Turbulence Ahead: Why It’s Time To Make Bold Leaps Into The FutureBack to blog
Peter Drucker famously said: “The greatest danger in times of turbulence is not turbulence itself, but to act with yesterday’s logic”. As another turbulent year starts, what better time for business leaders to step back from the noise and create some ‘white space’ to reflect on which parts of their leadership are enduring, emerging and eroding, what really matters, and what it might mean for navigating a restless future. Hack Future Lab founder, MIT Mentor and global management thinker Terence Mauri sets out why the biggest risk is not turbulence itself but leading with yesterday’s mindsets, obselete frameworks and out-dated assumptions about the world.
Don’t mention the ‘D’ word
Are you ready for the era of what The Economist recently described as ‘predicatable unpredicatabilty’? The word ‘disruption’ has been mentioned over 2,500 times in quarterly earnings calls in the last three months. The self-proclaimed Economist of Doom Nouriel Roubini has identified ten ‘D’s driving the 2020’s: Debt, Deflation, Depression, Deficits, Demographics, Decarbonisation, De-globalisation, Democratic Backlash, Digitisation, Deadly Disasters e.g. The Global Pandemic. Even job titles are being disrupted. Recent examples include Innovation Sherpa, Tech Philiosopher, Distraction Prevention Coach (we could all do with one of those) and Director of Disruption, who confessed to me his job title was as popular as a funeral director. Like most words in business lexicon they become buzzwords and ultimately lose their impact. Disruption means both change and opportunity. It’s something that can shake up the status quo for better or for worse. I want to reject the false constraint that disruption is something that just happens to leaders and their organisations. The history of humanity is a history of steep learning curves, difficult choices and periods of deep crises. Stone Age, Bronze Age, Iron Age and now the Age of AI, automation and analytics. Did you know that most of today’s famous hectocorns ($100bn Equity Maket Valuations) were born from a crisis (e.g. Square, Inc. Airbnb and Uber were all launched during the Global Financial Crisis of 2008-2009) and iconic companies such as Disney, Volvo and Hilton were started over a hundred years ago during The Great Depression.
Disruption is the rule, survival is a choice
100,000 years ago, we harnessed fire which led to language
10,000 years ago, we developed agriculture and commerce which led to the
5,000 years ago, we invented writing and the wheel which led to travel and cities
175 years ago, we witnessed The Industrial Revolution and its huge ecomonic impact from innovation platforms such as electricity, automobiles and the telephone
Today, five innovation platforms (Blockchain, Energy storage, AI, Robotics and DNA sequencing) are converging in ways that will create huge shifts in the logic of competition, the nature of work and the purpose of leadership. Hack Future Lab’s research shows that in the last two years, companies associated with these five innovation platforms have doubled their Equity Market Capitalizations from $7 trillion dollars to $14 trillion dollars. The next 10- years will continue to scale exponentially creating upending entire industries and reshaping exisiting ones. As we pivot from a period of crises to one of hope and optimism, will you watch the world change around you or will you be you be the one leading the change? New Rules for A New World It’s no longer just about big or small. It’s about fast or slow. Scale is an advantage until it’s not.
Take note of the recent swathe of demergers (GE, J&J, Toshiba). Activist investors uch as ValueAct, Engine No. 1 and ThirdPoint are fighting proxy battles and keeping CEO’s awake at night. (e.g. Consider the recent proxy battle won by Engine No. 1 to appoint independent directors on the board of Exxon Mobil). The last 20-months has been an accelerant for change (e.g. remote work, automation, WFH, e-commerce and business model evolution) and what the Austrian Economist Joseph Schumpeter called the ‘gales of creative destruction’. Change always presents leaders with the choice of 1. Re-imagination and renewal if change is harnessed as tailwind or 2. Relapse and regression if change is perceived as a headwind. Disruption and its closest cousin, change has given leaders a once-in-a-life time reframing moment to rethink and re-architect the nature work, the workplace and the workforce – and how leaders must adapt at pace to this new hybrid, distributed model of leadership where trust is the ultimate human currency for success.
