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Month: August 2018

9 Traits of Emerging Disruptors

usiness leaders are understandably concerned about disruption. Business as usual is a dangerous proposition in an age when entire industries can be upended by a disruptor armed with cloud-based computing power, lots of data, and effective ways of leveraging that data.

The typical response to the threat of disruption is digital transformation. However, digital transformation tends to be approached as an if/then statement. Specifically, if we embark on a digital transformation journey, then we’ll be able to compete effectively in the future.

“What they’re not recognizing is you have failed in your business,” said Jay Goldman, co-author of New York Times bestseller THE DECODED COMPANY: Know Your Talent Better Than You Know Your Customers and co-founder and managing director of digital workplace solution provider Sensei Labs, “You’re not being rewarded for doing something right,”

The quantum shifts that disruptions represent don’t happen overnight. A disruptor, like most startups, has an idea it hopes will change the world. It intends to challenge the status quo that has been created by an established order of market leaders with formidable market shares and deep pockets. However, the market leaders don’t serve everyone by design because not all business relationships are equally attractive or profitable, so they tend to focus on the most profitable segments and de-emphasize or ignore the less-profitable segments. Disruptors tend to take advantage of those opportunities, such as by serving niche markets or less-affluent customers.

The incumbents tend to ignore such startups because the new contender is relatively small, lacks resources and tends to have far less brand recognition. Moreover, the new contender has decided to address a market segment the market leaders have consciously decided not to serve. Then, when the new contender succeeds in those markets, it has to expand into other segments to continue growing and improving profitability. Ultimately, when the new contender starts to gain market share in the coveted market segments, the incumbents react, albeit later than they should have. As more market share is lost, the incumbents try to copy what the emerging leader is doing, which may not work well, if at all.

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“If you say in the next six months we’re going to execute this transformation project and at the end of that we’ll emerge from this cocoon a new butterfly with everything we need to remain competitive from that point forward, you missed the point,” said Goldman. “There isn’t a set transformation that will keep you forever in a competitive state, ready to respond to the business environment. The only way to do that is to transform the fundamental parts of the organization so you are in a constant state of evolution and disruption.”

Achieving that state requires changing the company’s culture, leadership structure and tools.

By comparison, disruptors don’t have to transform because they’re new and have the luxury of creating a culture, leadership structure and tool set. Following are a few other things that separate the disruptors from the disrupted.

#1:  They’re unified

Disruptors are on a mission to affect major economic, business, industry, or societal changes. They have a vision and purpose that are woven into everything they do and the mindsets of their employees.

Incumbents often form a separate innovation group or hire a mover-and-shaker with a C-title, such as a Chief Data Officer (CDO) to lead a separate group. This powerful and brilliant executive, who typically comes from a high-profile tech company or a company in another industry, is given a massive budget, an enviable working environment and the freedom to hire the people necessary for success. However, there is a fundamental flaw in the approach.

“They set the group up [as a separate entity] for a whole bunch of reasons: 1) We know our culture will kill it if we put it inside the business and, 2) The kind of people we need working in that division are never going to work for our company if we try to hire them outright,” said bestselling author and Sensei Labs co-founder and managing director Jay Goldman.

#2:  They have an authentic culture

Every company has a culture by design or by default. Since disruptors lack a decades-plus legacy, they don’t have to transform from something traditional to something modern.

They recognize the importance of culture and the need for everyone in the company to not only buy into the culture but to advocate, promote, and advance it. Having a unified culture enables the realization of a unified vision and the execution of a unified mission.

In contrast, incumbents try to counter the effects of disruptors by attempting to mimic them. In doing so, they miss a very important point, which is what works at Google works because Google is Google. Every company is unique in terms of its people, processes, tools and value proposition.

“The one value that you see coming out of [the tours given by innovative companies] is to come back terrified and convinced of the need to make change,” said Goldman. “[Usually, the CDO and C-suite executives are] going to come back with good notes of how they might do that, but they won’t recognize the depth of the threats they’re facing.”

#3:  They reflect modern values

Startups have the benefit of being born into whatever “modern” era exists at their founding date. Today’s startups reflect the values of the younger generations including Millennials and Generation Z (Gen Z), both of which are highly tech-savvy.

