Disrupting your business with Charlene Li

Disrupting your business with Charlene Li


I think process is extremely important;
process, organization, governance; because unless you know how everybody’s going to
work together you focus on just finding out where everybody is or how to get
things done, instead of spending your energy on the important things you have
to change; I think the most important thing for a disruptive strategy, your
strategy has to be focused on the future on who your future customers are, that you’re going to serve, so I do you have a clear idea of who that customer is, can you
articulate it back to your team and create alignment around your team that
this is who you’re trying to serve And the people who are able to transform
and move into the digital space as leaders understand the need for this
constant, a different type of leadership; one that is, they put themselves much
more forward, they’re constantly sharing, they want to connect, those are people who
want to connect, these leaders want to connect with the people they’re leading
on a much more constant basis, they understand the importance of sharing,
they fundamentally think about leadership in a very different way!
Welcome everybody, I’m so happy to be able to welcome Charlene Li to this
week’s edition of the Loop Email podcast. I’ve just been explaining Charlene and
her CV is so, so great, that I’m really honored to be able to say a big hello!
Very quickly I understand you live in San Francisco you’re a Harvard graduate 20 years of experience, you’ve been, you’ve set up a company, you’ve been a
senior fellow, you work for Forrester Research, a very well-known analyst
company, you’ve wrote six books, you are a New York Times bestselling author and you’re
just coming out with the latest book The disruption mindset: Why some businesses
transform why others fail, is that about That’s a good summary yeah; I think
you got it all, nice job! So we will talk today about,
we will talk about disruption and and really you know, disruption and
change, that’s my leading question, you know; What do you think has really
changed in the last twenty years? Is the fundamentals of change changed? Or
is the pace of change what is changed? So how quickly we are
changing and how profoundly are we changing; What is the big difference
between twenty years ago? Yeah, there are two major changes.
First of all the pace of change is much faster, we know that the average lifetime
of a company on the SMP500 for example, is shrinking, it’s about half of what it was
just twenty years ago. The other thing is that technology now makes it so that
change can happen a lot faster because you can understand what customers are
doing differently and then you can also see within your organization how change
is or isn’t happening. So the communications inside of organizations
is much faster now because we have these tools that allow information and
decision-making to flow up and down in an organization much faster than it
could in the past. So not only is the requirement the need for change
increasing because customers are changing so quickly but also
organizations themselves are capable of changing out of actually destructing
themselves; where 20 years ago there was no chance they could move as fast as
their customers. And tell me, you know, we’ve been in this world of management
and process and compliance and you know it’s been a mainstream topic and it
still is in some cases; How do you see change in process, in the mindset and
process more specifically; So, what’s the role of process in the
modern business? I think process is extremely important, process, organization,
governance; because unless you know how everybody’s going to work together,
you’re focused on just finding out where everybody is, on how to get things done,
instead of spending your energy on the important things you have to change.
What I found in my research is, that the most disruptive organizations are
actually highly organized, have very strong process, because that allows them
to have this foundation, the scaffolding – to be able to then take really big and
huge risks. They didn’t have to worry about can I do this or not,
everybody’s very clear on what everyone else is doing and so they actually can
focus all of their energy on the disruption rather than trying to figure
out what the process would be! I know, your book
that is coming out, is going to probably talk about it; but how do you
sort of; is there a difference between disruption and big versus small or
Europe versus the US, or you know a very sort of high-tech versus non high-tech,
traditional. Where do you see sort of that meddling; So Europe is very much SMB, Europe is very much traditional, Europe is very much; you know
process in definition, mindset, change, culture; it’s coming there but
we’re lacking; I think in many senses; Sometimes the most modern development;
Where do you see that movement happening? First of all I would say that
disruption is not an absolute, it’s not yes or no, it’s not on or off, it’s
actually a continuum; so if I were to put Europe anywhere on the continuum is
actually not that bad and in fact many of my case studies come from Europe and
what I find interestingly is that, there may be just as many companies and
organizations in Europe that are highly disruptive in terms of; for example ING
Bank; it’s a bank in the Netherlands; blew up everything in their headquarters
and went completely agile and I can’t think of another bank at doing something
as radical now they’re doing it in all the other countries that they’re in.
