So who’s afraid of disruption?

Imagine a scenario where technology and customer expectation shift at lightning speed.

One exceptionally hung over morning in office, I recall a meeting which ended as follows: “Breaking through the clutter, with an aim to leverage empowerment we must align ourselves to the clear goal of disruptive innovation in view of the new normal that generation X”. The sheer number of buzzwords made me giddy.

Buzzwords. Consultants and corporate India love them. That is, until the complexity and situationally shifting singularity supersedes the ability of the said buzzwords to make sense. Then we get bored and adopt new buzzwords.

Board meetings, traditionally used to mundane topics like interest rates, raw material costs, sales forecasts and marketing spends are waking up to an existential threat, and the latest buzzword on the block. Disruption. To elaborate, the threat of “disruption” via shifts in technology and customer expectations.

Logically, it is possible to infer that today’s large corporates, with their deep pockets, industry leadership, ability to attract talent, brand value and a steadily growing and recurring stream of profit would be well poised to capture future market share in their respective industries. Many still believe that disruption is a passing fad. Hype created by VC dollars which must surely normalise over time.

But start a dialogue with those impacted by a strategic miscalculation of the sheer pace of technological advancement or customer expectation shift; they might disagree. Be it Nokia, Kodak or certain soon-to-be-defunct PSU banks unable to match the service and technology adoption of leaner, meaner players in the market. Over the past decade, we’ve seen some new entrants like Ola, AirBnB, Zomato and Oyo which are turning traditional sectors on their head and shaking out every ounce of efficiency while systematically cutting out the middle layers of fat. All this and more has led to visible disruptions in news, retail, commerce, banking, airline booking, music and television content. And now, we can enjoy a front seat view to the active battle being fought by auto, pharma and healthcare giants.

So where does culture come in? And what is company culture? Let’s be clear — it’s not the bonding activities that those of us with an enthusiastic HR team try to avoid (usually called something super creative like, “Fun Friday”). Nor is it the pastries with tea at 5:30 pm. Ben Horowitz defines it as the “collective behaviour of an organisation” and goes on to clarify that unless you set it, it’ll stay as it is.

Traditional corporate management hierarchies were created in an era where the pace of change was far slower than today. With slower change, senior managers had risen through the ranks and at their peak possessed roughly the same expertise to react to technology shifts and customer expectations as a fresher or parallel entry middle manager. Moreover, their experience gave them an edge in decision-making. Meetings in these companies usually went something like this: Senior manager walks in on a meeting and gives his view, everyone else aligns to the said view and the facts are created to support decision-making. Now imagine a scenario where technology and customer expectation shift at lightning speed. The youngest or savviest link in your chain suddenly becomes super valuable. But if decision-making and meetings are conducted in roughly the same way as they were in 1860, we have a problem.

The gap between the customer and the corporate will widen, the knowledge-bearer will move on to another firm and sooner or later, a new entrant with none of the legacy cultural issues will creep up from behind and cause the end of the old guard.

Now, don’t get me wrong. Decision-making is rightfully the domain of those with experience, but inputs on rapid changes need to be taken from employees on the ground and more so, from customers. Unless this is addressed, no amount of investment or self-realisation will be enough to ride the wave of disruption that companies face — and beneath the crest of the wave is a steep fall into the maelstrom.

So the next time it seems irrational to see a large, established company, with an understanding of this threat and a willingness to invest to prevent it, buckle like a house of cards — just remember, to the customer, it is totally rational to move to the future than staying with the past. And the customer pays the bills. Not technology, or the politicians with their regulations, not the share-holders, mired in tradition, or the employees, bogged down in self-promoting inertia. It is culture that will kill the corporates of yesteryear.