Saturday, December 23, 2017

Disruptive Technologies - Friend or Foe for the CEO



I was invited by the CII Western Council to speak to their CEOs forum on Disruptive Technologies recently (Ahmedabad, Dec 2017). I designed my talk with two objectives in mind 
(a) create an awareness, among the business leaders, of the disruptive potential of certain new technologies and (b) discuss how traditional businesses should respond to disruption.

Disruption arises when successful businesses fail precisely because, in the face of technological change, they continue to make the choices that made them successful in the first place.


We looked at the exponential growth of technologies and the impact of their convergence - cited specific examples in AI, Data Analystis, Cybersecurity and Additive Manufacturing. Also emphasized the need for learning Robotics and IoT. Analyzed the technologies that are dependent on Infrastructure and regualation driven - renewables,  autonomous vehicles, healthcare and synthetic biology.

If we analyze how GE invested in disruptive technologies such as Industrial Internet and Additive Manufacturing, adopted bold business models such as reverse innovation - it looks like the CEO Jeff Immelt did all the right things to secure GE's future. Unfortunately, when all these preparation for the future was underway, the GE stock price steadily came down and pressure from activist investors made their CEO step down. Steve Blank has written an excellent analysis of what went wrong in a recent HBR article - https://hbr.org/2017/10/why-ges-jeff-immelt-lost-his-job-disruption-and-activist-investors?autocomplete=true 

While it is important to encourage innovation, it is equally important to execute current strategy and survive. The single-minded pursuit of shareholder value, as measured by the current stock price,  has contributed to pervasive short-termism and diverted human and financial resources from needed investments in innovation.

Jack Welch, famously said that,
"..I always thought any one could do one or the other. (a) Squeezing cost out at the expense of the future could deliver a quarter, a year, may be even two years, and it is not hard to do.
(b) Dreaming about the future and not delivering in the short term is the easiest of all the mistakes.
The test of the real leader is balancing the two."

I concluded by saying that the CEO of the Future will need NExperts and FLExperts more than Experts. Nexperts who can see the future trends & needs - Flexperts who can create the flexibility needed to respond to the changes.

The Disruptive Technologies will be Your Friend – if you understand their potential early and invest.

They will become Your foe - if you ignore or underestimate their potential




3 comments:

  1. Awesome Insights, Shankar. Well timed as well. CEO's paying for taking bold step is detrimental to Innovation. This also means leaders need to be Ambidextrous in their approach.

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