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leadership lab

President, IBM Canada

Until a year or so ago, the conventional wisdom was that big, mature companies were on the defensive; that the world’s incumbent businesses were at risk of being disrupted – and supplanted – by startups and digital challengers. Of course, there was some truth to this. Many companies in every industry have gone through an initial phase of disruption by new entrants and digital-native startups.

We are about to enter a new era for business – one defined by “the incumbent disruptors.” In this era, companies with a past have a built-in advantage not easily replicated or leapfrogged by newcomers. By leveraging proprietary data, decades of industry-specific expertise, and emerging cloud, artificial intelligence and blockchain technologies, these incumbents will out-innovate the so-called disruptors of the last decade.

Those leading the way – the Reinventors, as they’re called in IBM’s recent C-suite study of more than 12,500 executives around the world – have a few things that distinguish them from the others. A key differentiator is their focus on culture. Reinventors are twice as effective as their peers at building cultures around active feedback, empowerment, co-creation and knowledge sharing.

In fact, Reinventors thrive on providing an open culture that solicits employees to develop new ideas and approaches, empowers teams to decide the best course of action and promotes collaboration across the business.

One of the more interesting findings for me is the significant shift in the return of people as a central preoccupation of C-suite leaders. In an age of astonishing inventions and the looming presence of AI, machine learning, virtual reality and augmented reality, it almost seemed inevitable that technology would be the leading issue facing business leaders for the foreseeable future. In fact, among the most important trends in the study over the last dozen years has been the rise of technology as the central concern of C-suite leaders. In 2004, technology factors ranked only fifth among top concerns, but by 2012, technology change was ranked No. 1 and stayed that way through each successive survey.

But people skills –the hiring and training of talent – was the biggest single riser in the latest survey, jumping from fifth to third, and reaching levels roughly equivalent to technological factors in importance. Corporate leaders are increasingly focused on their people – finding the right people, training, and retaining them in light of a growing consensus that talent moves companies.

Reinventors have a clear vision of talent development and are tapping into the talents of their employees by moving leadership from a centralized hierarchy to a group responsibility. Reinventor CxOs place their trust in their employees. In fact, 75 per cent of Reinventors say they actively solicit ideas from employees to develop new approaches. They are open to changing their methods if there is a better course of action.

Another interesting finding from the study is that Reinventors are not bogged down by middle management and bureaucracy; they cultivate autonomy and a fluid work structure. More than seven in 10 reported they have established an operating structure that promotes exploration by rewarding fast failure – the litmus test against mediocracy.

A great example of this mindset is the CEO of Haier Group, a China-based appliance manufacturer. Each team in the organization operates as an independent unit that works directly with its customers. Employees aren’t assigned a team; rather, they compete to form them. The competition demands that employees submit business proposals to lead an operating unit, and those leaders are responsible for “hiring” members of their team, including salary, bonus structures and other administrative tasks.

Reinventors have been around the block and have an established career. They have tried it the old way and have remodeled their management style to disrupt the current working environment to make the most sense for their employees, their customers and their bottom line.

This shows you don’t have to go to a startup to work for an organization that values creative problem solving, open communication and a flat hierarchy. Rather, you can seek out companies led by Reinventors that enable you to flex your creativity and experiment, collaborate and innovate – while empowering you to drive the trajectory of your own career.

Executives, educators and human resources experts contribute to the ongoing Leadership Lab series.