One of the secrets to being the disruptor versus the disrupted may turn out to be pretty simple, according to Hal Gregersen, executive director at the MIT Sloan Leadership Center.
Working with Clayton Christensen and Jeff Dyer, Gregersen interviewed and surveyed hundreds of leaders around the world for The Innovator's DNA. It turns out, disruptors share a common characteristic. They have a strong drive to question everything, said Gregersen during his keynote at the 13th annual MIT Sloan CFO Summit. But, as Christensen and Gregersen discovered, knowing what questions to ask -- and more importantly, to answer -- isn't easy and isn't always valued by corporate culture.
A few years ago, the CEO of Lonely Planet told Gregersen he was "promoted as an answer-centric leader" his entire career. He didn't understand that to be problematic until he landed in the company's top office, where he realized that asking -- and being asked -- tough questions was "critical for me to see things I didn't know I didn't know," he told Gregersen.
So how do senior leaders figure out what the right questions are? Gregersen had some advice.
- Question everything. Gregersen suggested starting with this one: What's surprising today? "If we don't look for surprises actively, surprises come looking for us," he said.
- Pay attention to uncomfortable questions. Be open to asking -- and answering -- these three questions, no matter how uncomfortable they seem: What's working? What's not? Why? If uncomfortable questions are coming your way, pat yourself on the back, Gregersen said. That means "you have created enough trust in the space around you."
- Listen and observe. Take it from Rod Drury, CEO of Xero Limited. His company "went into 200 different small businesses to figure out their needs for small business software," Gregersen said. Drury observed small business owners as they worked and discovered, for example, one of the first metrics they look for at the beginning of the day is how much cash they have in the bank. With Drury's software, small business owners don't have to go digging through reports to find that information. "That was the beginning of a set of insights," Gregersen said.
- Consider "catalytic" questioning. For problems you're actively wrestling with, try Gregersen's methodology of catalytic questioning. Give your team 10 to 20 minutes to brainstorm nothing but questions. There is no right or wrong question and preambles are not allowed. There are just questions, which are written down and numbered but not answered. "The whole point here is that we're searching for the right question. One that's surprising. One that's uncomfortable. One that might cause us to get some better data," he said. While the exercise may not present any clear answers, "it can start us down a different direction," Gregersen said.
Big data and the CFO
Big data and advanced analytics are being leveraged by finance departments. For the finance experts gathered at the CFO Summit, Tom Barkin, global CFO at the consultancy McKinsey & Co., culled a list from clients or from McKinsey itself of eight examples:
1. Forecasting and scenario modeling. "We're seeing a lot of people use wisdom of crowds and crowdsourcing to get real value and understand what the demand would be for new products or for products in general," he said.
2. Working capital optimization. "I was talking to a friend of mine who works at The Weather Channel, and their commercial business is going through the roof," he said. The reason? Businesses know weather data can provide an additional edge, giving them "a much better sense of how to get the right product to the right store at the right time," he said.
3. Capital and resource allocation. Before opening a new branch, banks leverage data and "sophisticated models of trying to predict revenue," he said. Data will continue to be used as a way to monitor how the branch is performing.
4. Revenue maximization. "One of the airlines I know works on what they call 'emerging high value customers.'" These are customers who haven't made the high-value customer list yet but have a sudden uptick in travel plans. Barkin attributes the strategy to a "confidence that they can use multiple sources of data to try to find opportunities and then target offers to those customers," he said.
5. Risk management. Banks are using different sets of data to make decisions and to do loss forecasting. They're incorporating data points such as length of relationship and even social media into their analyses. "There's been a lot more focus on this and the quality of these models, and the quality of analysis has tripled in the last five years," Barkin said.
6. Cost management/expense management. McKinsey consultants travel a lot and thus file a lot of expense reports. "We've actually developed an algorithm to try and understand those who might be filing an improper expense report, and it's actually pretty powerful," Barkin said.
7. Human capital management. McKinsey also leverages advanced analytics for human capital management. "We've got a turnover algorithm to try and predict which people are at risk of turning over," he said. Data comes from job satisfaction surveys, staffing experience, mentorship and even how close an employee is to someone who departed recently.
8. Visualization and transparency. From airline sensors that measure fuel burn to a consumer goods company analyzing global data on a weekly rather than monthly basis, businesses are finding ways to collect and visualize data, which helps improve efficiency and provides greater transparency, he said.
"Whenever individuals, teams, business units, businesses or even countries for that matter turn their focus solely on efficiency innovation, it usually marks the beginning of the end." -- Hal Gregersen, executive director, MIT Leadership Center
"There are certain business schools out there that are thinking about requiring a semester of coding as part of their two year program." -- Jack Klinck, executive vice president, global head of global strategies and new ventures, State Street Corp.
"It's every individual's responsibility to make sure they're following the security awareness policies, that they understand what they're doing when they open up emails." -- Cynthia Izzo, managing director, information protection and business resiliency, KPMG Advisories
Previously on The Data Mill
What the Hortonworks IPO should signal to CIOs
Big text and thinking in data
Attention to UX is the first rule of mobile app dev