Businesses that ignore early indicators of disruption are setting themselves up to fail. Hunkering down isn’t the answer either. Leaders must build structures and teams to help them respond, along with their own plan to shake up the market.
In Criticaleye’s latest CEO Research, 91 percent of chief execs said their business model was facing disruption and yet only 6 percent were fully confident in the senior leadership team’s ability to react effectively.
Amy Francis, Senior Relationship Manager at Criticaleye, comments: “Strong leadership is crucial to navigate disruption, but that doesn’t mean having to know all the answers yourself.
“Even the most tech-savvy and commercially-astute CEO can’t expect to predict everything that will happen to their industry. It’s about having the humility to acknowledge that and then asking the right people the right questions.”
We spoke to leading CEOs about what they are doing to ensure their businesses continue to thrive.
Build structures that detect disruption
Guillaume Bacuvier, CEO, Dunnhumby
Companies that are large, established and doing well, may struggle to detect disruption, as typically competitors start small and often in a niche. You must be set up to detect and accept potential threats.
But even if you recognise that something very disruptive is happening, you also need to be able to take the appropriate action quickly and strongly. If your business is doing well, it is hard to be brave enough to throw away things that are working and build something new – that’s the curse of the established company.
At Dunnhumby, we have a small corporate ventures fund, through which we scour the start-up market to look for companies that are operating in our space, or to the side of it, that we think are interesting. This gives us the opportunity to invest, acquire or simply get an early stage feeling about what’s going on.
This has guided our product strategy in some areas, such as customer data management and portability. Following the GDPR Directive, companies must allow consumers whom they hold data on to access, download and share that data with another provider. If this became widespread it would be materially disruptive in our industry. There are start-ups who have been building services to help consumers access and download such data, so we’ve been keeping an eye on this.
Become a disruptor
Neil Packham, President / CEO, CDK Global International
As a business, we are at risk of disruption, but we also have the opportunity to be a disruptor by moving from being a product-led organisation to a platform-based one.
That means we still provide a number of our existing products and range of services, but we do it in a much more open-architecture way. That allows us to work with other organisations, partners and competitors and operate differently.
The benefit of moving to this platform-play is that, although we are not providing all the front-end applications, we are the conduit through which all the data flows, which gives us significant opportunities.
We’ve also created an innovation practice, which has led to us operating in a different way. Previously, we would tend to be internally focused, creating products and services before taking them out to the market. Now we have set up a lab where we work with our customers, understanding their problems, pain points and how we can co-create solutions.
Challenge yourself to think differently
Steven Cooper, CEO, C. Hoare & Co.
It’s hard to get a senior team around you that has the confidence to run an existing division or a function while also having the capacity and ability to think about how that business may be disrupted in tomorrow’s world. Those can be very different skillsets.
It’s a challenge, because you need someone who is fit and proper to run those businesses today – and in the banking world that involves a lot of regulation – but that might not be what you need going forward.
One of the things I’m doing is creating an Advisory Board. I’ve got three or four people I’m putting together to come and spend some time with me, my management team, the owners of the business and the Board.
I’ve carefully selected those people: one is the co-founder of a very well-known digital challenger bank; another is an entrepreneur largely in the tech and bio-science industries, so he’s involved in next-generation platforms; the third person has done a lot of work on ESG. I’m asking them to challenge us to think differently, outside of the constraints of normal day-to-day activities and formal Board meetings.
Stick to your plans
Andy Hague, Group CEO, Cyberfort
Our industry – and the whole security, data and cyber area – is being hit by new entrants daily that are laser-focused on their own very specific offering. Massive funds are ploughing money into what might be the next big thing in our industry. They are prepared to back twenty cyber start-ups and hope that one of them is the unicorn – so you get twenty-times the disruption.
Competing with that can be tricky, especially if your senior management aren’t proactive. I’m not short in any way of technical skills and brilliance, but there is a shortage of ownership, drive and essentially just pure bravery – these are facets that disruptive players have an abundance of.
I’m restructuring at the moment, and I’ve created new roles, including a Group CTO, Group COO and Group Chief Revenue Officer. I’m filling those positions with people who can react to disruption themselves; it’s about attitude, self-confidence and taking ownership while being worldly-wise.
We are also sticking to our plans. The key thing in our market is not to try and play new entrants at their own game, because they are all chasing such niche markets. There should be more than enough for us to go at with our core offering. We are customer-centric and quality driven, but while most new entrants are focusing on one very clever thing, we are going for volume, depth and breadth.
Emma Carroll, Senior Editor, Criticaleye
Other findings from Criticaleye’s CEO Research 2019 include:
- 65 percent of CEOs recognise they need to improve the quality of strategic debate
- Retaining talent and developing skills are the top priorities for CEOs
- Not enough time spent discussing strategy is the top reason for management team failure
- 97 percent of CEOs agree external mentoring improves the performance of senior execs
To see the full Research report, click here