“It’s not just you have a different set of values and priorities,” said Goldman. “You have an intimate level of familiarity with technology that the leaders don’t have because they weren’t born into that age.”

Goldman once met with a group of C-suite executives who couldn’t understand why their successful life sciences company had trouble attracting and retaining younger employees. To better understand the issue, they asked employees for suggestions, many of which they considered ridiculous. For example, they didn’t understand why younger employees would want to wear jeans instead of suits. How would that improve work effectiveness?

“The reality is, that the executives who made a company successful are disconnected from what people want in the workforce today,” said Goldman. “People will take a pay cut to work at a business where they’re deeply aligned with the values of the company and they believe they’re doing good for the world. In my generation and the generation before me, you looked for a well-paying job, and company values were on a poster with a soaring Eagle on it in the break room.”

#4:  They have the latest tools

Cloud-based technologies enable startups to do what was cost-prohibitive in the past. Now, businesses of all sizes have affordable access to massive computer power, storage, data analytics, and AI. More importantly, they can experiment and iterate in low-risk, low-cost environments and scale as necessary to meet the growing requirements of their expanding customer bases.

In contrast, the life sciences company C-suite executives didn’t understand why employees didn’t want to use Lotus Notes!

#5:  Their leaders are enablers

Disruptors attract, hire, and cultivate highly-effective people. Changing the status quo of an industry or society at large not only requires bright, driven people, it requires leaders who are not threatened by other bright, driven people.

In a command-and-control hierarchical structure, power and great ideas may be reserved for the chosen few.

“Traditional roles are managers who are there to make sure things happen on time and on budget, and that you hire the right people to do the job,” said Goldman. “When it comes to topics like transformation, innovation, and disruption, you should be a gardener. Your job as a gardener is to make sure your plants get enough sunlight, water, and nutrients. You can weed out the weeds that would have prevented them from growing and you can protect the garden from being raided by animals.”

Leaders should be enablers instead of managers. Enablers want great people to do great work, so they create an environment that includes the freedom to do that. The traditional management mentality can be stifling by comparison when people can only rise to whatever level of competence or incompetence the manager himself or herself possesses.

#6:  Change drives them

Change is what drives innovation and disruption. It’s about affecting change and also having the agility to change when an experiment or even the entire business model fails.

Goldman said even though incumbents may be out interviewing customers and iterating products rapidly in response, they’re not doing the same internally. Heads of innovation tend to be brilliant at product innovation, but they’re not necessarily change agents,

“The actual MVP customers you should talk to are the P&L holders that will have to sponsor [the innovation lab],” said Goldman. “Don’t present something that’s so radical and transformative [the P&L holders] look at their products and realize they’ll probably lose their job.”

#7:  Their value proposition trumps products

Disruptive companies tend to view the world differently than their incumbent counterparts. The disruptive companies think in terms of value; incumbents tend to have product and solution portfolios that are presented and regarded as such. They articulate use cases, but they’re missing their company’s fundamental value proposition.

For example, when a fertilizer company was going through a transformation, it “did all the right things,” according to Goldman. It changed the business, empowered the leaders and trained all employees to think creatively using tools and modern problem-solving approaches. During the process, the company’s identity shifted from being a fertilizer company to one that improves crop yields. While the distinction may seem slight, the new definition enables the company to imagine and provide other products and services that improve crop yields. It’s now using satellite data to tell farmers about crop issues they’re not aware of so they can remediate the issues with unprecedented precision (arguably using the company’s fertilizer products). The satellite data is also the basis for a new subscription-based service that guarantees a certain level of crop yield improvement,

#8:  They create best practices

Disruptive companies tend to view the world differently than their incumbent counterparts. The disruptive companies think in terms of value; incumbents tend to have product and solution portfolios that are presented and regarded as such. They articulate use cases, but they’re missing their company’s fundamental value proposition.

