Market disruption is a term used frequently these days among executive leaders, and it has become synonymous with innovation. A recent McKinsey study actually identified common factors of disruptive innovation which highlighted the need to re-think leadership now as the global economy continues to shift. To adapt to these shifts in the global markets, Forbes contributors Karl Moore and Mary Larson examined four leadership actions that CEOs must take to deal with these forces of disruption. < !–more–>
The four actions executives need to take
These are the top priorities for CEOs to stay ahead of external disruptive market forces:
- Identify Critical issues: Above all else, CEOs need to identify the most pressing issues that could become detrimental to corporate value in their markets. Early awareness of disruptive market forces is found by engaging with consumers, investors and organizational stakeholders.
- Engage with appropriate people: CEOs need expertise around them to fully understand the issues that face the company. They need to talk to the best people and then trust their own informed opinions.
- Put them to work: Deploy these team experts to provide their insights into solutions for the potential risks facing the company. This involves engaging marketing, manufacturing, customer service and various other department heads in devising strategies to deal with the disruptive forces.
- Engage with stakeholders about strategy: To understand how these strategies will impact the entire organization, structured dialogue across all levels of the company is necessary to ensure a coherent strategy.
The importance of CEOs handling disruptive forces
Inaction in the face of disruptive market forces poses a huge risk. The goal is a combination of not letting these disruptions change the organization's strategies and vision, while also adjusting to change as it happens – at least before it engulfs the industry, as firms like Uber, Netflix and AirBNB have done.
As disruptions become threats, leaders need to be able to pinpoint exact strategies to drive positive corporate change, and there is evidence to show that employees at all levels are more attuned to the forces of change than ever before. That makes the need for engaging all personnel in corporate strategies essential in executive leadership now.
It is equally important, though, that the preparation of these strategies translate directly into critical decisions to identify new opportunities. According to the McKinsey report, strategies and future opportunities are all too often forgotten as 70 percent of time spent by the executive board focuses on immediate data with quarterly reports, audits, regulatory compliance and budgetary concerns.
Ultimately, the role of the CEO and his or her board is to develop and execute strategies that drive business improvement and align with the market and define new directions that lead to success in the long-term, not just for short-term quarterly profits.
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