Lessons from Ranjay
by Grace Alcid
In this VUCA (volatile, uncertain, complex and ambiguous) world we live and work in, the likelihood of many organizations getting their businesses disrupted is much greater. So how can business leaders these days prepare their companies to survive at the very least or, better yet, become successful in this environment? Harvard Business School Prof. Ranjay Gulati offered a lot of insights into how leaders can develop the essential skills to survive in the disruptive business world in the recent workshop he conducted titled “Re-Imagining Leadership in The Age of Disruption”.
I have had the privilege of attending all the public workshops of Prof. Gulati conducted here in the Philippines. One might think that I have heard everything he has to say and teach. But with each seminar, I leave with new insights from the topic he discussed. This time was no different. In fact, I felt I had gotten many new insights and a lot of AHA moments. The discussion on how one should lead in disruptive times was of particular interest to me. I ended the day with so many pages of notes that I know I will be referring to in the future. But there were several key learnings for me that I will remember going forward. In fact during several points of the workshop, Prof. Gulati would ask the group what were one or two things that resonated with us from the previous discussion. Somehow being asked to do that imprinted them in me.
First and foremost, we need to understand what disruption is and why it happens. Based on the discussion during the workshop, people have different definitions of disruption and its occurrence. Disruption, in essence, is a disturbance that interrupts an event and a common understanding was the presence of technology precipitating it. But technology is only one disruptor. There is the aging population that has changed consumer needs, emerging markets where price and quality need to be balanced, rising demand for natural resources which creates massive opportunities and the growth of services offered by corporations. Technology is only one of many disruptive forces leaders have to consider in the current marketplace. Hence learning #1: Technology is not the sole disruptor of businesses but only one of several factors leaders need to be aware of.
Prof. Gulati then discussed how Netflix disrupted Blockbuster Video’s business of movie rentals. In the 1990s, Blockbuster was the place to go to if one wanted to rent the most recent blockbuster movie. Their blue-and-yellow stores proliferated in America’s cities. The company addressed the impulsive need of consumers to watch newly-released movies and maximized the number of days the movie was being rented, charging late fees if they were not returned on the due date. When the demand for the movie had waned, they would then sell them for a fraction of the cost of acquiring the movie title. But due to limited quantities and unreliability of returns, customers did not get the titles they wanted. At that time, though, they were the place to go for movie rentals and leadership perhaps thought it would remain that way.
Enter Netflix in the late 1990s. The founder, Reed Hastings, looked at this new format of copying movies — the DVD — and saw the opportunity to rent it out by mailing it to consumers who had recently purchased DVD players. Hastings saw that stores weren’t carrying a lot of DVD titles at that time and saw an underserved segment of movie enthusiasts, those not just looking for blockbuster titles but other types of movies as well. The company decided on a subscription model using a search engine to indicate the movies the subscriber would want to watch for succeeding mailings. Due to complaints coming from consumers about their late fees, the company decided to eliminate those fees. There were other issues as well such as late delivery, so the company turned to movie streaming which enabled its customers to have movies all the time for a monthly subscription price. This helped expand their market for those customers wanting to watch movies all the time. The company also incorporated recommendations from its clients that facilitated spreading the word about older movie titles that might not have been in the movie radar of its customers. Additionally, the company went into producing its own movies and series that further expanded it market base. Netflix became the go-to-place for people wanting to see a movie at home, eroding the dominance of Blockbuster.
Although there was technology involved, the success of Netflix emanated from understanding the pain points of consumers — not being able to get the titles they want, paying late fees and being able to see a movie without having to drive to a rental store. So lesson #2 for me was businesses need to truly understand its customers so that they can continue to offer them the services they value and willing to pay for.
Another topic Prof. Gulati discussed was how innovation has to be redefined so that the company investments in R&D can become more productive. In today’s challenging world, increased competition and commoditization of services offered have diminished returns on innovation. Companies need to re-assess where they will allocate their resources. Prof. Gulati suggested the following:
1. Keep core businesses healthy as long as possible.
2. Invest in new disruptive technologies while the core business is still healthy.
3. Focus on what is important.
Companies such as Kodak, Motorola, Nokia dominated their markets for a while but failed to adapt to the changing business landscape. Lesson #3 would be to not be complacent. You may be at the top now but there is always another company who is looking to bring you down.
The last topic Prof. Gulati discussed was how to build organizations that can grow and survive the ever-changing business landscape. He stressed how leaders need to understand how to lead during disruptive times. There are several attributes leaders should have: a growth mindset, being aware of decision blind spots, playing to win, being proactive instead of being complacent especially when they are on top, resilience and being able to manage oneself to understand one’s purpose in life. He also touched on how extremely difficult it was for start-up companies to achieve growth because founders do not know how to grow their business. They become the hindrance because of their inability to adapt to the changing needs of their organization. They need to evolve in their role and bring in professionals who can actually build and grow the business. Although they do not necessarily have to leave the company, these entrepreneurial leaders need to set aside their ego and accept the fact that their company does not have to revolve around them. Admitting there are others who can grow the company better than they could be the first step to scaling their company to newer heights.
Thus knowing oneself, my purpose, my strengths and shortcomings, will make me a better leader. I need to be able to understand the reasons behind my actions so I can manage myself and help me to do what I am supposed to do. Knowing myself will enable me to do the right thing for my company and myself and will help me be able to address the ever-changing environment that surrounds me. That was my biggest learning.
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ABOUT THE AUTHOR:
Grace Allas-Alcid has been involved in Learning and Development for the past ten years. She was the Director of Learning and Development for John Clements Consultants, Inc. [from June 2007 to June 2016. In 2016, Grace commenced her post graduate studies at Columbia University in New York City where she is expected to obtain a Master of Arts degree in Adult Learning and Leadership in May 2018. As Learning and Development Director, she designed and implemented developmental programs using Harvard Business Publishing Corporate Learning materials. She also facilitated and managed corporate learning programs for corporate clients in Manila, Jakarta and Singapore. Prior to moving back to Manila from the US, Grace was involved in discretionary investment management for individual, corporate and public clients in New York. Mrs. Alcid holds a Bachelor of Arts degree in Communication Research from the University of the Philippines in Diliman, Quezon City, Philippines and a Masters in Business Administration degree in Financial Management from Pace University in New York City. Grace is certified in The Art and Craft of Discussion Leadership from Harvard Business School as well as a certified facilitator and coach for the Zenger Folkman Extraordinary Leader program.
