Leading through Today’s Confluence of Crises
18/03/2021
(This article originally appeared in Ambition, the thought leadership publication by the Association of MBAs (AMBA) – in print and online – and has been republished on this website with the permission of AMBA.)
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, the Internet of Things, robotics, and blockchain.
Reconstructing the future
COVID-19 has further inflamed this – it has shown that all businesses big or small, legacy or startup are not immune to this firestorm of disruption. All businesses need to reconstruct their future and the urgency for such an undertaking has never been greater.
Yet, many leaders find dealing with disruption – and envisioning its future – to be very difficult because they are stuck in the old ways of thinking and action. A fresh method of leadership thinking, proposed in the book, The Phoenix Encounter Method, gets leaders to think carefully about how they would marshal the forces of firestorm disruption to destroy their current organisation, and then enables them to generate options to rebuild their future- ready organisation and its business model. While challenging, this method allows leaders to discover that they can be their best enemy and that this can be a good thing – formalising the intuitions expressed by many legendary business leaders.
Killing your darlings
Shigetaka Komori, CEO of Fujifilm, took this thinking to all-time highs in 2020: “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 and 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.”
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 natural disasters, economic crises or manmade disasters.
Crises have a significant impact on consumer behaviours and firm performance, but in most instances recoveries post-crisis allow 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 experienced before. It started off as a health crisis but has since morphed into a confluence of crises ranging from demand crisis, supply crisis, humanitarian crisis, currency crisis, banking crisis, and sovereign debt crisis.
Fundamental changes in behaviours
Thinking through the implications of this confluence is not going to be easy, especially given the challenges surrounding the vaccine rollout. But I think a couple of things 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, mobile commerce and omni-channel as well as the impact on products and services that involve communal proximity, such as food, travel and entertainment.
Firms and employees have come to recognise that work no longer refers to a location, but instead focuses on an activity that can be location-agnostic. 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 the boom in the consumption of collaborative online workplace tools like Zoom, Slack and Teams to name a few.
Blueprint for renewal
The challenges for leaders and organisations is to first imagine how the confluence of the forces of disruption combined with COVID-19 could disrupt their business and then chart their blueprint for renewal and transformation.
Paddy Padmanabhan is a Professor of Marketing at INSEAD, Singapore, and Co-Author of the book The Phoenix Encounter Method (2020).
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