Whereas in the US we find a lot of lag recoveries, so I look at, I did some
surveys of leaders across different countries; US and UK were about six, on a
scale of one to ten in terms of disruption Germany was a little bit higher like it’s 6.5 and then Brazil and China were
like eight, nine; so there’s something in the water in Brazil in particular;
there are a lot of people who consider themselves disruptive and try to change; similar with China; so I would say that this is less to do with a
general sense of what is possible and more individualized that we see
exceptions to the rule across the board; so just because you’re in a particular
region or just because you’re in a particular industry doesn’t mean that
you can’t be disrupted. You could be a four but if everybody else in the
industry is like a two or three you’re doing great or you could be an eight on
a scale of one to ten but if everybody else is a nine or ten you’re a laggard;
so I think it’s very relative to where you’re standing. What about the small team
too big; so small companies versus big companies
there is a lot of sort of you know the traditional Central European companies
actually are smaller companies, so it’s not the BMW is not a big bank, but there
are sort of numerous niche oriented, very successful global companies that have highly well defined niche that they work with and and you know; How does the disruption happen in those kind of small companies? I think again,
the differences in small and large companies are two things; first of all there’s more
complexity, more people and the more established you are the harder it is to
break out of that status quo; if you’re going along a path, no matter how, what
your size is, it’s really hard to move off of that path; even the disruptive
companies, they may be going 50 percent but ask them to go a hundred percent,
like oh that’s really hard; so I look at the size of the company; the issues
are very, very similar, the big difference though is that larger organizations have
this built-in advantage of more customers, a brand, of cache, of customers,
a scale that smaller organizations don’t; so it must have a case when you in a
niche area, again you have a better positioning, a brand especially, a
customer relationship in a niche market but also because it’s more protected. The
reason to go and disrupt yourself may not be as strong; so I see all of these different weights pulling on different
companies that I’ve worked with and it’s; I tell you when you’re sitting there as
a leader of a small and medium-sized business it feels just as hard and
disruptive as when you’re sitting at the head of a large enterprise. It’s still
just really, really hard! And now to my preferred theme, you know, you talk
about leaders and and what has changed in leadership in the last five years; I
and I know you really like, you talk about it and you have some;
if there’s you know, you have thirty small business owners, leaders in a room,
all wanting to change, all thinking about you know how do I get to the next level?
How, where would you start? How would you sort of tell them what’s
the first thing they should do on Monday when they come back and they should
change whatever? I think the most important thing for a disruption
strategy, your strategy has to be focused on the future, on who your future
customers that you’re going to serve; so I do have a clear idea of who that
customer is, can you articulate it back to your team and create alignment on
your team, that this is who you’re trying to serve because if you don’t know who
that person is, you can’t drive an alignment and the strategy to make the
sacrifices on today to go after that future customer and the second thing
that’s really different today and by the way I go around and ask people, so do you
know who your future customers is, and almost nobody does; I would say maybe two out of a hundred people really do have a clear idea and in the other parties, even
if you have a good idea, how do you make sure that people inside your
organization know with us and you can line up; I think when you’re trying to
drive disruption you need to create a movement and because this is going to be
hard, it’s difficult, it’s going to be painful and so to motivate people to go
from one place to the other, you’ve got to create a movement, where people will
take on the matter of leadership themselves and drive this forward along
with you; and the the big difference today is, that the way you establish
leadership and the way you craft that relationship can be digital and
because it’s digital it can be much more constant and consistent and more
widespread across the entire organization, even out to your suppliers,
your partners and your customers; you’ve got to create a movement across your
entire ecosystem; so leaders who go like I don’t want to do any of this digital
stuff, it’s fluffy, it’s social, it’s Facebook, it’s not
serious; they don’t understand that communications and sharing is the
foundation for relationships and relationships are the way that you would
lead, that is all leadership is, a relationship between people who lead and
people who follow! So how do you do that in the digital world and at the speed of
digital, you have to be a digital leader and capable of using all of these
digital tools at your disposal and across the board leaders are terrible at
doing this, terrible at it! And going back to that; you know, most of these leaders today that
are sort of in their 40s, 50s are probably exactly as you said, they’re, you
know, they’re not as digitally, you know, professional, profoundly integrated into
the into that world; So do they need to get into that mode to actually start
some disruption or is there a way of you know getting there through a, I’d call it,
you know, at the same pace as you do the change; so is there a way for these
people who are not digitally; How do they transform
themselves to basically be able to do it? Or is it better for them to figure
out okay we’re not gonna do it that way, we’re gonna find another way? I think
that the best way to think about digital is that it’s just another channel, it’s
nothing special! Okay! And the people who are able to
transform and move into the digital spaces as leaders understand the need for
this constant, a different type of leadership, one that is, they put
themselves much more forward, they’re constantly sharing, they want to connect,
there are people who want to connect, these leaders want to connect with the
people they’re leading on a much more constant basis, they understand the
importance of sharing! They fundamentally think about leadership in a very
different way! Digital is one of the things they
discovered along the way like, oh I can I can actually express my leadership
through this way, they don’t say here’s digital I can be a leader, they go I want
this, is the type of leader I want to be and digital can enable that!
