At the end of June 2017, seven of the world’s 10 top valued publicly traded companies were tech companies. They are virtually all relative newcomers (excluding Microsoft and the reincarnated Apple).
Some of these are pure players, but whether a technology or pure player, even these companies are not immune to disruption. Naturally, size provides some important advantages, but I have seen on the inside that large pure players suffer from many of the ailments that hamper large non-tech companies. I have seen pure players that were born out of the first wave of internet companies, driving their business, shoving out marketing and managing their people as if it were back in the mid 1990s. That is a fatal sign. Moreover, tech companies are notorious for being run by engineers. There are
surely new technologies that could yet be disruptive even to these large organizations, several of which even have ingrained in them enormous labs and exploratory divisions. Yet, the bigger challenge will inevitably be about the internal culture and staying on track with a clearly defined purpose.
At a first level, there is the key issue of branding. Should the corporate brand also be the commercial brand (Apple)? Or is it best to separate both and keep them entirely separate (Alphabet)? Or perhaps create a hybrid, where the company has a commercially traded brand with the same corporate name, as well as a host of other brands (Facebook with Instagram, Oculus, WhatsApp, Masquerade…). In all cases, the challenge is creating an environment that is at once where employees feel a sense of belonging and where things can remain fluid.
Whereas these tech companies generally have a beat on most other companies as to the exciting new disruptive tech frontier, the biggest challenge and risk is one of mindset. Above and beyond the critical prospective challenge of succession from the founder to a hired CEO, leadership in these companies must pay heed to three important mindsets, without which the long-term health of the company will, in my opinion, be in jeopardy.
The first is about imbuing meaningfulness throughout the daily function of the business. Driving new subscriptions, working in open spaces, access to free candy and soda, and making the shareholder money have limits in their ability to motivate staff long-term. Even test-driving new technologies is a hollow excitement when it’s not tied to some stronger purpose. While I don’t intend to promote that every company try to “save the planet” there is an evident need for people to have more meaningfulness in their lives. In part, this is a function of the world we’re now living in and the characteristics of the newer generation. If you’re going to work so hard, accumulate titles and assets, or at the extreme edge, if life is so tenuous that a terrorist could disrupt your life, we might as well make sure that our time at work contributes to their sense of satisfaction and wellbeing. Employees need to feel as if what they are doing is contributing to the company’s strategy. With such a sense of meaningfulness, prospective employees will be more attracted and employees are more likely to have a higher sense of commitment. This must be developed into a key competitive advantage.
The second mindset is responsibility. Pure player or not, it is hard to stay abreast of all the latest changes. These changes are happening not just with the bountiful supply of new startups, but also with existing platforms with adjustments to conditions, processes and business models. Cyber criminals are adapting and evolving their manners. And through all the change, the pressure on short-term profits (via VC, PE and/or the stock market) makes it hard to keep a stern eye on one’s ethical standards. With the manifold temptations and/or delusions of grandeur, some top executives – Uber’s Kalanick and 500 Startup’s David McClure stand out as banner bad boys – one cannot hide poor ethics in today’s evermore transparent world. Setting the example is the best way to lead change. As David Brooks classified it in his TED talk, one should not lead with resume virtues alone. It’s about integrating eulogy virtues into your professional life as well.
The last mindset is collaboration. Of course, this collaborative mindset must be firmly ingrained within the company and within the different departments and line managers. However, just as creating an open space does not naturally cause collaboration, it’s vital to foster and encourage the right mindset with specific actions and behaviors. This can include recognizing and rewarding the right attitude. More importantly, if top management models the desired behavior – including behind closed doors – that’s how to inspire deeper collaboration within the organization.
Moreover, with the speed at which new tech is evolving and the fact that many of the technologies must be used together (eg AI and Big Data Analytics, Blockchain and the web…), it’s important to surround oneself and collaborate with a network of experts.
We’re operating in a new world and it calls for new forms of leadership. The way to Futureproof your business starts with having the right mindset. Then, with a clear and shared North, looking to find the right cocktails of technologies to help drive your strategy. Not the other way around. And it’s not because you’re a pure player or a tech company that you necessarily have the right mindset already.
Co-written with Caleb Storkey, Futureproof, How To Get Your Business Ready For The Next Disruption releases on September 7th, 2017, in paper back with Pearson and FT Press at £14.99 (UK) and $17.99 (US) and on Kindle on Amazon.com. For more information, please see https://futureproof.ly