On April 4, 2018, we had a freewheeling discussion with a dozen leaders from the Montreal business community. The topic: disruptions. Our participants represented a wide variety of fields, including health care, banking, private equity, and the public sector. We had three questions for them: In terms of disruptions, what are you seeing? What are you doing about it? What should Ivey do to prepare future leaders for disruption?
The ripple effect
One participant described a study of disruption that he had undertaken for his investment firm. He and his team of colleagues ultimately reported to the company’s board that disruption could be described as occurring on at least three levels: the technological, the business-model, and the social/political. He stressed that disruptions tend to ripple outward in ways that may not be immediately obvious. For example, most people are aware that the onset of autonomous vehicles will reduce demand for professional drivers, such as drivers of taxis and trucks. But they are also likely to disrupt the used-car market, the parking-lot industry, and many other tangentially related fields.
“If 30 per cent of parking lots will not be needed over the next 10 or 15 years, how will that affect the urban real estate market?,” he asked.
Using technology to improve quality
Another participant focused on the relationship between data and doctors. Data that are readily accessible to the patient are breaking the physician’s former knowledge monopoly – data regarding drug efficacy, hospital ratings, and so forth – and thereby reducing the doctor’s influence. But even as technology transforms medicine, there are silver linings for both patient and caregiver. Soon, we will be able to see a doctor without actually going to a doctor’s office. And while some worry about the privacy issues associated with the centralization of medical data, others see benefit in the reduction of unnecessary or duplicative testing.
Clearly, though, if technology is going to be allowed to change the fundamental nature of the service provided, it should also be called upon to ensure the quality of that service. Accordingly, new feedback loops are being created, and are being used faster and more fully.
“We take a survey of every client. They are linked to both the service centre and the employee, and we act on those surveys, every day,” said one participant. “Why have we hired digital marketing experts? Because we simply can’t afford to have one of our centres underperforming.”
By the same token, many firms are using tools like Office Vibe to take the pulse of their employees on a regular basis.
“If there’s a problem that you spot and deal with right away, it goes away. If you don’t, it boomerangs back on you,” said one participant.
The social impact of disruption
Yet another participant focused on the social/political aspects of disruption. If technology puts people out of work – which is frequently the case – what impact will that have on the social fabric of developed countries? And assuming that economic and political power continues to shift from the West to the East, won’t that shift only compound these problems of dislocation and unemployment? In other words, will continued “successful” disruption lead to large-scale economic distress and social unrest?
Social change can be a potent force – especially when combined with economic motivation. Several participants focused on the impact of the “sharing economy,” which seemed unimaginable not so long ago. Who in the world would rent out their own room and allow a total stranger to live in it? Who would willingly share a ride with a stranger? But as Airbnb and Uber have convincingly demonstrated, the answer is this: People with incentives that they find compelling will join the sharing economy. In 2017, one participant pointed out, Uber’s bookings in the U.S. exceeded all U.S. taxi bookings combined. Generational changes, too, fuel these kinds of developments, meaning that they are more likely to accelerate than be reversed.
A shorter time horizon
Many participants agreed, for better or worse, that already short investment time horizons are getting shorter. In the recent past, it was reasonable to consider three-, five-, and 10-year ramp-up periods for new businesses and lines of business.
“But things live and die a lot quicker than they used to,” one participant said. “We invest today with the expectation that the business may be very different – or even gone – 18 or 24 months from now.”
Investments tend to be smaller and staged, and successes (however they are defined) need to come more quickly.
According to several voices around the table, one way that businesses are learning to move faster is by listening harder to the young people in their ranks. They are giving their young people more airtime in meetings, affording them the opportunity to challenge the conclusions that decision-makers are reaching, and building them into key presentations. These tactics decrease the chances the company will be misled by conventional (i.e., old-and-outmoded) thinking, and has the added benefit of helping to develop a next generation of leaders who are not only versed in corporate conventions, but are also living with – and comfortable with – rapid change.
Be comfortable with change
The conversation concluded with a discussion of the skills that tomorrow’s organizational leaders are going to need – and what business schools can do to instil those skills. There was a consensus that a breadth of perspective will be increasingly important in the future.
“Make them citizens of the world!,” said one participant, prompting nods around the table.
Traditional case studies and guest speakers are a good foundation, most participants agreed, but more is needed. Can business schools encourage their students to do dual-degrees? Can they offer more experiential education? As in several of the prior conversations in this series, participants felt strongly that business schools should focus on critical thinking skills, rather than the substance of a particular function or industry that may change radically within five years. They should foster self-awareness and humility in their students – and still encourage their ambition.
One participant confessed he was uncomfortable with change.
“When I get a new trading platform, I want to just kill myself,” he said. “And I’ve gotten four in the last two months!”
His resulting prescription – with which many around the table agreed – was both simple and complex: teach them to be comfortable with change.