So for leaders who are reluctant to do this and I go, define for me what kind of
relationship you want with people and let’s see how digital can help you do
that and I find one of the best ways to do that, is to actually use videos; most
leaders do not feel comfortable typing and writing but they feel very
comfortable talking and so I just like have somebody record you on the phone
talking about your latest customer meeting, about what you’re excited about,
but what you’re disappointed in, because people want to hear that and just keep
posting that up; have somebody transcribe it, but just keep talking and keep
posting it out there and they go, that’s all I have to do?, I’m like yeah that’s
all you have to do! So going to these kind of leaders that have
transformed and I’m sure you’ve met many of them; what was really the profound
change in how they sort of interact and how they build out the relationships? In sort of real life everyday, you know, practices, did you see people in those positions transform, discover this new channel,
embrace it and once they embraced it, especially in big companies, that this
close connection, these leaders had on all levels, introduced change on the
middle layers? Because you know this way, you can have a relationship down to the
lowest; I remember there’s a great, I think there was a great analysis done by
Harvard Business Review a few years ago, you know what’s the trait of a a modern
CEO and it was strategic, and yet he can go from top to bottom within a very
short time span and talk on all levels; so does that kind of relationship,
does that kind of discussions that go across and you know into all parts of
the company, that does that produce tensions in an organization, because
you’re suddenly… Yes it does it does, absolutely, I call it
the power of distance. In organisations there are natural power
distances that people have, so like there’s seven layers between a CEO on
the frontlines and those seven layers in between when the CEO can now talk to the
person front lines, those seven people go what do I do now?
And in the past they were seeing themselves as gatekeepers, in the way
they have to reframe the role, is now as facilitators, it’s a very different role
but they still are very, very important! So I find what happens with the CEO,
talking to the front minds, they’re talking about very specific things at
that high-level strategic level, they’re not trying to do the managers jobs in
between, they still rely on that chain of command to be able to organize
everything; so I think there’s a difference between managing and leading;
the managers are there to make sure everything gets done; they’re
facilitating and breaking down all the obstacles and identifying problems and
making sure everybody stays on track; the leader sets the direction of the change
that we want to see and the managers are the ones who execute on that!
That’s how you define the roles when the leader at the top starts stepping into
the job of being a manager, that’s where things really break down; so it’s
important for the leader to explain and define and assure those middle managers
that their role is still very important! And how that looks and this new type of
organization! And about the book, pre-order I understand, is on the 24th; it’s coming out, so what’s
the main; you know, mindset of disruption, what’s the main one-liner
to our audience, so that you know, I think everybody should read it, because as I
said I’d really love, but I’d rather, a few things about you and your thinking; so what’s the three, four things that you believe our viewers should hear
about the book? Yeah, the high level is that we’d be thinking about disruption
backwards, in that we think we’re looking for like the perfect disruption,
innovation technology to drive growth but is
actually growth that is disruptive, it’s really disruptive to grow at a level
that you’ve never grown before; so if I were to say to you, okay you’re used to
growing at this level X percent every year, now make it to two X, okay, how does that feel, right? That feels incredibly terrifying, but disruptive organizations
think that way, they have a mindset that says, of course I’m going to grow now, I’m
going to make sure that we put in place all the things that are going to allow
us to grow at that level, it’s a completely different mindset and I think
the key one, the key thing the one thing that disruptive organizations do so well
is, they focus on that future customer because that allows them to make the
decisions today, to be able to capture that customer for the future; they don’t
know perfectly who that customer is, they’re constantly trying to figure it
out along the way, but they at least have a direction to head in and they are very
clearly aligned across the organization of who that customer is! In that book,
they’re gonna, that’s basically the main story subsequent, because it comes back
to you know, a lot of people don’t understand, they’re, their
customer base, I mean even the ones they have in front of them, let alone the ones
that you have somewhere in the future; so you think in that book people will be