Busting Myths, Hype and Hysteria
Fear and hysteria are at peak levels when it comes to navigating the future of work. We have The Great Resignation (Record levels of employees quitting their jobs) or The Big Quit, a termed coined by Professor Anthony Klotz. The Great Reassement (2/3 people rethinking their purpose at work). The Turnover Tsumani. The Attrition Supercyle. The Hybrid Paradox (what’s our Workforce Hybrid Strategy?) and the Race to Reskill (one of the best ways to outpace the forces of disruption is upskilling/reskilling). No wonder 78% leaders report record levels of burnout, mental exhaustion and anticipatory anxiety about the future. We’re worried about our health, climate change, our job security, our wellbeing and automation. Anticipatory anxiety and performance are like oil and water. It’s a performance and innovation killer. When you’re operating at the edge of uncertainty context is key. Leaders
must strengthen their context-setting, direction setting and pace-setting capability to ensure talent creation and talent enablement. This means context over control, autonomy and freedom over rules, speak up over silence and simplicity over complexity if you want to stay ahead of the change curve.
Attention is the New Oil
People keep telling me date is the new oil. I disagree. Attention is the new oil. Think about it. Attention is rare and constantly under attack from digital distractions, attention extraction platforms and cultures of rush and immediacy. How you invest, prioritise and protect your attention has a direct and out-sized impact on the clarity of your leadership, good governance, mobilisation, ethics and yes – execution. I’ve learned over the last 2-years that you pay a Cognitive Tax when you don’t have an intelligent ‘No’ strategy. What old ways of working, out-dated assumptions or bad leadership habits do you need to stop doing and eliminate? Do less, then obsess. A simple reflection task is to ask yourself how much of your focus is divided between what author Cal Newport calls Deep Work and Shallow Work. 78% of leaders report wasting too much time on shallow work at the expense of deep work and value creating work; 66% report struggle to focus on what really matters and only 20% of leaders report that they excel on meetings costing a Fortune 500 company $250 million in lost labour hours. Focus on focus.
You must protect and fortify your most valuable resource which I call Triple Attention:
1. Inner attention because we become blind to our own blindess e.g. culture blind spots;
leadership blind spots; talent blind spots
2. Other attention to the people you lead and galvanise around you e.g. leadership brand;
messaging and imprintable moments that people can connect with at a higher level
3. Outer attention, which is staying alert to new trends and weak signals that can become
the next growth engine or existential Black/Grey Swans e.g. Run a monthly New Trend
Radar or Open Strategy contest
Strategy+Business contributing editor and CEO advisor David Lancefield says: ‘It might sound esoteric, but making decisions about where you focus, to what end – and then effect them – feels important to me. And something everyone should be able to do. It’s all about imagining who and what you want to become, and then working out what it takes to get there’. Paying attention to where you focus has never been more urgent when 10/15 industries have reported major trust breaches in the last three years (Boeing Max 737, VW Emissions Scancal, Fifa, McKinsey Opioid’s Settlement). Denial is not your friend. I hear that success breeds success but I think success corrupts success. The leaders who can embrace humility to recognise their own blind spots and biases will be better equipped at spotting risks before they become emergencies, adapt and seize new paths to growth. What’s your Return on Attention (attention divided by time/money) as a leader and an organisation?
