Disruptive innovation isn’t a new phenomenon in the business world. Clayton Christensen, Harvard professor and author of The Innovator’s Dilemma, popularized disruptive innovation as a force that “creates a new market and value network and eventually disrupts an existing market and value network.” Simply put, doing things differently to create better results. Or at least that’s the intent.
Across the globe and here in the US, the current political climate is rife with disruptive change. The caveat here is that what works brilliantly in business may not always produce the same positive results when applied to running a governmental body.
Business leaders who shake things up in order to generate better results often deliberately deviate from cultural expectations in ways that inspire others to follow. The way they shake things up initially can make people uncomfortable because they communicate new expected behaviors.
Steve Jobs was a visionary who made it his mission to humanize personal computing–rewriting the rules of user experience design, hardware design and software design. According to an article in “Wired” magazine, “His actions reverberated across industry lines. He shook up the music business, dragged the wireless carriers into the ring, changed the way software and hardware are sold and forever altered the language of computer interfaces. Along the way, he built Apple up into one of the most valuable corporations in the world.”
When Lou Gerstner became IBM’s chairman and CEO the company was losing billions of dollars.
I was consulting to IBM and Gerstner’s team when Gerstner began converting the organization from a group of independently operating vertical silos to an integrated company focused on customer needs. One of the biggest barriers Gerstner faced was an incentive compensation system that rewarded business unit leaders for making their own numbers, sometimes at the expense of IBM making its numbers. The compensation re-design was seen as revolutionary in the IBM world.
“Transformation of an enterprise begins with a sense of crisis or urgency,” Gerstner told a student audience. “No institution will go through fundamental change unless it believes it is in deep trouble and needs to do something different to survive. It flew in the face of what everybody did in their careers before I arrived there,” he said.
Under Jack Welch, GE’s market value grew from $14 billion to $410 billion and revenue multiplied five-fold to $130 billion. He created a revolution inside GE—starting at the top, which is not where most revolutions start. He then got employees actively involved in a company-wide process called Work-Out, a program geared toward giving every employee a chance to propose ways of improving GE’s day-to-day operation.
Not every leader has the opportunity to shake things up as Jobs, Gerstner and Welch did, but sometimes that’s what a leader needs to do—lead with new thinking that makes it clear that we’re where we are now in large part because of what we’ve been doing. To extricate ourselves from the current condition may require us to work differently in order to created better results.
One of the best leaders I’ve advised did just that. He assumed leadership of a large corporation’s flagship manufacturing plant where an employee was killed and another lost his arm in a work-related accident. In the previous five years, there were 370 severe accidents and 1,200 OSHA recordable accidents in the plant. Workers’ compensation costs totaled $11 million.
Dave Rabuano, the new plant leader, initiated a cultural transformation at the plant. Dave rocked the organization’s foundation. It was unconventional. His focus was on building strong leaders, involving employees in the improvement process and using extensive communication to change the culture.
Dave began by wiping out the bright line that existed between management and hourly union employees. He then:
- formed a “stupid rules” committee made up of union and salaried employees. Their mission was to change or eliminate rules that made no sense or served as barriers to excellence.
- invited the three union leaders to participate in weekly plant leadership meetings. He re-configured the meeting room into a circle of chairs without hierarchy.
- invited union employees to work with salaried people to create a pay plan that rewarded employees for the results they created, not just for their time.
- delivered town hall meetings in the round. Instead of inviting town hall participants to submit questions to him, he asked questions of them to signal his values and identify opportunities to improve the plant.
Here’s what was accomplished:
- Accidents declined 82%
- Sales increased 24%
- Productivity went up 11%
- Cost per pound dropped 8%
- RONA increased 14%
Dave harnessed the power of the plant’s people to take the operation to what ended up being unheard of heights. The shakeup seemed revolutionary at the time. His transformation process was successfully implemented throughout the company.
Key Take Away: Even though some ideas may seem goofy given where you “come from,” as a leader, try to give them a chance. Just because it’s never been done before doesn’t mean it won’t work.