In this episode of Future Forecast, Isabelle Ringnes meets the charismatic Costas Markides, who has spent several decades studying business strategy and innovation. He is a professor at the London Business School and holds the Robert P. Bauman Chair of Strategic Leadership. Leaders from all over the world seek his advice about what to do next during challenging times.
According to Markides leaders have three top priorities to solve:
- Disruption – this is on top of the agenda
- Leadership style – how to change as a leader to manage people
- Culture – to support employees globally through all kinds of disruption
Disruption at Work
Markides explains what ‘disruption’ really means, and that it can be many things. Business leaders need to look at what the disruptions are for them.
The solution will lie within the problem and will break the disruption; he calls this “disrupting the disruptors.”
READ MORE: Preparing Your Company for Change with Costas Markides
Unfortunately, leaders often address issues when it is too late, says Markides. As a result they go into crisis mode, which brings them to hasty and bad decision-making that often only works in the short term. Markides urges leaders to look out for change early and gain clarity when the business is profitable.
Nip It in the Bud
Markides explains his research through case studies to show how certain companies have dealt with disruptions.
The Swiss watchmaker, Swatch, faced disruptions with the rise of cheap watches. Swatch responded with an affordable good working watch that came in a variety of colors. It became a fashion item, and consumers would buy several in different colors. The disruption was broken; Swatch had a unique offering that combined watches with fashion.
Introducing a lower cost range is not necessarily needed, and this depends on the brand’s purpose. For example, luxury brand, Louis Vuitton, is not only selling handbags, it is selling dreams. It is this dream that the customers want to buy into when they buy Louis Vuitton.
Markides highlights that entire industries can be disrupted by an external factor, for example, technological innovation. Looking back at the time when news became readily available online, the newspapers and magazines had to adapt, but their revenue streams were set to be hampered.
Markides highlights that different approaches were adopted to break the disruption. He points to the following examples:
- The New York Times - provides a certain amount of free content and paid options thereafter
- The Guardian - all its content is free with a donation option at the end of each article
Its philosophy: give people free knowledge and people can donate to help its cause. It is an ambassador to the reader, and the reader pays for a purpose
Markides advises that businesses should know their purpose and create an emotional connection with their customers.
A Real Purpose
He explains that companies need to find their own purpose to create meaning that people; internally and externally can buy into.
A company will not get buy-in with empty words and promises.
Many businesses will decorate its walls with a list of values that people do not follow, says Markides. He links this to raising children; parents will not hang a poster with home values in children’s bedrooms to gain respect.
He advises that you cannot impose values, but you can ask employees to buy into a purpose. People will fight for a purpose, because someone took the time to sell it to them with emotional commitment.
Connecting to a purpose needs passion, but Markides advises that a passion is not something that can be found. Instead, he urges for professionals to explore something they like.
“Develop your passion, this is an ongoing task."
- Costas Markides
Coaching vs. Bossing
Leaders should be aware that their roles have changed; they are no longer bosses, but rather coaches. They are not army generals but architects to create an environment that can get the best out of its people, so a leader must:
- Acknowledge that management has changed – different generations have different expectations
- Put continuous retraining and re-skilling in place – key in this fast changing world
- Treat people the way you want to be treated - to handle difficult situations
There will be a transition period, and people will still have the urge to simply tell, but a transition needs time. Cultural and gender differences come into the mix too. However, the young generation is much less hierarchical, so coaching will be more natural.
To conclude, Markides highlights that whatever the disruption or the change, the real company purpose needs to be understood and people need to be managed with respect. The internal customer is a vital piece of the puzzle to enchant the paying customer.
- Costas Markides“We have to find a way of selling things –internally and externally- at an emotional level.”
Text by Rosanna Bueler