Adaptive leadership is a style that encourages sharing, listening to suggestions, seeking out uncomfortable opinions and ideas. Sometimes, saying, "Tell me what you think I do not want to hear." With collective wisdom decision-making, the combined cognitive differences can uncover hidden problems and opportunities, leading to perspective-shifting conclusions.
In an environment of disruptive change, strategic planning as we know it is no longer workable. Accelerating change makes the future less knowable and impossible to plan for, which is why organizations must be flexible, resilient, and innovative.
Today's form of planning involves a process of progressive realization, the concept that knowledge, understanding, and perspectives are transient over time. Adaptive organizations are creating team-based business models designed to experiment, prototype, learn, and discover the future.
The book describes why adaptive leadership, vision, digital transformation and winning the talent war are strategic imperatives. Demanding attention, understanding, and action. They cannot be delegated; they must be led.
Get a set of management guidelines, concepts, and principles for succeeding amid disruptive change with the wisdom, lessons, and insights in this business guidebook.
Bob Shafto took over a failing computerization project at New England Mutual Life Insurance Company and transformed it into a leader in this area in subsequent decades. He has much to teach today's leaders about adapting to disruptive digital transformations.
Sloan Distinguished Professor of Management
MIT Sloan School of Management
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About the Author
earned a bachelor's degree in actuarial science from Drake University. He managed computer systems for Guarantee Mutual, was a senior-systems engineer at Electronic Data Systems Corp. He joined New England Mutual Life as vice president and chief information officer. After a series of promotions, Mr. Shafto was appointed to Chairman of the Board and Chief Executive Officer (CEO). Mr. Shafto has more than thirty-five years of computer systems development, project, and executive management experience.
Read an Excerpt
Confront Reality of Disruptive Change
The Status Quo Is an Illusion — Not Sustainable
If we could picture disruptive change by graphically displaying the speed (frequency) and the volatility (amplitude), we could appreciate the broad impact of the continually changing range of interrelated causes. We could see that both the speed and volatility are quickening. Today's environment has more disruptive change than at any time in history.
Technology will continue to get smaller, faster, more intelligent, networked, and integrated into everything. As the demographics and the customer requirements, tastes, and behaviors continue to change, so must the products and services that businesses offer.
Research shows that consumer behavior is changing. Many are moving to online retail, not getting married, not having as many children, downsizing their living space, cutting back on purchases, aggressively seeking deals, and preferring fresh and healthier food choices.
For example, for the millennials generation, seventy-three million strong, their primary source of news and information is the internet. They are highly educated and technologically connected and expect businesses to adjust to their needs. They communicate much differently than the earlier generations. The millennials will change the world more than any other generation.
Some businesses have become victims of disruptive change, while the fortunes of others have waxed and waned. Growth markets come and go. Everything has a shelf life.
In today's uncertain business environment, both the threats and the opportunities are accelerating. Albert Einstein said, "Our world is a product of our thinking; it cannot be changed without changing our thinking."
However, humans have been remarkably adaptive to change. We have learned to survive and prosper no matter what life, the environment, or technology throws at us. In our paradoxical world, organizations resist change with a powerful bias for the status quo. Many of us prefer consistency, keeping everything the same, a preference for the current and sticking with decisions made previously. The status quo is frequently used as a reference point for decision-making.
Behavioral science research has found that when faced with complicated issues, we have a mental shortcut that allows us to decide quickly and efficiently, where our current emotions of fear, pleasure, and surprise influence our decisions. In other words, emotions play a leading role when we face multifaceted judgments.
Our emotions rate more involved decisions on a bipolar scale that is good or bad, suggesting that we base many of our judgments not only on what we think about the decision but how we feel about it.
Understanding the heuristic effect, the mental shortcut that allows people to make judgments when dealing with complex problems is central to creating an adaptive organization.
The executive leadership must thoughtfully frame the communications based on how people think and instinctively decide. Clearly articulating the reality of the situation and the choices that influenced the decisions. Employees need to hear an exciting vision of growth and opportunity — a unique, genuine, compelling, and believable story. A story about innovative products and services created by cross-functional project teams. A strategic vision where employees can learn, develop, contribute, and bring value to the organization.
Disruptive change from developments in technology and changing demographics will create new challenges and new opportunities at every turn. The impact of disruptive change will require an organization to think differently and rethink everything.CHAPTER 2
Adaptive Leadership — Followers
Collective Wisdom — Progressive Realization
Organizations fail when the leadership's focus is on the status quo, the current operational effectiveness and efficiencies, the shareholders' reaction to quarterly earnings, and the traditional top-down strategic planning, control, and decision-making processes. Disruptive change has undermined the effectiveness of conventional strategic planning.
