On December 14, 2017, we had a freewheeling discussion with a dozen leaders from the Vancouver business community. The topic: disruptions. Our participants represented a wide variety of industries, including automotive trade, commercial fisheries, high-tech marketing, real estate, financial services, and entertainment. We had three questions for them: In terms of disruptions, what are you seeing? What are you doing about it? What should Ivey do to prepare future leaders for disruption?
The impact of transportation disruptions
As our participants quickly made clear, you could focus an entire discussion on disruptions just within the transportation sector. Taxis are being displaced the world over by ride-hailing services, such as Uber and Lyft. Taxi drivers felt the pain first, but Uber drivers may well be next. Such disruption may be taken to a new level as driverless vehicles are being tested in the U.K., the U.S., and China, among others.
Meanwhile, on the automotive retailing side, disruption is also very much in the wind. Many millennials are choosing an urban, car-less lifestyle, preferring to save their money to buy a home, or spend it on vacations, personal development, and pastimes. The automakers are taking note, changing their longstanding relationships with their dealer networks.
One participant noted a shift in focus: “We’re moving from bricks and mortar to bricks and clicks.”
The traditional service department within your local dealership may go the way of the dinosaurs, as cars become both more complex and reliable.
The demand for transparency
Disruptions in the business-to-consumer sphere are already making their way in the business-to-business transportation sector. Amazon offers free overnight (or even same-day) delivery of packages, and truckers in the supply chain are expected to match that high level of service. And whereas the transportation sector of yesteryear could build good margins into its long-term contracts with customers, today the Internet compels truckers to be transparent. Eroding margins are the inevitable result.
Of course, transparency can also be a good thing. Several participants pointed to the rise of blockchain and cryptocurrencies as unmanipulated tools of tomorrow’s business world. Credit bureaus may well fade away as our individual credit ratings are verified by blockchain. You’ll go into a local convenience store and send $500 to a family member in Brazil, with bitcoin in the background. It’s instantaneous and, compared to Western Union and the banks, almost free.
“It’s a revolution against centralized authorities,” said one participant.
“This is what our kids are going to be living every day,” said another. “Their wallets will be connected to that world.”
Transparency can also make products better. A fish processor on the West Coast is working with Verizon to attach intelligent devices to its shipments almost, “From hook to plate,” as Verizon puts it, as it attempts to move into data tracking and asset management. Live, fresh, and frozen fish products all require special kinds of attention, such as temperature and care in handling. Assuming it works, retailers and customers (along with the producers and Verizon, of course) will reap the benefits.
According to our participants, artificial intelligence (AI) holds enormous potential for disruption. In fact, it has already made its way in the advertising sector (linking ads to the content of broadcast shows in real time) and in the wealth-management industry (where so-called robo-advisors are running portfolios for companies like Charles Schwab and The Vanguard Group). But these kinds of investments, for the most part, can only be made by the biggest players.
“The big guys can throw $40 million at an AI project and the little guys can’t,” said one participant.”
The inevitable result? Consolidation.
A new kind of leadership is needed
We asked our participants what all this change added up to, in terms of leadership. Specifically, what should a school like Ivey be teaching its students? Some of the answers were predictable:
- Teach them to be agile;
- Give them great analytical tools; and,
- Teach them the quick-sprint mindset.
But others were surprising:
- Teach them to pick their battles, and not respond to every single noise that’s out there;
- Hammer home that their companies will have to stop doing stuff that impedes their growth and agility;
- Caution them about the perils of chasing the shiny object;
- Teach them how to take a punch, and not be so thin-skinned; and,
- Help them understand that the kinds of rapid pivots they’re going to have to make as leaders will create the risk of disengagement. People won’t get it, which means they will have to be extraordinary, relentless communicators.
“In my business, we’ve had to go back to basics and double down, on things like fireside chats, one-on-ones, and so on,” said one participant.
And when it comes to hiring leaders, our participants mostly agreed that you should start unchecking the boxes on the leadership scorecard, especially if your company aims to disrupt. Great leaders today don’t fit into traditional profiles. Don’t dismiss the pushy candidate, the socially awkward candidate, or even the little bit crazy candidate.
“When I hire a CEO for a company, I look for somebody from outside the industry who’s disgruntled about that industry,” said one participant.
And last but not least, don’t forget about table manners. One participant said he learns an enormous amount about job applicants by taking them out for dinner and watching how they interact with people in that setting. He rarely likes what he sees.
“It’s appalling,” he said. “I know you can’t offer a course in table manners, but in the business world of tomorrow, the soft skills will be even more important.”