Live Enterprise: Answering Disruption with Humanity and Grace with Ade McCormack

Jeff Kavanaugh: Welcome to the Infosys Knowledge Institute Podcast, where we talk with experts about what it means to be a continuously evolving organization, deconstruct main ideas and share your insights. I'm Jeff Kavanaugh, head of the Infosys Knowledge Institute. Today, we're here with Ade McCormack, a leading advisor and public speaker. Ade helps clients navigate disruption, understands the newer rules of digital world and lifts people from the cogs and the machine to the cognitive athletes they truly are. Ade, you've got, sorry to date you, over 30 years experience advising business leaders, IT leaders and folks that serve both. You advise some of the most prominent organizations from the European commission, Gardner Oracle, major global corporation. What challenges were top of mind for your clients in 2021?

Ade McCormack: Well, if I think about my clients say they fall into two categories. There's what you might call end users. And those guys are facing disruption and the people, the organizations that approach me realize that their business model is no longer fit for purpose as you move into a more uncertain world. And then there are those clients that service those organizations like technology companies and professional service organizations. And those organizations recognize that they've got to do more than sell, if you like, technology pixie dust, in order to give these old school models a kind of tech makeover.

Ade McCormack: If I zoom out a little bit, what I'm actually seeing in the broader world is not much transformation actually going on. If anything, leaders are almost reverting to 2019 as a kind of comfort blanket, a bit like a child watching its favorite Disney movie for the umpteenth time. 2019 was the last known period of stability for many leaders. And it was in back in that era, that the skills that they’d acquired and experiences that they acquired were relevant. We're moving into an unknowable world now, and that's difficult for all of us. I'm seeing a lot of reversion.

Jeff Kavanaugh: Well, is that something that you think is a good thing or are you trying to tug them out of that reversion and maybe move forward?

Ade McCormack: I think helping them to move forward. But I do realize it's in human nature to kind of curl up in a ball when you feel threatened. So they have to be coasted out and even where you have a leader that is on for it and wants to lead the digital charge, so to speak, the organization itself has what you might call antibodies, that they themselves are trying to protect the organization or the organism against change. So there's a lot of resistance going on. And also when I get involved in advisory projects, I realize that when they're talking about transformation, they're really talking about digitalization.

Ade McCormack: So they're thinking to themselves, Hey, how can I use blockchain or I hear the company up the road's got AI. We need to have some AI. They've got big data. We want bigger data. They don't really know what they're asking for, but they know that these are things that organizations have. What they don't realize is that it's not about up becoming digital though technology is very important. It's about transforming the organization from the industrial era in which it was birthed to the digital age, which is increasingly an unknowable world.

Jeff Kavanaugh: So we've got these digital stars that didn't have that legacy. I'm a big for in of the middle ground sometimes, how do you keep the best old, don't curl up in a ball, but keep the best of it while adopting some of the new things and energizing new things. What do you see as this emerging middle ground where not legacy, I’ll call them established large companies they can hold onto. And that may be used as an asset while they're competing with these digital stars?

Ade McCormack: My broad advice is to not transform the existing business model, because what you are in danger of doing is unnerving the people and disrupting the cash flows. So if you've got a machine that's churning out cash, stick with it, what you don't know is whether that's going to run for another 60 years or another week, that's the big risk. And so on the basis that they might run for some time, spend a lot of time trying to digitalize it, make it more efficient and eke out more profit, but having one egg in one basket is far too risky.

Ade McCormack: So the middle ground here is to actually build your own startups or acquire startups. So your new business model is essentially the old business model plan A, plus a plan B, C, D, E, F and G. So you might say the business of being in business in the digital age is being in the business of creating new business models and running a portfolio of experiments. Some of which are just conceptual, some of which are of operating in the market, many will fail, but some will be your primary sources of cash. When the digital grim reaper comes into your plan A reception one day.

Jeff Kavanaugh: You use a word called grace and graceful organization. Obviously that sounds peaceful and wonderful, but what's it actually mean and how can someone make sense of that and adapt for themselves?