For example, when a fertilizer company was going through a transformation, it “did all the right things,” according to Goldman. It changed the business, empowered the leaders and trained all employees to think creatively using tools and modern problem-solving approaches. During the process, the company’s identity shifted from being a fertilizer company to one that improves crop yields. While the distinction may seem slight, the new definition enables the company to imagine and provide other products and services that improve crop yields. It’s now using satellite data to tell farmers about crop issues they’re not aware of so they can remediate the issues with unprecedented precision (arguably using the company’s fertilizer products). The satellite data is also the basis for a new subscription-based service that guarantees a certain level of crop yield improvement,

#9:  They have the right talent

Disruptors couldn’t accomplish what they do if they didn’t have “the right” teams in place. Like any other organization, not everyone makes the cut as the company evolves or chooses to stay as circumstances change. However, they’re keenly aware of their goals and what must be done to achieve them, part of which is ensuring the right people are in the right jobs.

“Employee engagement is gaining momentum. How you keep people engaged has got to be front and center to your strategy,” said Randy Mysliviec, Managing Director of the Resource Management Institute. “Not only does talent management need to be more fluid, you can’t expect people to stay at your company for 20 years regardless of how you treat them.”

In the last two years, enterprise IT resource management has shifted from a simple supply and demand model to a more forward-looking strategic model that considers where the company wants to be in six months. So, when it comes to recruitment, hiring managers are now con

How to Prepare for the Machine-Aided Future

Intelligent automation is going to impact companies and individuals in profound ways, some of which are not yet foreseeable. Unlike traditional automation, which lacks an AI element, intelligent automation will automate more kinds of tasks in an organization, at all levels within an organization.

As history has shown, rote, repetitive tasks are ripe for automation. Machines can do them faster and more accurately than humans 24/7/365 without getting bored, distracted or fatigued.

When AI and automation are combined for intelligent automation, the picture changes dramatically. With AI, automated systems are not just capable of doing things; they’re also capable of making decisions. Unlike manufacturing automation which replaced factory-floor workers with robots, intelligent automation can impact highly-skilled, highly-educated specialists as well as their less-skilled, less-educated counterparts.

Intelligent automation will affect everyone

The non-linear impact of intelligent automation should serve as a wakeup call to everyone in an organization from the C-suite down. Here’s why: If the impact of intelligent automation were linear, then the tasks requiring the least skill and education would be automated first and tasks requiring the most skill and education would be automated last. Business leaders could easily understand the trajectory and plan for it accordingly.

However, intelligent automation is impacting industries in a non-linear fashion. For example, legal AI platform provider LawGeex conducted an experiment that was vetted by professors from Duke University School of Law, Stanford University and an independent attorney to determine which could review contracts more accurately: AI or lawyers. In the experiment, 20 lawyers took an average of 92 minutes to review five non-disclosure agreements (NDAs) in which there were 30 legal issues to spot. The average accuracy rating was 85%. The AI completed the same task in 26 seconds with a 94% accuracy level. Similar results were achieved in a study conducted by researchers at the University of California, San Francisco (UCSF). That experiment involved board-certified echocardiographers. In both cases, AI was better than trained experts at pattern recognition.

Interestingly, most jobs involve some rote, repetitive tasks and pattern recognition. CEOs may consider themselves exempt from intelligent automation but Jack Ma, billionaire founder and CEO of ecommerce platform Alibaba disagrees. “AI remembers better than you, it counts faster than you, and it won’t be angry with competitors.”

What the C-Suite Should Consider

Intelligent automation isn’t something that will only affect other people. It will affect you directly and indirectly. How you handle the intelligently automated future will matter to your career and the health of your organization.

You can approach the matter tactically if you choose. If you take this path, you’ll probably set a goal of using automation to reduce the workforce by XX%.

A strategic approach considers the bigger picture, including the potential competitive effects, the economic impact of a divided labor workforce, what “optimized” business processes might look like, and the ramifications for human capital (e.g., job reassignment, new roles, reimagined roles, upskilling).

The latter approach is more constructive because work automation is not an end it itself. The reason business leaders need to think about intelligent automation now is underscored by a recent McKinsey study. It suggested that 30% of the tasks performed in 6 out of 10 jobs could be automated today.

Tomorrow, there will be even more opportunities for intelligent automation as the technology advances, so business leaders should consider its potential impacts on their organizations.

For argument’s sake, if 30% of every job in your organization could be automated today, what tasks do you consider ripe for automation? If those tasks were automated, how would it affect the organization’s structure, operations and value proposition? How would intelligent automation impact specific roles and departments? How might you lead the workforce differently and how might your expectations of the workforce change? What ongoing training are you prepared to provide so your workforce can adapt as more types of tasks are automated?