New World DNA
Change used to happen as a breeze. Now it feels like a category five typhoon. Business, supply chain and workforce disruption is accelerating and business models and leadership models are decaying faster than ever before by the blurring of industry lines, economic and geopolitical turbulence, disruptive platforms and shrinking product lifespans, company lifespans (50% of S&P will not exist in 10-years at current churn rates) and even job life spans (1 billion people will need reskilling by 2030 according to the WED). Leading in a perpetual state of beta is no longer a nice-to-have when your next competitor is more likely to come from a completely different industry to yours. Hack Future Lab‘s research shows that $41 trillion dollars of enterprise value is at risk and 93% of leaders expect significant industry disruption over the next five years but only 23% have New World DNA to turn disruption into opportunity. New World DNA means competing on the rate of learning, competing on eco-systems and platforms (Eco-systems will generate over $100 trillion dollars in revenue pools by 2025), competing on physical and digital (phy-gital), competing on imagination, competing on velocity of decisions, competing on software capability stacks and competing on resilience and anti-fragilty – the capability to bounce back and bounce forward from macro economic or supply chain shocks. It’s no longer companies versus companies or verticals versus verticals. It’s mindsets versus mindsets and leadership models that maximise human contribution and customer success rather than bureaucratic bloat.
Are you trapped in BMI – not body mass index. Bureaucratic Mass Index – a phrase I love – which has been coined by Michele Zanini who is the co-author of the global bestseller Humanocrocy: Creating Organizations as Amazing as the People Inside Them to describe excess levels of complexity, bad meetings and institutional inertia. One of the clearest signs of bold leadership is rethinking your assumptions and updating your opinions. To be future-fit in 2022 and beyond and avoid strategy, transformation or culture drift, leaders must choose a path of continuous learning, experimenting and put purpose to work: an iterative growth mindset versus a bureaucratic fixed mindset. New World DNA leaders take bold action in the face of adversity and scale challenger cultures that are human-led, intentionally diverse, psychologically safe and built for speed. Metrics matter too. New World DNA leaders care about Return on Intelligence not just Return on Investment and are redesigning workflows that are growth-led and match talent to value.
New World DNA Accelerators
The curiosity to learn: evolve as the world evolves
The courage to unlearn: the word ‘unworlding’ or ‘reworlding’ means letting go of all the outdated ways of thinking and being open to new possibilities
The clarity to focus: build cultures where talent is empowered to solve the biggest problems
The conviction to decide: 10,000 decisions will decide the fate of a company
The compassion to care and co-create: it is possible to win with empathy
A Change in Perspective is Worth 80 IQ Points
Albert Einstein wrote: ‘You can‘t use an old map to explore a new world’. A change in perspective is worth at least 80 IQ points in a world where today will be the slowest in our lifetime. New contexts demand new mindsets and leadership principals that can adapt at the speed and pace of the external environment. A great starting point is to ask new questions. What’s the bravest question you will ask today? In my book The 3D Leader: Take you your leadership to the next dimension, I challenge leaders to make 2022 the year to do something bold because many of the old ways of thinking and leading are from the Industrial playbooks of the 1950’s. In an operating environment that is high-certainty, stable and predictable the ratio of assumptions to knowledge is low enough to repeat the same strategy over a long timeline. Now is different. Network effects, speed of scale, speed of change and
high asset productivity mean that competitive lines are being redrawn 3x faster than 10-years ago. Paypal, for example, has a market cap 2.5X bigger than the 151-year old Goldman Sachs and has registered 1,500 patents in the last 5-years (26X more than Goldman Sachs).
When the ratio of assumptions to knowledge is high and the operating environment is volatile and unstable the best way of staying relevant is by accepting two fundamental truths.
1. Competitive advantage is temporary and eroding faster
2. You are either a disruptor or the disrupted. New research at Hack Future Lab analysed one hundred companies across different sectors to identify their top leadership priorities in 2022.
93% are embracing some level of Hybrid Work
74% of companies are doing process automation
50% of companies are doing process reimagination
25% of companies are transforming their operating model
21% of companies are launching business model transformation
17% of orgs have plans in place to scale new leadership, culture as accelerant and enterprise-wide mindsets
There’s a huge knowing to doing gap in business with 84% of leaders reporting culture, talent and leadership inertia and 23% of employees reporting they have mentally quit the job but haven’t resigned yet (Quit & Stayers). For more analysis on these inflection points take a look at BrightLine Initiative’s important work on leading perpetual transformation. Their studies show that over $900 million dollars a year is wasted on failed transformation efforts and 2/3 transformations don’t achieve their goals. As leaders you have to decide which means saying ‘no’ to something.
