Whether it is Rita Gunther McGrath of Columbia Business School telling us that we have entered a new “transient advantage” era, Joseph Badaracco of Harvard calling it a new “Schumpeterian” recombinant economy, or Scott Anthony of Innosight (Clayton Christensen’s consultancy arm) terming it the “great disruption,” few expect the old assumptions and formulas that brought success in the past to continue to be effective in the coming decades.
Richard Dobbs, James Manyika and Jonathan Woetzel of McKinsey have just published a new book called No Ordinary Disruption (New York: Public Affairs, 2015) in which they have identified "the four global forces breaking all the trends." The four are (1) the shifting focus of economic activity and dynamism to emerging markets like China and India, and, more particularly, to about 400-500 cities within those markets, in what they call a "new age of urbanization"; (2) the acceleration in the scope, scale, and economic impact of technology, where the effects of ongoing, rapid advances in processing power and connectivity are being amplified by the big data revolution, the mobile Internet and the "proliferation of new technology-enabled business models;" (3) global demographics and the aging of the human population, where more than 60% of the world's people already live in countries with fertility rates that have fallen below replacement rates; and (4) ever-increasing global economic interconnectedness and the expansion in the flows of capital, people and information associated with it, where "south-south" flows between emerging markets have doubled their share of global trade over the last ten years. Taken together, these four shifts are producing "monumental change."
To take just three examples of how rapidly and radically the world as we have known it up to recently is being transformed, in December 2014 "Cyber Monday" generated $2.65B in online shopping, but just a few weeks earlier on November 11th, China's "Singles Day," Alibaba recorded the world's highest ever single day e-commerce trading total of $9.3B; earlier, in February 2014, Facebook acquired a 5-year old start-up for an amazing $19.3B, and in September 2014, the Indian Space Research Organization successfully put a spacecraft into orbit around Mars, and for a total cost of only $74M, less than it took to produce the award-winning film, Gravity.
The big implication from No Ordinary Disruption is that all CEOs and corporate strategists will have to learn to "reset" the intuitions that up to now have been guiding their perceptions about future opportunities and challenges. "We have to rethink the assumptions that drive our decisions on such crucial issues as consumption, resources, labour, capital and competition." According to the McKinsey authors, the era we have already entered is full of promise, but also more volatile and "deeply unsettling," and for business leaders, the intellectual integrity to be willing and able to see the world as it really is, and the humility and persistence to keep learning, have never been more needed. The recent past is no longer a reliable guide to even the next five to ten years, and imagination, not just experience, is now at a premium.
Organisations, if they are going to thrive in this new environment will need to be able to engage their people as never before, their creativity and commitment as well as their professional expertise. The primary goal of corporate leadership must be to empower others to lead, rather than be content to just inspire others to follow. According to Bill George, former CEO of Medtronic, and professor at Harvard Business School, what will be needed is a new kind of more "authentic" leader, capable of generating a high level of trust in both their competence and their character. For psychologist Fred Kiel in his new book Return on Character, values-driven CEOs can be shown to create up to five times more wealth for all of their stakeholders than "self-focused" CEOs, and his defining principles of character development are integrity, responsibility, forgiveness and compassion, principles of the "heart" as well as the "head."
As the qualification of choice for aspiring CEOs, the modern MBA must be able to reflect these new priorities. Traditionally strong on developing the analytical skills needed to lead businesses successfully, today's MBA experience must also be designed to help leaders to develop a deeper self-awareness and greater understanding of these "character" values and why they matter, not only to be successful in leading today's organisations, but also in leading better integrated, and more satisfying, professional and personal lives. This is why at DCU Business School, we look at the Executive MBA process increasingly as a journey of personal transformation rather than just the acquisition of a highly valued credential with some new tools and skills.