we do it today so that we bridge the gap between yesterday and tomorrow? Disruptive leaders are able to keep one eye on the present and the other on the future. They know that, to successfully lead a disruption, they need to keep the significant part of their existing operations stable. They also understand, however, that experimentation is crucial to be future-ready. Balancing these two conflicting goals is not easy. There are not a lot of leaders who can do this. It’s a missing skill in the market. See also: InsurTech Forces Industry to Rethink   Some traditional companies try to bridge the skills gap by hiring leaders from the startup world, which often fails. Why? Because they often don’t pay the necessary respect to the existing culture and the existing business model. They are great at innovation, but they are often not adequately skilled to balance stability with change. Reflect: How much time are you carving out in your day to think about where the future is headed? 2. Limited — Unlimited Limited vs. Unlimited thinking is closely related to the previous point. Our past and our present are mere indications of what is possible. Truly unlimited potential lies in the future. Disruptive leaders create an appealing vision by thinking in an unlimited manner and are then able to tie it back to reality and find ways to make it happen. Startup leaders focus on closing the so-called opportunity gap – the gap between the way things are and the way they could be. Legacy leaders focus on closing the performance gap – the gap between the way things are and the way they should be. Disruptive leaders focus on both. They aim to make improvements to the existing product or service (performance gap), while at the same time challenging whether that product or service is relevant any more (opportunity gap). Reflect: What can you do to move from limited thinking to unlimited thinking both in relation to your company and for your career in general? 3.  Internal — External Legacy leaders have an internal focus: How have we done it so far, and what is it that we are strong at, that we want to offer to our clients in the future? Startup leaders are extremely client-focused, on the other hand; they are great at listening and designing a business that meets their clients’ needs. As usual, a disruptive leader is the one who can do both – honor the legacy and the strengths of the company, while keeping another eye on the external world: clients, competitors, new entrants, emerging risks. See also: Industry Demands an Open Ecosystem   Disruptive leaders keep a close eye on all the players up and down the value chain because they understand that clients of today may be competitors of tomorrow, and vice versa. Value chain disruption is becoming more prominent, so keeping an eye out on the external developments is critical. Reflect: How much of your time are you carving out to observe the market and understand the developments up and down your value chain?