Competition While they dithered around wondering what to do, a new competitor jumped into the market ahead of them. They lost access to the payers for reimbursement for the first drug in this crucial new series. Ownership They believed their installed base of resources to be sufficient (tools, skills, approaches and people) because they had, a decade previously, worked very well. And they failed to create significant new relationships in the physician community. Secrets They had scant knowledge of the new market – doctors or patients – and did not have a way to find out. They could not adequately gather information externally or share information internally. Echo chamber Even after the epic fail, the head of commercial insisted everything they needed to succeed going forward was in place. It was just a matter of working harder and following the approach that had been so successful in the past (which had anyway never been codified). Tracking Monday meetings of the senior leadership team were about reviewing the sales figures of the previous week. Outcomes only. There were no conversations around developing new systems or capabilities for improvement.
Imagine the diﬀerence if senior leadership had met their challenge with open hearts and minds, instead of institutional arrogance built up from past successes.
Wisdom in the ranks
Consider, by contrast, the attitudes and actions of a diﬀerent example, PASA, Mexico’s leading waste management company, currently taking giant steps to create a globally competitive, environmentally sustainable business. And this is despite operating out of a country that has little requirement for sustainability or environmentalism. PASA is setting its sights much higher than its current situation demands, and is reinventing itself in the process. Let’s examine the same five factors at this company versus the pharmaceutical company: Competition Even though PASA is the largest waste management company in Mexico, it is taking huge steps to improve in big ways. It has converted its entire fleet of trucks to natural gas, built biomass facilities, captured natural gas
from landfills, and is the first of its peers to expand internationally. Ownership Even though it buys rather than rents, PASA quickly retires outdated assets to ensure it has the best technology. Recently, it converted its entire fleet of garbage trucks to natural gas. Secrets The head of innovation is a Frenchman with deep knowledge of sustainability in the waste management business. Key members of the organization will soon visit world-class German waste reclamation firms to understand its best practices. Echo chamber PASA leadership has organized a series of educational events for employees to gain their buy-in to new changes and collect their ideas. The goal is to help them innovate throughout the legacy business so that new ideas and practices can eventually be implemented. Tracking It goes without saying that all executives are open to, and searching for, best practices external to PASA as they keep their ‘arrogance barometer’ lower than most.
Lessons from the edge of disruption
What are the lessons we can learn from the edge of disruption to help us better compete and win in the new digital economy? First, we must understand that disruption is coming to our industry. It is not a matter of if; it is a matter of when. And if we are unprepared, we could squarely launch onto the road to irrelevance. Imagine if Elon Musk announced he was targeting your industry. Are you prepared? Next, we must embrace the five key age of disruption operating principles that are now in full force: 1) We all compete with Amazon; 2) Ownership is no longer vital; 3) There are no secrets; 4) Avoiding the echo chamber is crucial; and 5) We are all being tracked. Understanding these principles is important. But leveraging them is power. Lastly, we can either lead through confusion or lead through wisdom. Our choice. One is arrogance-based, and the other embraces uncertainty and leads with humility and a willingness to learn. Let’s put into practice the astute words of Eric Hoﬀer, who said: “In a time of drastic change, it is the learners who will inherit the future. The learned usually find themselves beautifully equipped to live in a world that no longer exists.” How prepared will you be when disruption knocks on your door? — Kate Sweetman and Shane Cragun are founding principals of the SweetmanCragun Group Q2 2018 Dialogue