It’s the question plaguing business leaders from around the world: how can two years of chaos and disruption be turned into a period of innovation and prosperity?
Even before the pandemic, decades of relentless innovation and sudden digitisation meant ongoing disruption was a part of life for many organisations. As we move towards our new normal, whatever that may look like, we explored this issue with Julian Birkinshaw, Professor of Strategy and Entrepreneurship at London Business School, Nisreen Shocair, Middle East CEO of YOOX Net-a-Porter, and Clare Woodman, CEO of Morgan Stanley’s operations across Europe, the Middle East and Africa.
Know the leading edge from the bleeding edge
Nisreen: Of course, everyone wants to innovate. But you can move too quickly. When I was at Bertelsmann Music Group (BMG), we made most of our money printing CDs. Then Napster came on board with 60 million people, who were sharing and listening to music for free. We wanted to embrace that, so we bought the business. It seemed so smart at the time, but we didn’t have all the stakeholders on side and it blew up in our faces. Our own record label sued us. That’s how I learned the difference between the leading edge and the bleeding edge. We were unfortunately the latter and it killed Napster.
Julian: It’s interesting that so few of these music labels succeeded in selling music online, even though they owned all the content. Why did none of the incumbent companies manage to transition?
Nisreen: The business model is flawed. You still see it now – artists make more money on merchandise than music. But it was also poor management. It was so difficult to convince people who’d spent their lives working in the music business that change was coming. The same thing happened with streaming services like Netflix – companies refused to grow and tried to stick with the status quo. Then suddenly there’s no status quo and, as a result, no company.
One crisis can prepare you for the next
Julian: It’s interesting, because banking is very different in that way. If you look at who’s in charge now, it’s the same people from 20 years ago. They’ve managed to hold on.
Clare: I think part of that is because we learnt some of the right lessons during the financial crash in 2008. The big banks knew they had to be resilient. Again, after Hurricane Sandy, it was clear we needed to dramatically invest in our technology resources. Nobody could have predicted the pandemic, but those investments helped us pivot to a more remote offering. Done right, an innovative response to one crisis can help organisations prepare for the next.
Guide staff through digital transformations
Nisreen: Pre-Covid, many places were too siloed. Digital transformation used to mean appointing a Chief Technology Officer (CTO), who would run the tech side of the business. But then organisations ended up with all their tech people in a box. Now, the role of CTO is becoming redundant. Instead, everyone needs to be a Digital Officer in their own right. Of course, some staff will need more support to adapt but that’s the only way organisations can really grow their digital offering.
Clare: At Morgan Stanley, we’re always investing in our technology. And that tech changes fast – everybody needs to be on board if we’re going to keep up. Over the years, we’ve experimented with different approaches for driving change. Leaders need to think hard about their organisations’ specific needs and develop unique plans for digital transformation. It will be different for every company, so it needs to be personal.
Maintaining company culture is vital
Clare: Overall, we’ve been very lucky. Ninety-five percent of our people are doing their jobs very well from home. But Morgan Stanley is a social organisation, so we’ve been very focused on maintaining that culture remotely.
Nisreen: The transition to remote working was easier for us, because we were used to working across countries and talking to each other through a screen. Plus, we were already working from home two days a week, so the blueprint was there. But we struggled with a breakdown in culture, especially with new joiners who’ve never had the in-person experience. Going forward, we need to consider how companies can maintain a cohesive culture across hybrid working models.
Clare: I don't think culture is just something that is transmitted physically. We worked really hard to give our new recruits plenty of online discussions, networking opportunities and events. We were able to bring them into our established culture, even without all the in-person interactions.
Nisreen: Moving forwards, organisations also need to remember that not everyone benefits from working from home. How many young people live in one room apartments or shared accommodation? These considerations need to be a factor.
Age isn’t a barrier to growth
Nisreen: Absolutely not. It’s attitude, not age that makes the difference. I’ve seen very young people who are extremely resistant to change and older people who were open to ideas and willing to learn. This is vital, because people are retiring later, especially in the UK. Many people are also feeling poorer in later life. Companies have a responsibility to help people stay employable and to keep their staff agile and valuable for longer.
Clare: Exactly. We’ve run some very successful return to work programmes for women who’ve taken time out from financial services. We should be expanding these sessions to cover a much broader set of people.
Advice for female leaders sailing through disruption?
If you feel like you’re lacking a specific skill, go out and get it. In my case, I felt that I was missing some financial skills, so I went and got an MBA
, focusing my courses on finance.
It’s also important to know what you’re good at. I love to clean up messy things and I’m good with people. The best advice is to know yourself and apply that knowledge to industries where you can flourish. Don’t worry about the glass ceiling, just focus on yourself.Clare:
Keep up your network. Stick with good people and develop your own personal board of directors to give you support. Then reciprocate! Extend a hand and bring others up through your organisations.