Failure comes from the following:
not future-proofing the organization
not creating a resilient business model
not offering a strategic vision for the horizon
* disruptive change
* digital transformation
not focusing on talent management and employee satisfaction
thinking they have all the answers
* not realizing that the future is discovered through prototyping and experimentation
not building mutually beneficial business partnerships
not investing in intangible assets
Strategic decision-making is about choices. The CEO and the leadership team are responsible for setting the organization's direction. In the shadows of doubt and uncertainty, they must find solutions for the impacts of disruptive change, digital transformation, and cybersecurity. So, how can you plan an organizational direction when you cannot predict the outcome of your choices? The answers are adaptive leadership, collective wisdom, an adaptive business model, and a process of experimentation, learning, and discovering.
Today's form of planning involves a process of progressive realization, the concept that knowledge, understanding, and perspectives are transient over time. Progressive realization uses a network of cross-functional teams to design and create alternatives, then test, measure, learn, rethink, and restart.
Adaptive leadership is a style where the CEO encourages sharing, the expression of ideas, and an active participatory role in decision-making. The management team should have unfettered discussions, ask questions, listen, have open dialogues and vigorous debates, challenge assumptions, and think long-term.
The team should avoid underestimating the threats or missed opportunities by narrowly framing the discussions. They should rethink the organization's strengths, weaknesses, and competitive positions. They should be innovative and consider a wide variety of options, then apply their collective wisdom to the risks and opportunities of the choices.
The CEO should consider introducing diverse ways of thinking and different reference points about the choices by adding a chief talent officer, a chief customer officer, and a chief artificial intelligence officer to the leadership team.
With collective wisdom decision-making, the leadership team's combined cognitive differences can create unique permutations and produce new innovative solutions. However, the most important advantage is the management team's shared understanding and a shared commitment to implement the decisions.
How you communicate both the problems of disruptive change and your solutions to the organization matters. The words that you use matter. Framing the decision as an opportunity will create more divergent thinking, more openness to the choices, more creativity, and more adaptive responses.
Today, talent management and employee engagement are essential activities. Introducing a newsletter about "The Adaptive Journey" can help employees better understand the decision-making process, the options considered, the choices, and the future opportunities they offer. A new strategic vision statement will then guide the enterprise's future technologies, innovations, team-based structures, and talent management programs.
The Adaptive Leadership Dilemma — Being Tri-Modal
First, managing disruptive change is not traditional change management. Unlike a reorganization, an acquisition, a new IT project, entering a new market, or offering a new product, with disruptive change, adaptive leaders cannot disseminate a detailed plan to guide the organization through the changes before they start. Managing adaptive change involves recomposing a known solution to the new situation or developing an effective response to the changing circumstances.
Also, adaptive leaders must be agents of disruptive change. Through the constant process of learning, creativity, and innovation, they must proactively seek new approaches, new products, new services, and new ideas. Moreover, adaptive leaders have the responsibility of successfully overseeing the ongoing day-to-day tasks of the organization.
The Adaptive Leader's Perception Engine — Outcomes
The CEO and the leadership team each have their unique backgrounds, perspectives, opinions, cognitive biases, and assumptions. Our perceptions, filtered by our natural competencies, are how we receive and translate our experiences. Our perception engine defines how we feel, think, and act.
The adaptive leader's perception engine is the mind's eye, questioning by nature, continuously analyzing, searching for verbs, and looking for patterns. It identifies the essential components in the unfolding circumstances and evaluates the critical adjustments for performance in the newly evolving environment.
Components of an adaptive leader's perception engine include a tolerance for ambiguity, excepting mistakes within reason, the ability to work with unknowns and the unpredictable, a willingness to give up control to get results, and the skills to find the vital few out of the trivial many.
In today's businesses, the ongoing challenges of disruptive change, long-term growth, and survival require an adaptive organization — one with the capability to adjust to continuously changing situations and circumstances.
Ross Perot, at Electronic Data Systems, would ask new employees, "What is your definition of leadership?" After listening to various explanations, he would say, "The definition of leadership is: they have followers. The question is, Why do they follow?" Again, the new employees had a variety of perspectives about why leaders have followers. Ross would then define the relationship as need based. A successful leader offers perspectives, knowledge, skills, and abilities the followers need. Leaders are persistent, decisive, innovative, and adaptive. They ask questions, listen, and respond. They are visionaries who communicate a clear organizational direction, ralling support, and motivating followers.
Adaptive leadership is not for the fainthearted.CHAPTER 3
Shared Strategic Vision
A Great Place to Work
Creating an Adaptive Corporate Culture
The CEO and the management team are responsible for the analysis of problematic situations that could challenge the organization's long-term growth and survival.
Disruptive change requires rethinking the organizational emphasis on the short-term competitive advantage, market share, and quarterly earnings. It is ideal to focus instead on long-term sustainability by fully embracing strategies of adaptability, technology, and talent management.