Granted, business leaders have little spare time to ponder what-if questions, but these aren’t what-if questions, they’re what-when questions. You can either anticipate the impact, observe and adjust or ignore the trend and react after the fact.

The latter strategy didn’t work so well for brick-and-mortar retailers when the ecommerce tidal wave hit…

What Managers Should Consider

The C-suite should set the tone for what the intelligently automated future looks like for the company and its people. Your job will be to manage the day-to-day aspects of the transition.

As a manager, you’re constantly dealing with people issues. In this case, some people will regard automation as a threat even if the C-suite is approaching it responsibly and with compassion. Others will naturally evolve as the people-machine partnership evolves.

The question for managers is how might automation impact their teams? How might the division of labor shift? What parts of which jobs do you think are ripe for automation? If those tasks were automated, how would peoples’ roles change? How would your group change? Likely, new roles would be created, but what would they be? What sort of training would your people need to succeed in their new positions?

You likely haven’t taken the time to ponder these and related questions, perhaps because they haven’t occurred to you yet. As a team leader, you owe it to yourself and your team to think about how the various scenarios might play out, as well as the recommendations you’d have for your people and the C-suite.

What Employees Should Consider

Everyone should consider how automation might affect their jobs, including managers and members of the C-suite, because everyone will be impacted by it somehow.

In this case, think about your current position and allow yourself to imagine what part of your job could be automated. Start with the boring routine stuff you do over and over, the kinds of things you wish you didn’t have to do. Likely, those things could be automated.

Next, consider the parts of your job that require pattern recognition. If your job entails contract review and contract review is automated, what would you do in addition to overseeing the automated system’s work? As the LawGeex experiment showed, AI is highly accurate, but it isn’t perfect.

Your choice is fight or flight. You can give into the fear that you may be automated out of existence and act accordingly, which will likely result in a self-fulling prophecy. Alternatively, consider what parts of your job could be automated and reimagine your future. If you no longer had to do X, what would Y be?  What might your job title be and what your scope responsibilities be?

If you consider how intelligent automation may impact your career, you’ll be in a better position to evolve as things change and you’ll be better prepared to discuss the matter with your superiors.

The Bottom Line

The intelligently automated future is already taking shape. While the future impacts aren’t entirely clear yet, business leaders, managers and professionals can help shape their own future and the future of their companies by understanding what’s possible and how that might affect the business, departments and individual careers. Everyone will have to work together to make intelligent automation work well for the company and its people.

The worst course of action is to ignore it, because it isn’t going away.

Workforce Analytics Move Beyond HR

orkforce analytics have traditionally focused on HR’s use of them when their value can actually have significant overall business impacts. Realizing this, more business leaders are demanding insights into workforce dynamics to unearth insights that weren’t apparent before.

Businesses often claim that talent is their greatest asset, but they’re not always able to track what’s working, what isn’t and why. For example, in Deloitte Consulting’s 2018 Global Human Capital Trends report, 71% of survey participants said their companies consider people analytics a high priority, but only 10% are “very ready” to deal with it. According to David Fineman, specialist leader at  Deloitte Consulting, who co-authored the report, business leaders want insights into six focus areas that include workforce planning and shaping, recruiting and staffing talent optimization, culture and engagement, performance and rewards, and HR service delivery.

“The important distinction between focus areas that are addressed today compared with the focus areas from prior years is the emphasis on issues that are important to business leaders, not limiting analytics recipients to an HR audience,” said Fineman.

In fact, the Deloitte report explicitly states that board members and CEOs want access to people analytics because they’re “impatient with HR teams that can’t deliver actionable information and insights…”

As businesses continue to digitize more tasks and functions, it’s essential for them to understand the current makeup of their workforces, what talent will be needed in the future, and what’s necessary to align the two.

Shebani Patel, People Analytics leader at professional services firm PricewaterhouseCoopers (PwC) said that companies now want to understand employee journeys from onboarding to daily work experiences to exit surveys.

“They’re trying to get more strategic about how all of that comes together to build and deliver an exceptional [employee] experience that ultimately has ROI attached to it,” she said.