able to understand also tactically how to get there, how to get the whole organization behind, sort of, what is that
customer, how to get it and its customer growth and then getting everybody behind
that story; is that sort of the way, how and you know I’m gonna read the book
in two weeks? Yeah it’s it seems like it can’t be that simple,
right is it that simple of an idea of how you actually create your social
strategy and it actually is; because if you try to make it super complex and
it’s but like these 80 different things you have to move you’ll never get an
alignment around the organization, all those details, the strategy the tactics
are important, but the fundamental underlying idea behind a disruptive
organization or disruptive transformation is, if you’re going to go
from your status quo to some place in the future; drive
exponential growth, it is going to be an extremely hard journey, so you have to
have a very clear idea where you’re trying to go to, otherwise people would
just stop and go, it’s too hard, it’s not worth it; Great! Final question about that, is how do you in the context of disruption,
how do you see the the role of, you know, do you think everybody on board or you
know, because you get into obstacles, people are tired, people are
sort of, what are you sort of, do you try to get everybody on board, or you go with
you know whoever’s on boards on board, whoever isn’t on board isn’t on board;
because it’s such a hard story; so where’s the, you know, where’s the
borderline of how strong you want to get everybody on board or is this sort of
one of those where you have to be quite borderline in terms of you’re either on
board or you’re not on board? I think the more that you can get everybody on board
the better off you are because if there are some people who are not dedicated to
your dragging them along and you got too much to do, to have to carry people along
the way too and they’re not happy, no human like this is not the right
direction, so have an honest discussion with them and that’s all they want from
you as a leader, they want you to be honest and fair with them, they’re not
asking you to always listen to that, but they ask you to be honest and fair, so be
honest and fair is like this, is the direction we’re going,
are you on board or not, if you’re, are fantastic, how you going to contribute if
you’re not what can you do to help you find a place where you can be happy! And
that’s an honest and fair discussion to have with somebody but goodness, I want
to have, make sure that everybody who is going on this journey because it’s so
hard, is a hundred percent, one hundred fifty percent behind and on board
with us; it’s, it’s too hard to get people who I just nag about it. Yeah,
to close off, some personal things, what do you do in your you know in the time when
you’re not sort of disrupting the world and disrupting
everybody around you? What is, I understand you like, you love to go to on
rollercoasters that you love sort of heights and stuff like that but what’s
the place where you get into that zen zone and in your sort of muse; you know
what Charlene is up to? I like to be on very high places, about to jump off
because that moment when, my palms are sweaty just thinking about it, when I’m
standing at the very top of an edge about to jump
down on something and harness, oh is it a harness, I feel so alive because
I know I’m safe, 100% safe but yet it feels really dangerous
and I just love that sense of falling; so it’s one of those places where I
get a lot of thrill it and I try to live my every day out of my comfort zone,
because that’s her life begins, that’s where the learning and the growth begins,
is at the edge of your comfort zone! So, I try to find experiences that push me out
of my comfort zone and it’s thrilling to be at that edge.
Wow! Where can we find you, where can our listeners and viewers
actually find you, are you, I know you’re on all the social media that you
can be, but what’s the best way of actually somebody? You can come to my
website charleneli.com and from there I’m
pretty much on every single social media with my name, so just search on there and
you’ll be able to find me, we’ll just put in that that’s my handle! And my understanding is, your
book is on Amazon? Yes, any of the other retailers, we do have international agreements, so I
know you have a very international audience, it’s pretty much wherever you
can buy books, you can find my book! Perfect! Thank you again
Charlene, thank you to our viewers, thank you for this unbelievable experience and
hopefully everyone will be able to take as much as I took
from this discussion! My understanding is, you know disruption is not an easy
journey, make sure you get people on board; but if there’s one thing to learn,
it’s get to know your future customer, get to know your future customer and
understand what the growth potential is and get everybody behind the growth and
make sure that everybody understands; it’s not gonna be an easy journey but
it’s gonna be a lovable journey as well, on the other side! So thank you again, Charlene for your time; we’re going to close and see you next week!
Thanks!

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