John Clements Consultants & Harvard Business School Re-Imagines Leadership in the Age of Disruption
As the world around us changes, organizations need to discover ways to reinvent themselves against the waves of disruption that is sweeping across businesses and industries alike. We need courageous leaders to evolve and adapt to the disruptive trends facing businesses today. In response to this pressing issue, John Clements Consultants, Inc. and co-presenter UnionBank, in partnership with the Harvard Business School Club of the Philippines, Harvard Club of the Philippines and Harvard Business Publishing, and with media partners ANC and the Philippine Daily Inquirer, hosted a conference entitled Re-Imagining Leadership in the Age of Disruption at the Makati Shangri-La last July 10, 2017 from 8 AM to 5 PM.
Program facilitator Ranjay Gulati, one of Harvard Business School’s most distinguished and sought-after professors, conducted a full-day workshop on fearless leadership in an age of turbulence and the necessary skills to survive in the digital and disruptive world of business. More than 80 senior executives and leaders from various industries gathered for this prestigious, once-in-a-lifetime opportunity.
John Clements Consultants President and CEO Carol Dominguez officially opened the event by welcoming the participants and formally thanking the sponsors. “This conference is part of our commitment to bring the Philippines to the next level by bringing great minds to teach us how to advance our nation and elevate the leadership capabilities of our people,” she said.
Program partner and UnionBank Senior VP Eugene Acevedo also spoke a few words. “We think of disruption at UnionBank everyday. All companies go through the same thing; some more than others. And if we don’t do anything about it, we’ll go the way of the dinosaurs.” A former student of Professor Gulati, Mr. Acevedo went on to introduce him.
Professor Ranjay Gulati took over the stage. “It’s been three to four years since I’ve last been to the Philippines,” he said with a smile. “It’s nice to see both familiar and new faces.” He provided an overview of the program that was divided into a series of sessions consisting of a combination of interactive lectures and case discussions, as well as an exploration of the disruption environment, beginning from the market level down to the organizational and individual levels.
Can technology alone cause disruption?
Prof. Gulati experienced disruption for the first time through a successful paper company that sold paper for airline tickets and bank statements. The company refused to see the signs pointing to online, paperless forms, and they declined as a result. “But disruption doesn’t only happen because of technology,” Prof. Gulati said. “Disruption can happen anywhere — it’s not something that’s industry-specific — and there are many factors that cause it.”
One notable example is Harley-Davidson, who was failing in the motorcycle business in the 1970s. Back then, if customers wanted designer bikes, they bought BMW, and if they wanted durable, practical bikes, they bought Suzuki. Harley-Davidson became a disruptor, creating a niche by tapping into a customer’s unmet need: they marketed their bikes as a lifestyle choice. They organized weekend get-togethers with Harley bike owners that became official clubs that exist to this day. Harley-Davidson offered the message that you belonged to a group, a family.
“Disruption doesn’t have to mean more, either; it can also be less,” Prof. Gulati said. Southwest Airlines took a different route from other airlines: they squeezed more flights a day from each plane and didn’t serve food on board, yet they made more money by lowering their fares because people who previously couldn’t afford to fly now filled their seats. The company created the template for other low-cost airlines to follow.
Netflix vs. Blockbuster
Prof. Gulati discussed the Harvard Business School case “Netflix in 2011”, characterizing the difference between Netflix and Blockbuster’s business models and whether the former’s business model was disruptive.
Netflix initially started out to provide a home service model that would do a better job satisfying customers than the traditional retail rental model that Blockbuster operated in. But as the start-up encountered challenges, it underwent several major strategy shifts before ultimately developing a business model and an operational strategy that were highly disruptive to retail video rental chains.
The combination of a large inventory, a broad recommendation system that drove viewership, and a large customer base made Netflix a force to be reckoned with. Blockbuster, the nation’s largest retail video rental firm, was initially slow to respond but it eventually rolled out a hybrid retail/online response. Aggressive pricing pulled in subscribers — but at a price to both companies.
Many organizations look to innovation as the secret sauce for their success in today’s volatile economy. However, these same firms are witnessing dramatic shifts in the competitive landscape with intensified competition and increasing commoditization of offerings that lead to diminishing returns from innovation.
Prof. Gulati discussed topics identifying the essential foundations for the shift from products to services to solutions, how firms in a range of industries use platform innovation to build and sustain profitable market positions with top and bottom line growth in difficult markets, and how companies leverage open innovation to tap into a dispersed resource base.
He cited megatrends that affect disruption such as aging populations, voice, emerging markets, and big data. One factor is generational preferences and the difference between aging populations, whose needs become more complicated as they grow older, and millennials, the next generation of customers, whose mantra is “I want it fast and I want it now.”
Prof. Gulati also shared the keys to managing innovation cycles. “Keep the core business healthy as long as possible,” he advised. “Invest in disruptive technologies while the core business is still healthy, and focus on what’s important.”
Mobileye: The Future of Driverless Cars
The next session tackled a second Harvard Business School case on Israeli company Mobileye. After 15 years of building a leading technology for autonomous driving systems, Mobileye, a Tier 2 supplier to the global automobile industry, emerged as one of the most exciting companies in the race for the driverless car and looked set to become the standard for vision-based autonomous and ultimate self-driving cars.
Prof. Gulati and the participants discussed the company’s competitive position, the challenges of sustaining its advantages in a highly competitive industry and how it should work with Google, the known leader in self-driving revolution.
Building Organizations that Scale and Last
Many entrepreneurial ventures fail not because of an inability to attract customers but because of their failure to evolve their organizations. “Entrepreneurs can create the business, but they don’t seem to know how to make the business grow,” Prof. Gulati said.
A lot of ventures are adept at gauging unmet market needs and creating novel offerings; however, they fail to understand how to scale their organizations in such a way that they can retain their entrepreneurial spirit that drives growth and achieve scale through which they can be more productive and efficient.
“Uber is a culture that went crazy — but also one that no one spent any time formalizing,” Prof. Gulati said. “Founders need to evolve their role to professionalize their organization.”
In the final session, Prof. Gulati talked about disruption on an individual level through happiness baselines, inner leadership, and self-awareness. “Leadership is as much of an inner journey as an outer one,” Prof. Gulati said. “How you frame your job defines who you are.”
Before wrapping up the workshop, Prof. Gulati told the participants that the goal for the day was to think of one actionable idea to take back with them to their organizations.
By the end of the day, the participants gained a new understanding of leadership and opportunities for their businesses, and for themselves, to advance to the next level.
This workshop is the first part of a three-day conference that will continue on August 7 and 8, 2017 with another world-class Harvard Business School professor, Richard Vietor. Professor Vietor will discuss a series of case discussions about ASEAN countries (such as Singapore), about countries that will directly impact our future (China, Saudi Arabia, and the U.S.), and about a country that holds lessons for several Asian countries (Colombia). And what he has to say about the Philippines as well, which is the subject of a new Harvard case study.
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About the author:
Marge Friginal-Sanchez is an editor and writer for John Clements Consultants, Inc. She was previously connected with Goodyear Philippines and the American Chamber of Commerce. Marge studied creative writing at Gotham Writers’ Workshop, New York, and is a Business Management graduate of Assumption College.