What companies are getting right

The availability of more people analytics tools enables businesses to understand their workforces in greater detail than ever before. However, the insights sought are not just insights about people, but rather how those insights directly relate to business value such as achieving higher levels of customer satisfaction or improving product quality. Businesses are also placing more emphasis on organizational network analysis (ONA) which provides insight into the interactions and relationships among people.

While it’s technologically possible to track what individuals do, there are also privacy concerns that are best addressed using clustering techniques. For example, KPMG’s clients are looking at email patterns, chat correspondence and calendared meetings to understand how team behavior correlates with performance, productivity or sales.

“Organizations today are using [the data] to derive various hypotheses and then use analytics to prove them out,” said Paul Krasilnick, director, Advisory Services at KPMG. “They recognize that it needs to be done cautiously in terms of data privacy and access to information, but they also recognize the value of advancing their internal capabilities and maturity from descriptive reporting to more prescriptive [analytics].”

According to Deloitte’s Fineman, high performing people analytics teams are characterized by increasing the analytics acumen within the HR function and among stakeholders.

What needs to improve

Like any other analytics journey, what needs to be improved depends on an organization’s level of mastery.  While all organizations have people data, they don’t necessarily have clean data.  Further, the mere existence of the data does not mean it’s readily usable or necessarily valuable.

MIT Chaplain: Emerging Tech Leaders Care About Ethics

The tech industry’s approach to innovation will likely undergo a major shift as new generations of tech leaders come to power. Historically, innovation has been economically motivated for the benefit of individuals and shareholders, which will continue to be true, although the nature of innovation will likely evolve to consider its impacts on the world in greater depth than has been true historically.

“As an innovator, you may be able to make some term gain without having to worry or be concerned about ethics whatsoever,” said Greg Epstein, the newly-appointed first humanist chaplain at the Massachusetts Institute of Technology (MIT) and executive director of The Humanist Hub. “You may be able to achieve some things that we define as success in this world without caring about or even paying any attention to ethics, but in the long term, [that approach] will likely have some directly damaging consequences in your life. What I’m seeing students prepare for today is not just conventional success but to have an inner life that is meaningful.”

Values change from generation to generation, so it should be no surprise that what fueled the tech industry’s direction to date may change in the future. While it’s true that some of today’s tech leaders demonstrate a capacity for doing something good for society, the general trajectory is to innovate, grow, exit, maybe repeat the last three steps a few times and then focus on something like underprivileged individuals.

Doing something “good” later in life is consistent with mid-life realizations of mortality when one questions the legacy one is leaving behind. According to Epstein, the Millennials and Generation Z are more likely to ponder the societal value of their contributions earlier in their career than Baby Boomers or Generation X.

Tech Innovation for Good Versus Tech Innovation Is Good

Arguably, technology innovation has always focused on the positive, if “the positive” is defined as achieving the art of the possible. For example, cars are safer and more reliable than they once were, as the result of technology innovation.

However, the more technologically dependent people and things become, the more vulnerable they are to attacks. In other words, the negative potential consequences of new technology tend to be an afterthought, with the exception of products and services that are designed to protect people from negative consequences, such as cybersecurity products.

In previous generations, technology impacted society more slowly than it does today, so the mainstream positive and negative effects tended to take longer to realize. For example, adoption of the first mobile phones was relatively slow because they were large and heavy, and cellular service was spotty at best. Now, entire industries are being disrupted seemingly overnight by companies such as Uber and Airbnb.

Generational Differences Matter

Each generation is shaped, in part, by the world in which they mature. Over the past several decades, each subsequent generation has been exposed to not only more technology, but more sophisticated technology. The “new normal” is a connected world of devices, many of which are recording everything, and social media networks through which anything and everything can be shared.

“Increasingly, young people on campus want to create collaborative technology [so] that people can have a fair opportunity in life and human beings can help one another to achieve a better of life than we’ve ever had before,” said Epstein. “I think that people are hungry for conversations about what that could look like [and] what that could mean because human beings have never had this responsibility before to transform our collective lives for the better.”

Innovation for a Higher Purpose

Thus far, technology innovators have followed a pattern, which is to innovate, to capitalize, and to then deal with negative consequences later if and when they arise. In other words, the tech industry has been focused on the art of the possible, generally without regard for the entire spectrum of outcomes that results.