How Rapid Disruption is Changing the Future of Leadership

The rate of disruption in business today is faster than ever before. Various theories exist about what is driving this rapid disruption, however, I believe it can summarized by the consonance of three key trends: technological innovation, rapid urbanization, and the growth of an educated, global workforce.

Technology is the most significant of the three driving forces. At the recent Kellogg on Growth Conference, Marcus Shingles, CEO of XPRIZE, explained that technological disruption extends far beyond Moore’s Law. The number of different technologies that are now approaching the inflection point of their respective development curves is unprecedented. Additive manufacturing (a.k.a. 3D printing), augmented reality (AR), virtual reality (VR), and blockchain are just a few examples of the technologies set to disrupt just about every corner of the economy.

One of most salient data points used to substantiate the claim of unparalleled disruption is the decreasing average lifespan of companies on the S&P500. According to a recent Credit Suisse study, the average lifespan has decreased from nearly 60 years in 1958 to less than 20 in 2012.   

What is often not discussed­, and what I find most interesting about rapid disruption, is the profound impact this is having on leadership. Resilience and/or adaptability has emerged as one of the most, if not the most, critical components of leadership. Leadership is no longer only about delivering on a known value stream because the very essence of what a known value stream is, is constantly shifting.

While adaptability has always been an important aspect of leadership, the notion of what it means to be an adaptable leader has evolved. It means being comfortable with failure and, even at times, organizing for it. It means thriving in unstructured and unfamiliar situations. It means having a predisposition to flourish in consistently ambiguous environments.  

This idea, that executives need to have an inherent ability to adapt boldly, continues to pop up across a variety of disciplines and there are many names for it. One of the most common terms is grit. Goldman Sach’s refers to it as ranginess – an individual’s ability to take on new and diverse challenges. It's what social psychologist Carol Dweck calls a growth mindset – the belief that talents and capabilities can be learned (see TED Talk). Shoma Chatterjee of ghSMART describes it as drive quotient (DQ), an extension to the now commonplace IQ and EQ assessments. Even Brené Brown’s research on vulnerability (see TED Talk) is applicable here as adaptability requires leaders to embrace their own ignorance and be vulnerable to the failures they will undoubtedly experience.  

The thing about rapid disruption is that it’s really hard to see it coming. Most technologies develop along a growth curve that is more exponential than linear (i.e. Moore’s Law). What this means is that if a technology takes 10 years from first discovery to reach market readiness, it closes the last 50% of the development gap in year 10. For leaders, successfully preparing for these disruptive forces means anticipating changes and making bets prior to year 10. Adapting to failed investments, changing course and being comfortable making calls without all the information is critical.                  

Grit, like a foreign language, is more difficult to learn as an adult than as a child. The more life experience we have, the more we develop norms and behaviors we are comfortable with and, thus, are hard to break. To really assess this leadership quality, some companies have started digging deeper into executives’ early life experiences during the C-suite interview process. By probing at the types of adversity an individual faced as an adolescent and how he or she dealt with it, firms can get a good sense about a potential leader’s propensity to adapt.  

While it is difficult to proactively change the level of adversity one has faced during their formative years (nor do I encourage manufacturing adolescent adversity in the name of developing adaptability), we can encourage young people to actively seek out experiences that exercise this muscle. Living, studying or working in an emerging market is one way to do this and something I encourage. Other ways include taking a job that is less well-defined than you might be used to or consciously joining a team comprised of people with whom you don’t have a lot in common.

In conclusion, the rapid rate of disruption today requires a rebalancing of leadership qualities toward a more sophisticated notion of what it means to be adaptable. Those aspiring to grow as future leaders should intentionally seek unfamiliar and uncomfortable environments, consciously aware that these are the spaces where grit is naturally developed.