The CEO and the leadership team should create a strategic vision of core beliefs and shared values that describe the corporate culture and guide the enterprise's future decisions.
The process should begin by asking and answering a series of questions:
What are we good at?
What do we want to become?
What do we believe in?
What do we intend to achieve?
What talents do we need?
Why work for us?
As an internal communications document, the strategic vision statement gives the organization a perspective on the path forward and offers a sense of purpose beyond profit maximization.
As part of an employer-branding campaign, the strategic vision statement describes how the organization's culture is different from other competitive employers and why prospective candidates would want to work there. A shared strategic vision with high standards of excellence and a theme of creativity, innovation, learning, and opportunity would engage and inspire both current employees and future candidates.
The new vision statement should describe the organization's strategic goals, such as becoming an adaptive enterprise by winning the talent war.
We are building the means to adapt to an ever-changing world.
We are transparent and share information openly.
We tolerate ambiguity.
We are not afraid to change.
We are willing to test new ideas.
We embrace and celebrate the diversity of minds.
We actively support our community.
We look for, hire, and help develop talented people.
We build leaders from within.
We thoroughly debate strategy and trust others to execute the tactics.
We are committed to continual improvement.
Together, our business partners and talented employee teams collaborate, solve problems, and satisfy customer requirements.
We will win by exploring avenues of learning, innovation, flexibility, technology, and talent.
An optimistic and positive strategic vision will set a new and exciting organizational direction. It will take away much of the ambivalence and uncertainty that is associated with today's environment. It will differentiate the organization by creating the ability to adjust to constantly changing circumstances and conditions. It will build an architectural symmetry of leadership, vision, technology, and talent in a culture that is prepared for whatever the future brings
The Power of a Shared Strategic Vision
The vision statement is the organization's compass. If well designed, well communicated, well understood, and broadly accepted by the organization, when faced with decisions, all you need to ask is "Does this decision move us in the right direction?" It is like sailing; you know where you want to go, but with the continually shifting wind, tides, water depth, and various hazards, you cannot sail in a straight line. You must tack, continually adapting and resetting your course. Sailing a five-degree wind shift for one minute can lose or gain your organization three boat lengths. As the winds shift, a shared strategic vision can put the enterprise on the lifted or winning tact.
Organizations without a shared vision will get battered by disruptive change and may lose their sense of direction.CHAPTER 4
Teams, Projects, Project Management, and Facilitation
The Wisdom of Teams
Work Groups versus Teams
Functional work groups are traditional work units or departmental groups with a supervisor who plays an active role, assigns work, answers questions, and measures individual performance. Functional workgroup activities are more repetitive and have a focus on internal or external customer satisfaction. Teams, on the other hand, are both individually and mutually accountable for the team's results; they share information and perspectives, focus on team goals, and aim for a collective work product.
Diversity of Minds over Ability
Business is increasingly becoming an environment where teams work collaboratively. Teams with diverse perspectives, personality traits, talents, backgrounds, and interests are better at innovation, creativity, problem-solving, and decision-making than capable individuals alone or teams with cognitive bias.
With greater diversity will come collective wisdom, task-relevant information, and an array of borrowed perceptions.
Teams do the following:
view the problem from different angles
perceive adjacent possibilities
offer ideas in the neighborhood
introduce information, knowledge, and wisdom
propose fresh new solutions
By thinking differently, the whole becomes more significant than the sum of its parts, and outcomes are enhanced.
Assembling Unconventional Teams
Building a project team is about both diversity and ability. Actively seek generalists and specialists as well as people with different experiences, educational and functional backgrounds, cognitive depth, age, and personality traits.
Without a diversity of minds and backgrounds, the project team can become lopsided with cognitive bias. It will be less creative and have fewer innovative ideas.
Assembling an effective project team is not about assigning human resources; it is about the autonomy of thought.
The NeuroColor personality assessments can help an organization assemble diverse project teams that think differently from multifaceted angles.
Team-Based Organizational Structures
Until recently corporate-level strategic planning activities drove strategic business unit (SBU) objectives and in turn directed functional department action plans. These first principles of management, along with the associated skills and abilities, are changing.(Continues…)
Excerpted from "How to Manage Disruptive Change"
Copyright © 2018 Managing Disruptive Change LLC..
Excerpted by permission of Archway Publishing.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.
Table of Contents
1 Confront Reality of Disruptive Change, 1,
2 Adaptive Leadership — Followers, 5,
3 Shared Strategic Vision, 12,
4 Teams, Projects, Project Management, and Facilitation, 16,
5 Invest in Intangible Assets, 25,
6 Experimentation, Prototyping, and Discovery, 30,
7 Winning the Talent War, 35,
8 Digital Transformation, 54,
9 Virtual Organizations, 83,
10 Fifth-Generation Wireless Networks, 87,
11 Cybersecurity, 93,
About the Author, 135,