The challenges for leaders and organisations going forward is to imagine how the confluence of the forces of disruption and Covid-19 could disrupt their business and then chart their blueprint for renewal and transformation, says Paddy Padmanabhan
Disruptions to the business landscape are routine. They are a natural consequence of the forces of creative destruction. What is different about the business landscape today is that the winds of disturbance and change have turned into wildfires thanks to the forces of digital, social media, platforms, ecosystems and technological developments in AI, meta-language, Internet of Things, robotics, and blockchain.
Covid-19 has further inflamed this – it has shown that all businesses big or small, legacy or start-up are not immune to this firestorm of disruption.
All businesses sooner or later need to reconstruct their future. Myself and my co-authors suggest in our book, The Phoenix Encounter Method: Lead Like Your Business is on Fire! that the urgency for such an undertaking has never been greater.
Old ways of thinking
Yet, our field research shows that 80% of leaders of organisations find dealing with disruption – and envisioning its future – to be very difficult because they are stuck in the old ways of thinking and action.
Our research has developed a fresh method of leadership thinking – the Phoenix Encounter – that empowers leaders and enables them to develop the set of options for innovation and business model transformation. It bridges the gap between perceiving threats and opportunities and developing a blueprint for tackling them.
The method is built on a simple yet massively transformative idea: get leaders to think carefully about how they would marshal the forces of firestorm disruption to destroy their current organisation, then generate the wider set of options to rebuild their future-ready organisation and its business model. The method is challenging, but it allows leaders is to discover that they can be absolutely their best enemy and that it can be a good thing.
In essence, our work formalises the intuitions expressed by many legendary business leaders.
Shigetaka Komori, CEO of Fujifilm, who took this thinking to all-time highs in 2020 unlike its perennial rival Kodak (which filed for bankruptcy), observed: ‘If the goal was simple survival, many things could be done…but I wanted Fujifilm to be a leading player in the 21st century. In our present situation, we are Toyota if cars were to disappear. We have no choice but to confront it, and confront it head on.’
Amazon CEO Jeff Bezos who directed Steve Kessel (former Head of Amazon’s traditional media business – books, music, DVDs) also famously told him: ‘Your new job is to kill your own business. I want you to proceed as if your goal is to put everyone selling physical books out of a job’.
A confluence of crises
The need for this kind of leadership thinking has become even starker given the Covid-19 pandemic. The world has experienced all sorts of crises before – be they a natural disasters, economic crises or manmade disasters. In a separate research effort, we have examined the implications of certain types of crises on consumers and business.
The key findings in this area have been that a crisis has a significant impact on consumer behaviours and firm performance. But what we also seen is that in most instances the crisis passes, and the recovery post-crisis allows consumers and firms to get back to an equilibrium that looks not very different from the pre-crisis world.
Covid-19 is different from anything that the world has experience before. It started off as a health crisis but has then morphed into a confluence of crises ranging from demand crisis, supply crisis, humanitarian crisis, currency crisis, banking crisis, and sovereign debt crisis.
Looking ahead into 2021, and trying to think through the implications of this confluence, is not going to easy especially given the challenges surrounding the vaccine rollout. But I would like to focus on a couple of things that I think are becoming somewhat clear. The notion that the post-Covid-19 world will in time resemble the pre-Covid world seems far-fetched. There have been some fundamental changes in consumer and firm behaviours that I suspect are going to be long lasting.
Consumers have changed their behaviours in a fundamental manner thanks to Covid-19. They no longer have very strong preferences for what they want to buy and consume, they now have equally strong, if not even stronger preferences for how they want to buy and experience the products and services they want to purchase. The evidence is clear in the growth of e-commerce, m-commerce and omni-channel as well as the impact on products and services that involve communal proximity (e.g, food, travel, entertainment).
Firms and employees have come to recognise that work no longer refers to a location, but instead it focuses on an activity that can be location-agnostic.
The initial concerns about the efficacy and productivity of work-from-home (WFH) is being replaced increasingly by the realisation that WFH allows some very interesting re-imaginations about the nature of work and the very activities that define it. Witness the number of firms across the world that have encouraged their employees to choose how they want to work in the new year and boom in consumption of collaborative online workplace tools like Zoom, Slack and Teams to name a few.
The challenges for leaders and organisations going forward is to imagine how the confluence of the forces of disruption and Covid-19 could disrupt their business and then chart their blueprint for renewal and transformation.
Paddy Padmanabhan, co-author of the book The Phoenix Encounter Method: Lead Like Your Business Is On Fire!
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