- Bansal, Morse, Vandenbosch, and Seijts
- Nov 5, 2018
Back in January, we conducted a freewheeling discussion with a dozen leaders from the Calgary business community. The topic was “disruptions,” as defined by our participants. As a group, we considered three questions: what kinds of disruptions are you seeing? What are you doing about them? What should Ivey do to prepare future leaders for disruption? The discussion was lively, and—as we heard it—unfinished. So we went back to Calgary for a second round In April. This round’s participants included government economic-development officials; a financial backer of First Nations of Alberta enterprises; an entrepreneur, an executive, and an accountant from the energy sector; a commercial real estate developer; several consultants with a strategy focus; and a banker.
Energy sector meets disruption
Not surprisingly, the energy sector got on the table early. One point of consensus that emerged was that—under pressure from environmentalists and regulators—executives in that sector now have to be social leaders, as well as business leaders. “The historic relationships between government and business in the community have changed dramatically,” said one participant. “At the same time, the governance roles have changed so much that no one really knows how to move things forward anymore.”
The on-again, off-again fate of proposed pipeline expansions was cited as an obvious case in point. There are a hundred ways to say “no” to something, as one person at the table put it, so it’s much harder to achieve consensus and much easier to stop things. The growing lack of trust in almost all institutions compounds the problem. “But,” she observed, “something needs to change, because no outcome is not necessarily a good outcome.”
One participant with extensive overseas experience broadened the point, observing that whereas business in the Western democracies traditionally involved one of two approaches—either self-contained and isolationist, or dictating terms to the Third World—today’s global exchanges are dramatically different. “Now,” he said, “people from around the world are influencing our decisions, and we’re not really used to that.”
Uncertainty—not know what is coming next, but knowing it’s likely to come fast—is a quiet but all-pervasive disruptor, both on the corporate and the individual level. If you have no idea what the price of a barrel of oil will be in five years, you’re unlikely to invest a billion dollars in oil and gas infrastructure. If you’re unsure whether the economy will need ten or ten thousand mechanical engineers in five years, you’re unlikely to make a large personal investment in pursuing an engineering degree.
The move towards open concepts
Picking up on the general topic of young people and their career choices, one representative from the real estate sector talked about the difficulties—and rewards—of creating spaces that appeal to the millennials that his tenants need to recruit and retain. Young people today are looking for “open concepts,” he explained, both in terms of physical space and working relationships. They are eager to compete on the world stage, and fear that if they don’t get experience collaborating in their own workplace, they’re unlikely to be leaders on the world stage.
“So anything we can do to facilitate that,” he continued, “whether it’s the beer tap at four o’clock up on the top floor, or the guest speaker series downstairs in one of the communal lounges—our tenants need and demand that. And that list of amenities is huge, and growing.”
Several around the table once again brought this issue home to the energy sector. How does an industry that’s perceived to be the definition of “old fashioned” appeal to the young people who want to “work for Google and have dinner served to them at their desks”? Yet not playing this game, as one participant pointed out, is not an option. As the Baby Boomers leave the job market in large numbers, companies have no choice but to recast themselves to recruit younger employees. And these are not necessarily superficial changes, one participant noted: “Part of making ourselves interesting is to move faster. Well, how do we do that?”
The impact of technological disruption
Moving faster prompted discussion of technological disruption—both what’s real, and what isn’t. One participant predicted that self-driving cars would be a reality within five years, or at the most a decade, but that a massive shift away from fossil fuels was unlikely in the foreseeable future. “I’ll give you one example,” he said. “The Tesla Powerwall costs $10,000, and it stores as much energy as one quart of diesel fuel. Does anybody really think that’s ever going to be economic?”
The future of banks and banking served as the subject of some debate, around the table. One banker said that the notion of banks acting as intermediaries between those who have capital and those who need to access it is increasingly archaic. How will companies get money in the future?
“Oh, gosh,” he said. “Think about how people get hotel rooms today. There will be some platform that will give people access to people who have money, and they will interface with them directly.”
One consultant disagreed, citing cybersecurity issues. “I think there may actually be a return to the old ways,” she said, “because only banks have the money to invest in security. Sure, there are new models out there, but people are feeling very vulnerable about how those models are working.”
How can business schools adapt and thrive?
Universities came in for some rough handling during the discussion. Overpriced, high embedded costs, inflexible, slow-moving: these were some of the words used to describe the modern university. These are exactly the same characteristics, participants noted, evidenced by many industries now going through painful disruptions.
In that context, what should business schools be doing, or be doing differently? “Looking forward,” one participant said, “what you should be teaching people at business school is how to facilitate—assembling and integrating the team, and then getting the most out of those team members.” This process is complicated—she continued—by the paradoxical need to listen hard to what those team members are telling you, and at the same time, protect your vision from the people who will put obstacles in your way.
Others at the table agreed—and suggested that these will be critical skills in the turbulent business environment of the future. “And to get there,” said one participant, “we’re going to have to figure out how to quantify these skills—to get people focused on them, and stop calling them ‘soft skills,’ because a lot of business leaders tend to dismiss ‘soft’ stuff.”
Several participants suggested that business schools spend more time teaching students how to extract “nuggets” from the ever-increasing flow of data in the workplace. One went a step further, arguing that schools should teach students how to make data “real” to people: “You need to be able to convey the story of the data, and thereby to put the person into that data.”
Disruptions, by definition, are about change. “To manage through those kinds of changes,” one participant observed toward the end of our discussion, “we’re going to need the people in our organizations to behave differently—and the only way that’s going to happen is if we’re both empathetic about the changes they’re going through, and also very direct about the things that they’re going to have to do differently.”
“Yes,” another participant agreed. “Teach your students to be tactfully direct.”