How to Design for Disruption

Why a methodical strategy might transform a dangerous environment into a fertile ground for expansion.

There will be a time of tremendous disruption because of things like geopolitical tensions, supply chain collapse, climate change, the advent of AI, and the possibility of a recession brought on by inflation.

Many heads of state look at this unpredictability with a cautious and restrained perspective. Organizations are putting their plans for change and growth on hold while they barricade themselves inside and wait for the dust to settle. That’s the constant drumbeat I hear in the corporate world and in the media.

We disagree and believe that if corporate executives and their organizations want to remain competitive (and lucrative), they must adopt the idea of D-VUCAD (disruption, volatility, uncertainty, complexity, ambiguity and diversity). They need to look at the interruption as a chance, not a barrier.

Market disruption may be extremely harmful to a firm (just ask Kodak, Nokia, or Xerox), but it can also present huge possibilities for businesses who are nimble enough to take advantage of the shift to the new normal.

Possibilities hidden from plain sight

In business, agility implies being able to take an unexpected result and transform it into a positive development for the company. This major transition from public to private transportation was one effect of the Covid-19 epidemic, for instance. Nonetheless, many still desired to maintain their social lives and connections while on the road.

How to Design for Disruption
Hidden from plain sight

A niche existed for meeting people while on the go. It was a chance that Italian car parts maker Marelli seized early and developed in novel ways. The incorporation of touchscreen display displays into the side panels of automobiles was one of their inventions that let passengers keep in contact while on the go. With their innovative and quick thinking, the organization is now in a prime position to take advantage of a chance presented by a sudden change.

How, though, can a business prepare for the unexpected? We recognize the irony, yet cannot afford to sit on our hands. If they want to survive in the D-VUCAD environment, businesses must adopt a “design for disruption” mentality, coming up with and implementing plans that will make them more adaptable and nimble.

Adapting Markets

In a dynamic environment, businesses must break free of the status quo. Every decade or so, businesses need to undergo a complete makeover in order to adapt to new circumstances and new sources of revenue and profit. Sameer Hasija describes this process in his book The Phoenix Encounter, in which he explains how to spot potential dangers that might alter established markets and devise plans to start over.

For instance, consider L&T Technology Services (LTTS). The world’s preeminent provider of ER&D services is gearing up to compete in a D-VUCAD environment, where rapid technology advancement has already disrupted many of its conventional businesses.

How to Design for Disruption
Adapting Markets

When you factor in the impact of the global pandemic on the labor market, the rise of the gig economy, the rise of the home office, and the disruptions to travel and face-to-face communication, it’s easy to see that the way companies have operated for the past century has changed, and perhaps irreversibly so.

Nonetheless, this profound change might be seen as a chance for growth. The market for ER&D is expected to expand at a CAGR of 12–13% from 2017 to 2025, reaching $75 billion in the United States alone.

As the globe invests more money in innovative technical solutions, it is crucial for engineering services businesses to shift their focus to the client.

Customers used to evaluate businesses based on the quality of their products and services, but in today’s experience-driven economy, that’s no longer the case. Cloud Standards Consumer Council Executive Director and end-user advocate Dr. Richard Soley puts it this way: “Business [are beginning to] purchase results, and not [just] the tools that provide them.”

A revitalized mission, vision, and values charter may be the first step in driving such transformation, since it allows an organization to concentrate on the basics. In the case of LTTS, this meant emphasizing the significance of people in the innovation process and shifting towards a culture that placed a higher emphasis on working with their stakeholders to provide inclusive growth for all.

Take your chances

How, therefore, can a business thrive in today’s VUCAD world? The starting point for any kind of innovation should be the existing company model. Consider the developments that may soon affect your sector, as well as those that are already having an effect, and pick the ones that will have the greatest bearing on your business and your consumers.

Making smart wagers might be challenging, but doing so can pay you in large dividends. The American technology firm Cisco is a great illustration of this trend. In the past seven years, Cisco has invested heavily in becoming a forerunner in the Internet of Things (IoT), which was still in its infancy at the time.

During 2021–2028, the global market for industrial IoT is expected to expand from its 2020 valuation of US$216.13 billion at a CAGR of 22.8%. With about 15%, Cisco is a market leader. Cisco opted not to wait for the market to expand before entering it. Although a competent business knows how to fish effectively in an existing body of water, a really exceptional one builds its own.

