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Top Tips: An Appetite for Disruption

November 19th, 2015

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By Gary Ashton001_w240

If you want to develop game-changing business ideas, you need the right sort of people to develop and implement them. But having the right ‘disruptive talent’ is only half the story. If you don’t provide them with the right environment in which to act, their talent and ideas can very easily be wasted.

Making the best of disruptive talent requires you to answer two questions: what degree of protection and support are you willing to give the disruptive talent and what degree of protection are you willing to give the core business that most likely will be impacted by the disruption?

Let us consider five ways in which organisations can create this ‘opportunity’:

1. Time to Think

This is where you give individuals and project teams time to think through and investigate ideas that could potentially take the business beyond the status quo. Vodafone R&D used to categorize their different types of development projects, with most being specified and funded by internal customers, but with others being supported by R&D itself to explore and think differently and not expect anything specific to materialize (internally nicknamed ‘whizz-bang’ ideas).

2. Informal Permission to Act

A firm’s leadership can also create the right environment in which individuals and teams are able to break some rules in order to create something new. This is established at a more informal level by the tacit behaviours of the leadership team in what they support, condone and resist. When Stanley Kalms was CEO of Dixons Stores Group, he would personally promote the idea that every Area Manager should have 10 mini-trials or experiments underway at any one time – to try new ideas out and to quickly pass on anything that worked.

But as this approach is more informal, it can mean that the resolve of leaders is tested when the pressure to urgently deliver profit starts to override the imperative for developing future opportunities. When the pressure is on, the call is with the leadership on just how much speculative investment it is willing to risk, and for how long.

3. Formal Freedom to Act – Governance

To make it harder for others in the organisation to challenge and prevent the disruptive ideas from succeeding, a company can establish ‘rules’ within its existing structure which define set resources (human and financial), along with goals, milestones and support within which disruptive projects can thrive.

4. License to Act

Once a disruptive project gains some traction, the business may then ‘up a gear’ and switch from supporting these endeavours as projects within a governance framework, to creating a separate organisational entity, with its own resources and separate management processes, to allow it to grow into something more substantial – before possibly grafting it onto the existing business. For example, Vodafone got its 3G business up and running by creating a separate business away from its core 2G business in order to give it the freedom needed to create what was then a future digital world.

5. Space to Act

All of the above can be seen as being more incremental in approach and giving disruption a marginally longer leash. Yet occasionally, the ideas coming forth may be seen as just too radical for the core business to risk. So a different approach is needed. One such way is when a company creates an internal market of resources and ideas, within which people are given the freedom to form, develop, grow, merge, reduce and kill off ideas.

Japanese entrepreneur Dr Kazuo Inamori has advocated a concept of “Amoeba Management”, whereby all members of each amoeba unit makes its own plans and pool their wisdom and effort to achieve their targets. In this way, each employee takes an active role in the running of its business, and allows the units to adapt more quickly to any complex and/or changing external circumstances.

Then there are other times when a company realises that inventing everything themselves is no longer an option. In this case, those making decisions on funding options can opt to create an entity outside the formal organisational boundaries. This is where external funding, or setting up Joint Ventures can be a suitable approach.

An Appetite for Disruption

These five different approaches provide varying degrees of opportunity in which disruptive talent can flourish. Choosing the right model for your organisation is a reflection of your appetite for disruption and your assessment of how much disruption the business can cope with at any particular time.

To do this, consider the following about your business:

  • How ambitious are you to grow alternative futures for the business?
  • How developed is the thinking in your business of potentially disruptive ideas?
  • Are you clear about the potential risks – of not developing disruptive possibilities; and of any disruption to your core business?
  • Are you clear about the amount of time, effort and financial investment you are prepared to accept, and for how long?

And are you also clear about your disruptive talent:

  • What type of disruptive talent you need to deliver your future opportunities?
  • What type of disruptive talent you actually have in your business?
  • What level of disruption are you prepared to take?

By investing in disruptive talent, you are in effect trading off existing actual profit for future potential profit, and betting on how best to give disruption the opportunity to succeed.   So you need to ensure you have identified the right talent for the job, established the right boundaries around which your disruptive talent can develop business opportunities, and that you are comfortable with your company’s organisational resilience to sustain the disruption. And crucially, you need a top team with the right level of ambition and imagination to provide the opportunity for disruptive talent to flourish.

 

Gary AshtonGary Ashton is a partner at Organisation Effectiveness Cambridge (OE Cam LLP), a boutique firm of consultants who help maximise the effectiveness of individuals, teams and organisations. He has consulted in the re-design and implementation of organisation structures and management processes, post-merger integration, improvement of joint venture organisation capability, and Board and senior management team assessment and development. www.oecam.com

 

 

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