Learning the principles of disruption

NRF Nexus: Pascal Finette on successfully managing and driving change

Pascal Finette knows a thing or two about disruption. But don’t just take his word for it.

Finette, co-founder of Boulder, Colo.-based consultancy be radical, has gathered insights from interviews with hundreds of world-class leaders who successfully managed change and transformed their companies. 

NRF Nexus 2022 recap

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His high-energy NRF Nexus session was originally slated to focus on “Foundations of practical futurism.” But in the spirit of agility — and after having numerous “amazing conversations throughout the day” — he chose to focus on innovation, disruption and transformation instead.

Disruption, he quipped, is akin to tofu, which is eaten often but tastes like nothing on its own. In the same way, “disruption” doesn’t really mean anything anymore. His take, then is to “disrupt disruption.” (That’s also the title of his forthcoming book, due out next year.)

Disruption is everywhere, and leaders typically only admit their fears about it behind closed doors. Finette’s company — which is focused on leading into and in the unknown — became obsessed with the topic, and the interviews with leaders began about four years ago.

“We asked them one simple question,” Finette said. “We said, ‘Don’t tell us the strategy, the big thinking, the models, the framework … . I want to hear from you what you actually did.’” And when you speak with a lot of people, patterns emerge, he said. 

First and foremost, transformation is not complicated. It’s just really hard.

Throughout the talk, Finette shared five insights learned from the leaders: first principles, process, core/edge, leadership and upskilling.

First principles

First principles thinking, he said, goes back more than 2,000 years. Aristotle defined a first principle as “the first basis from which a thing is known.” It involves arguing from “capital ‘T’ truth upwards.” Most people don’t do this; they’re more likely to reason analogically, looking for similarities to gain understanding. First principles thinking is harder to do, and takes consistently more energy. And yet, the leaders interviewed all did some form of it.

This can happen from inside the organization out, starting with what is known to be fundamentally true about the business and customer. It can be done from the outside in, starting with what is known to be true about the world or market. Or it can involve parallel worlds, when parallels are drawn from adjacent industries.

Process

Process, meanwhile, is about agility. Many organizations run agile to help with managing changing priorities, visibility, alignment, time to market and productivity. But that’s often only in the software unit. Why not apply it across the organization?

Core/edge

Core/edge relates to the tension between the core (or current, optimized, low-risk state) of a business and the edge (or high-risk “new stuff”). Leaders are not taught how to be ambidextrous with these opposites.

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Some handle the tension by keeping the two separate; one leader told Finette about maintaining “future Fridays”: Mondays to Thursdays are all about the core, but Fridays are entirely about working on the edge. Others believe there should be a “membrane” between the two, even if separated, such as transferring leadership established in the core to connect to the edge element. Still others believe in full integration.

None of these approaches is right or wrong; it’s unique to each company. But Finette discovered universally applicable truths in setting up the edge. It’s important, for example, to consider ways of dealing with risk and reward. People — and companies — tend to fall into three broad categories: “farmers” (good at sustaining); “gatherers” (who innovate and explore but still want to join the farmers at the end of the day in sustaining); and “hunters” (who enjoy the thrill of the hunt and disrupt). The hunters take risks and recognize that they might well die in their adventures, but also know that they can be celebrated as heroes upon their return — and get “the biggest portion of meat.”

“If you are a company, are you actually even attracting hunters?” he asked. And once the hunters are in place, are they being properly incentivized? Is the space available for them to be hunters? Too often, he said, farmers who do a good job are “rewarded” with opportunities that put them in the role of hunter. They might do well, but they’ll also likely get ulcers at the end of the night.

Finette also touched on the benefits of small teams for edge projects, and giving those teams control over the process, rather than confining them to “freedom within the system.”        

Leadership

As for leadership, the interviews revealed insights “different than what we normally see.” Those include the ability to commit (such as allowing cowboys to fully be cowboys without chipping away at what makes them unique); being able to effectively lead into the unknown; inverting the org chart so that those at the bottom become sensors, providing firsthand insight rather than just executing; communicating in story; and being persistent.

Upskilling

Finally, Finette spoke of upskilling. Leaders must continue to learn the new rules of any game, and understand what the company’s people really need to know. In addition, learning must be scaled to the edges, rather than assuming it will just trickle down. In closing, he reminded the audience that there are no maps. “Think for yourself,” he said. Besides, every map includes dragons.

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