Using the Appropriate Methods of Technology

One way for businesses to stand out in the competitive D-VUCAD market is by finding, adopting, and putting into practice the most appropriate technology. Focused investments around these game-changing technologies can help open new growth paths as organizations continue to search the global scene for fresh possibilities.

How to Design for Disruption
Using Appropriate Technology

In the business world, Microsoft serves as a prime illustration of this principle in action. While the computer giant’s meteoric rise to the top of the cloud computing industry has been well reported, only a decade ago, cloud computing represented a very minor component of their operations. The top brass at Microsoft saw a technology trend that may have a favorable effect on the company’s bottom line and had the foresight to back it.

A growth mindset is essential for coping with disruption, but it may be difficult for leadership teams to cultivate one unless they are pushed.

Nonetheless, it is important to remember that picking a technology is always a gamble. The path you’re about to travel in life will always be affected by the decisions you make and the energy you put into moving things along.

Be ready for what’s to come

The instance of Shell is also quite instructive. With a plan to install half a million charging stations for electric vehicles by 2025, the oil and gas behemoth has been making rapid inroads into this market. Shell’s dramatic rebranding as an EACV player exemplifies the value of anticipating market shifts and positioning the company to capitalize on them early.

Predictions of future trends are not always accurate. However, you shouldn’t expect every experiment to be a smashing triumph. The key is to look at many different options and choose which ones are worth pursuing. Attempt something, if it doesn’t work, try something else.

There are now many examples of companies trying out new approaches in light of continuous upheavals. Take Caterpillar, for example, which just acquired Yard Club, an online marketplace for such products. On paper, this appears to be a threat to its current business model, which revolves around the sale of brand-new tools and machinery. On the other hand, if they adopt a new circular business model in which equipment sharing is commonplace, they may become a leader in the field and help shape the future of business in ways that are consistent with the growing interest in sustainability throughout the world.

Exhibit quickness, agility, and skill

Maintaining relevance in a competitive market and capitalizing on emerging possibilities are two of the primary drivers of a company’s long-term success, respectively. Although the positive effects of change are clear, it is not always easy to put into practice.

When a business is successful and operations are operating well, workers may wonder if there’s any reason to shake things up. Yet the truth is that if you wait until something goes wrong, by then it is typically too late to do anything about it. In most cases, it is the investment community that raises doubts about the status quo and points out early warning signs. Companies must keep their ears to the ground in order to detect any potential dangers.

The difficulty is in fostering a desire for constant change without upsetting your team or jeopardizing what has been successful up until now. As a change in approach may have unintended consequences for some team members, it’s important to consider them carefully.

Consider the L&T Group as an illustration. The Indian engineering and construction behemoth has just made the transition towards green energy by constructing the first green hydrogen plant in the world at its industrial complex in Hazira, India. By 2026, the Group expects to have reduced its own and its clients’ annual greenhouse gas emissions by around 300 metric tons thanks to this program, which is in accordance with its declared climate leadership ambitions. Instead of waiting for pressure to embrace a carbon neutral path, L&T has taken the initiative on this front, earning praise from its constituents in the process.

Using a collaborative approach

Leaders can’t do anything while they’re isolated. If you want your transformation to be successful, you need to make sure that all of your stakeholders — workers, customers, investors, and society at large — are on board with, and have a firm grasp of, the goal, vision, and values you’re promoting. When people can see the value in the innovation for themselves, they are more inclined to support it.

That’s why it’s important to implement change gradually, so that no one has to go through the emotional upheaval of adjusting to a sudden shift. By phasing in these modifications gradually, you can highlight their value at each stage.

To ensure the widest possible agreement is reached, it is essential to make stakeholders feel like they are contributing to the process by listening to and responding to their concerns and giving them a voice in the development of solutions.

By working together, you can create a plan that everyone supports and that positions your business to adapt to and profit from future changes.

Read more: How to Become a Star in a Strange Land

Wish-Talk-Give-Double Down

LTTS’s “just in case” strategy was informed by their “Dream-Discuss-Deliver-Double Down” moment, which resulted in the identification of six “Big Bets”: electric autonomous and connected vehicles, 5G connectivity, digital products and AI, digital manufacturing, medical technology, and sustainability. Each of these movements is already having an effect on our culture, and their reverberations might become more widespread in the future.

Making the mental transition from a “just-in-time” mentality—where you try to deliver what is asked, when it is needed—to a “just-in-case” mentality—where you can plan for disruption and growth—is perhaps the most important step for any organization looking to adapt to a D-VUCAD environment.

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