How to survive in a world of disruptive change

Irving Vladavsky-Berger worked at IBM from 1970 to 2007, served as a strategy advisor at Citigroup, HBO and Mastercard, and is also a professor at Imperial College. Since 2005 he has been with MIT. And in his spare time he writes columns for the Wall Street Journal. He recently published a half-thought / half-review of a book on the Agility fashion theme. The term can be translated as the ability to move quickly and easily, the ability to think and understand quickly.

I like reading such business articles to try to find an application to myself, evaluating myself and interaction with the outside world as a kind of business. A cynical look, but utterly rational. I, like any business, have liabilities, assets, a brand (that is, how others perceive me), as well as a certain development strategy and tactics.

Often, all business advice, like the great secrets of life coaches, is quite commonplace and, of course, understandable. Indeed, in order to succeed in life, you need to come up with a strategic goal, outline tactical steps, come up with a certain algorithm of actions. Everything is simple and obvious, but for some reason many people prefer to act at random, and the goals look like dreams of rainbows and unicorns. I will never forget how one friend told me how he would buy himself a motorcycle. The story featured beautiful pictures: trips to the bay, meeting a girl from work under envious glances, and the like. He didn't think about the basic things – what type of motorcycle, how to choose it, where to store and maintain it, how much equipment costs, etc. The result was expected: the purchased motorcycle turned out to be in trouble, and the prices for winter storage and repairs were unpleasant. A friend sold the motorcycle cheaply and then paid the loan taken for the purchase for another six months. His experience, by the way, does not teach anything, but he is quite successful in his current position, and 150 thousand salaries are enough to make ends meet in St. Petersburg.

How to survive in a world of disruptive change

Usually the end of the year is the time to take stock and outline new plans. And this article is great for adding an agile agenda to your life when setting goals for the next year and regularly doing preventive analysis of risks and opportunities (more on this later).

Material taken from the WSJ website.

Looking back on my long career, I soberly understand how many once powerful IT companies have gone into oblivion or become a pale shadow of themselves: Digital Equipment Corp., Wang Laboratories, Sun Microsystems … The list is easy to continue.

The disruptive factors are probably most evident in the booming IT industry, but no industry is immune from it. In less than two decades, the global music industry has lost more than half of its revenues, while print advertising revenue has declined further. Retailers have also undergone significant changes due to the development of online sales. Likewise, the entire telecommunications sector has been reformatted by the proliferation of mobile phones.

Why have so many companies died due to disruptive technological and market changes? Was it possible that, despite their best strategy efforts, their leaders failed to anticipate change and were caught off guard? Or everything was like the actors in the Greek tragedies: they saw that changes were taking place, understood what to do, but still were unable to make the necessary strategic and cultural changes.

“The evolutionary fitness of organizations is determined by their ability to respond effectively to changes in the environment,” Leo Tilman and Charles Jacoby write in their recently published book Agility: How to navigate the unknown and seize opportunities in a world of destruction.

Companies need to be flexible if they don't want to go the dinosaur path. They must invest in processes, culture and capabilities that foster this flexibility.

Agile software development includes items such as early access to experimental prototypes, stable user feedback, continuous improvements and updates, as well as quick response to changes in technology, changes in market and user needs.

But what does agile mean when it comes to business, governments and other institutions? The book's authors define agility as 'the organizational ability to effectively identify, evaluate and respond to environmental changes in ways that must be focused, decisive (that is, not just a resolution, but action) and based on the desire to win'.

One of the main messages of the book is that agility is achievable. To help organizations, the authors break agility into three main components: detection, assessment, and response.

Detection. In today's fast-paced world, every company, no matter how big and powerful, must see itself as a planet one asteroid from oblivion. After all, perhaps no one wants to know about an approaching asteroid a few minutes before the impact, and then improvise on the move, trying to find a strategy to survive. Talented people should notice an asteroid from afar (in this case, an asteroid means a transformation in technology and a collapse of markets).

How to survive in a world of disruptive change

'Organizational ability to identify and respond to environmental changes goes hand in hand with a deep understanding of the competitive environment in all its richness and complexity … The ability to stop, look around and ask a question about what we do, what we know and what we don’t know, in the modern world is often viewed as an unacceptable luxury, because there is no time to explain, we must rather work, 'the authors of the book write. And they make this luxury of reflection a critical priority.

Assessment. How can a company not only survive the forces of creative destruction, but use them to transform and propel itself into the future? How can you turn survival into a driving force for innovation? “Senior leaders must continually assess and explain to the entire organization what information is needed to shape strategy, manage risk and direct execution,” the book's authors write.

Answer. The authors argue that there are two kinds of responses to organizational change. First option. Top management and management monitor and make changes to the overall strategy, business model and financial goals. Designated field officers are responsible for tactically responding to changes in the course of strategy implementation. Both top managers and field staff need to understand that their role includes taking risks, a willingness to innovate, and a certain amount of improvisation. Both require a deep understanding of the operating environment and advanced management skills.

It is essential to success that all stages of the detection, assessment and response process are supported by three key organizational competencies:

  1. Risk analytics. It helps to uncover hidden connections between externally unrelated risks, group different risks into groups, and align the response with organizational goals and resources.
  2. Determination. The organization must act rapidly both when problems and opportunities arise. Determination is impossible without a common understanding of what actions should be taken (paragraph “Risk analysis”), as well as excellent communication within the company.
  3. Implementation plays a vital role in strategizing because you need to be sober in assessing your strengths and weaknesses and understand what the company can actually achieve.

On the one hand, things are written obvious and correct. On the other hand, there are already so many books and articles about business, but things are still there. Perhaps the whole point is that there is still, relatively speaking, 'given or not given'. For example, many are absolutely not given to lose weight. Even though you crack. And someone, despite years of training, will never become a jock-athlete. Someone can come up with plans, algorithms, look for career opportunities, but they will never be able to jump above a certain ceiling. Well, that's how the world works.

How to survive in a world of disruptive change

The same goes for business. There was Steve Jobs with an understanding of how it should work, and now it worked. And there is Tim Cook. And so he can conduct hundreds of brain storms, analyzes and the like, but there will be no benefit. And Apple is still walking quietly down the slope, as much as we all want the opposite. Samsung (and, it seems, LG), if I'm not mistaken, has this practice. Every 5-10 years, they evaluate their staff from a development perspective. If they see that a specialist is not growing and is already giving the company the maximum, then they cut him down, replacing him with a fresh one with a full supply of strength and energy. A very sane approach.

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