In my previous post based on SIIA’s recent Information Industry Summit #IIS14, ‘New Business’ Models, Not Technologies, Drive Disruption, I talked about the huge challenge facing existing business information and media companies when they go up against startups: VC- and angel-funded business are expected to spend money, not make it, until they are established (and some existing players are destabilized).
Diane Pierson, principal of the new consulting firm Wheels-Up Innovation, firmly addressed the practical issues around changing an existing organization in her presentation, The Five Myths of Internal Disruption. I found one of the first stats she offered oddly encouraging: 75% of startups fail within the first year, but (only) 70% of all internal disruption activity ends in failure. In spite of the financial advantage that comes with VC or angel funding—which, of course, varies widely in magnitude—existing companies actually have a slightly better chance of getting something new off the ground.
I am sure leaders of existing companies can vastly improve their chances of creating something new, whether it’s a product or business model, by leveraging all the assets that have made their companies successful, but, they must also understand that disruption is a delicate, highly volatile undertaking.
One of my favorite quotes of #IIS14 was Pierson’s definition of internal disruption: “The willful and intentional introduction of conflict into an existing organization for the greater good.”
Most people don’t like conflict and few know how to handle it productively. CEO, presidents and other top executives are no different in this regard, I have found.
Someone must be the designated Disruptor, the champion of change, Pierson said. This person may come from within the organization or, as often happens, from the outside. A CEO must expect this Disruptor to be a lightning rod for conflict, as well as a catalyst for change, and the CEO must determine his or her own tolerance for conflict before putting a Disruptor in position.
All too many times, I have seen top management abandon their own hand-selected Disruptors when complaints start coming in. Maybe they expected conflict to accompany change, but they were not aware of how much conflict they themselves could withstand. “Your existing organization is watching you to see how strong your resolve is, how far you want to go with this disruption, and how quickly you will move,” Pierson said.
You might not realize it, CEO, but if you waver on the course that you have set—because you are destabilized by the backlash—your organization will sense it and they will withdraw support in subtle ways from the Disruptor and his or her projects.
CEOs can take steps to prevent that situation, though. Pierson pointed out that Disruptors, who probably have a pretty high tolerance for conflict, will need to be reined in, coached or redirected by the CEO. “Make sure disruptor knows what his or her decision rights are,” she cautioned.
Pierson also pointed out that people whose responsibilities are not involved in disruptive activities—such as customer service, production, sales—can be left out, and those who are immersed in disruption, particularly the Disruptor, should learn to appreciate people who are not part of the change team. She noted that there are generally two types of people in organizations, the changers and the builders. Changers like to create new things and they usually like to move to another challenge once they have set change in motion. The builders in the organization will (eventually) take up the new activity and make it better—because that’s what they do.
Marie Griffin, principal, Marie I Griffin Consulting, is an independent business-to-business writer, content strategist, editorial manager and conference programmer. Follow her on Twitter at @griffinsider and her blog at griffINsider.com.