Four years ago, I downloaded an article that I keep coming back to. It was called “Managing Disruptive Change Be Ready for What Is Coming”, written by Estevao Seccatto Rocha. At the time, Estevao worked for KPMG in São Paulo as a transformation and turnaround advisor. Today according to Estaveo’s LinkedIn, he works for Stone Partners, still in São Paulo.
I think he wrote this article while studying at RWTH Aachen University, and he references Professor Malte Brettel, the head of the Innovation & Entrepreneurship Group.
I kept coming back to this and decided to try and pick out some of the points here in this post. The work is either Estavao’s or Professor Brettel. I am trying to translate it in a way that works for me, and hopefully, you as a reader of this posting site to bring disruption far more central in your thinking.
Digital is one of the most disruptive forces we have to face. This is why I decided to summarize some points, remind myself and appreciate what we really mean when we advocate and encourage going disruptive.
Understanding the basics of disruption
Disruption is constant; it simply disturbs all we do. If we ignore it, we lose what we have; if we determine how to meet disruption, we have a chance to survive and even come out better, certainly differently.
Estevao offers this “Disruption change people’s routines, the way people think, behave, do business and learn, it “displaces an existing market, industry, or technology and produces something new and more efficient and worthwhile. It is at once destructive and creative.”
Much of the article attempts to apply a systematic approach to disruptions, which is why I partly like it. Disruptions come at you in different ways, and the ability to manage all the possible variables makes the management of disruption really tough.
The first need is to try and understand the disruption
- Understand the disruptions. Why companies are disrupted, and what are the sources of disruptions?
- Build patterns and try to understand in which pattern is causing disruption;
- Start reacting to the disruptions in a general way;
- Look more closely, understand the strength of the disruption;
- React in a specific way;
- Understand the changes in the environment and respond to them.
Disruptions happen as they are mostly triggered by 1) Regulative Environment changes, 2) Technology, 3) Customer Behavior changes, 4) Competition and New Players entering.
Professor Brettel established six specific disruption patterns, depending on how the disruption affects an organization.
Professor Brettel outlines each disruption pattern with clearly different intensities but lays out the reaction patterns, dependant on the degree of disruption, in this useful visual.
The article looks at different disruption patterns by Speed, Stage and by Impact. It then concludes with the actions to be taken dependent on the degree of disruption. by describing the actions, action pattern, action manifestation and rationale.
I have not brought these into this post. For me, it is the structured approach, not so much the specific questions that were applied (at the time), so if and when disruption hits, I have the basic thinking framework shown above and the suggested reactions to these. I think each disruption might have different reactions to consider.
The conclusions from the article are:
Success will come from being faster and flexible, anticipating and responding to drastic transformations, with an innovative approach, embracing change and capitalize on disruption. The organization must have dynamic capabilities to transform it into sustainable advantages.
One in three CEOs says their organizations have failed to achieve the value they anticipated from previous transformation initiatives due to:
- Failure to understand the complexity of the operating model: The most commonly identified barrier to success is underestimating the significance of operating model changes necessary to effect transformation across the organization;
- Inability to innovate: organizations are incapable of implementing formal innovation processes, management, and budgets;
- Missing the cultural connection: existing organizational culture is a barrier to execution;
- Failure to take a “business value first” approach to technology: organizations’ legacy technology/systems are a barrier to success. Transformations that begin with a specific technology (rather than with strategic objectives) are twice as likely to fail;
- Inability to execute: organizations are incapable of executing an implementation plan to build and operationalize a new target operating model.
It is sobering that embarking on transformation change, mostly forced upon you, ends up as a failure. The five summary points are as relevant as the outline to manage disruption shown above. These five aspects doom the changes if they are not really focused upon. All the structure in approach is only as good as the ability of the CEO and team undergoing change can avoid these five failures.
So I wanted to capture this article or paper of Estevao’s as it has been on my mind for several years. I needed to place it in a post to be reminded, and as digital disruption is becoming the higher constant, it is good to be logged here to refer to.