Are you an incrementalist or a bold advocate of peperpetual transformation? Leaders understand that new, demanding and ambiguous contexts demand new leadership mindsets and nimble cultures of courage (The Finnish call this ‘Sisu’ – a Viking Spirit) because silence is always less risky. The winners of tomorrow will make reimagination at the core of their growth strategies akin to training your worforce for the Olympics without knowing which event they’ll be competing in. These brave pioneers will be able to pivot from ‘One Thing’ workforces (narrow talent density) to ‘Anything Workforces’ (agile, adaptable learners and doers), where work is project-based and closely aligned to enterprise value. For employees, the future of work should mean more choice, oppotunity and meaning and will shift from traditional ‘I’-shaped careers moving up company career ladders to ‘Pi’-shaped and ‘X’-shaped careers (stretch, breadth and depth) that look more like career climbing walls.
The Big Jolt
We’ve all experienced The Big Jolt as a result of what UN Secretary General Antonio Guterres calls the ‘triple crises’ of a Global Pandemic, Climate Emergency (code red for humanity) and Social and Economic tensions. The Big Jolt is best described as a feeling or state dislocation, anxiety or loss. A loss of identity or status; loss of direction; loss of energy or loss of wellbeing; even a loss of loved ones. At the same time in parallel, we’re experincing an extended period of what anthropologists call liminality or paradigm shifting. An in-between world or transcendance state where we have one foot in a pre-Covid world that was safe and predictable and one in a new post-Covid world that feels more infinite and unknowable but also filled with potential to reset and make bold leaps into the future.
To thrive in this liminal world, leaders must embrace the twin forces of courage and vulnerability and step into the unknown, where you reshape the now, grow from discomfort with the status quo and learn from the ability to F.A.I.L. (From Action I Learn). To cope with the Big Jolt, now is the right to create a mental and energy-management strategy that makes bold, human-led leadership a top priority. As Citigroup CEO Jane Fraser says: ‘If people have a whole-life it makes them far better leaders and far better professionals. You have to have the courage to say ‘this is my path – and the organisation has to support it’.
Remagination is the New Execution
Everything starts as an act of imagination but to sustain vitality for the long-term we must harness bold reimagination. Reimagination is the human force that can create a new reality. What is the boldest leadership action you will make today? I believe that leadership is the most powerful platform for unlocking value and human potential (Profit Maximisation AND Meaning Maximisation), yet only a small pool of organisations such as DBS, Gloat, Moderna, Orsted, PayPal) are making bold moves across three imperatives:
Who we are: Strengthen purpose; culture as an accelerant; and the value of values
How we decide: Speed and simplicity; zero distance to the customer; closed to open strategy
How we grow: Hyperscale, inclusive growth, DEI and sustainable leadership for the long-term
One of my last engagements of 2021 was in Sweden with the global leadership team at Volvo Group where I enjoyed a wonderful supper with the CEO and his team. It was a re-affirming day of reflection with a shared spirit of courage + curiosity – that adaptive capacity for turning turbulence into opportunity. If there’s a final call to action that I can offer every leader: make 2022 the year that you do something radical because leadership is never finished. Culture is never finished. Learning is never finished. Make it the year that you turn uncertainty into action, fight complexity with simplicity, adopt new agile ways of leading and working and say goodbye to the status quo. Drucker was right. Turbulence is not the biggest threat itself.
Make 2022 the year to fortify courage of heart, boldness of ideas and attention to care. Terence Mauri is founder of Hack Future Lab, a global management think tank and a speaker on the future of leadership, transformation and change. His new book The 3D Leader: Take you your leadership to the next dimension is out now.
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