Ade McCormack: Yeah, this is a big concept to swallow basically, but I've got quite a few years of doing martial arts and movement type things. And I've always kind of sought out being more graceful if you like. And then I thought, well, what exactly is being graceful? Is it Audrey Hepburn? Is it LeBron James? Cary Grant? But interestingly for me graceful or gracefulness boils down to three things again. It boils down to grace as a subset of gracefulness. So grace is us having a conversation and me paying enough attention to you that I really understand where you're coming from and I can respond appropriately. The skill behind grace is to leave the other person feeling a bit better about themselves. And this is how civil society is based. So a graceful organization is one that is very sensitive to its environment and acts in a way as to improve that environment in some way or other.

Ade McCormack: So generally today it's about improving the condition of the major shareholders, but of course, we need to extend that to society and the planet. So you might say that deals with the EQ part, the IQ part, the mental intelligence part. That's the subset of gracefulness that I call elegance. So elegance is ultimately simplicity. So how simple, how elegant can my solution be? So given the scenario I'm facing, what is the response that uses the least energy yet gives the desired graceful response? And then the third element of this that covers the physical intelligence that covers the acting part is poise. Now, poise is generally considered as a kind of look at me standing with my chest out of my head up, but poise is also a dynamic concept. So when we watch Usain Bolt, for example, he is poise in motion. So LeBron James, Usain Bolts, Cary Grant, Aubrey Hepburn, they will all be described as graceful in one way or the other.

Ade McCormack: And people use that as a ethereal term. I've distilled it down to the actual reality of emotional intelligence, mental intelligence and physical intelligence. And again, like I was talking earlier with the living organism, these three things can be very easily built into the organization. And when we look at emotional intelligence, for example, IoT is the perfect opportunity to become a more graceful organization. The more senses and senses you have out there, the better. If you can have your organization, if you can develop a culture where people actually care about your organization, they become sensors. They tell you what's happening out there. Now, of course, all organizations usually have sales people who are out in the field, but often those sales people are more interested in themselves than the organization. So they hold back information or they don't share it with product and marketing and basically there's a breakdown in the flow of data.

Ade McCormack: So graceful organizations will address that so that there is a beautiful flow of data if you like, from the outside world into the organization. And the organization itself is essentially an innovation engine. It's taking what's happening in the real world, it's got a whole experiments on the go, not just experiments in relation to product and services, but business models as well, different go to markets, different financial models and so on. Now for the listener, this might seem, oh my God, this is just too much to be getting on with, but just bear in mind that at any one time, Facebook's got 10,000 experiments on the go. Amazon is constantly replaying around with its fulfillment centers, the new KPI, one of the new KPIs that the modern organization is failure velocity. And if you're not failing fast enough, you won't be in the game for very long .

Jeff Kavanaugh: That's right. Well, first of all, shout out to Rush because on one of their well-known albums, Grace Under Pressure, that's how you define poise. So we got to do that. Geddy Lee in that gang. It's interesting you mentioned IoT, the connotation of well Internet of Things helps companies via sensors, things on the edge, and if you sense your sense active. So it's an interesting how the EQ and the digital come together in that perspective. Well done in the way that's pulled together, given all that. So that's your construct? What are some examples that you've seen from your clients where they've made a step from acknowledging this, being aware of the need to do this and what have they put in place, or maybe what have they made better that was already in place as a first step towards this?

Ade McCormack: When they get it, they realize that people are key to this. They are in the business of cognitive management and therefore they start to tune their recruitment process to reflect that. So they become less about focusing on skills because skills get the job done, but you don't know what skills these people are going to require in a year's time or three years time. So they recruit on traits like creativity, commerciality, resilience, ability to cope with ambiguity and so on. And actually start to recruit less on business school name or companies you've worked for before, but recruit them based on their character, based on their vulnerabilities. So it's a very different approach to recruitment. It's not about putting a cog spec or a job spec out into the market and just pulling in the ones that will do it for the cheapest. It's about recruiting on a one-to-one basis.

Ade McCormack: And the definition of talent in this world increasingly is been able to do something of value that an algorithm or a robot cannot do. And some of my clients are getting that. They're feeding the culture, if you like with a new type of person. And then this new type of person will raise the bar for everyone, get your people sorted out and the customers will take care of themselves to some extent. If I had $100,000 left to spend on my company, would I spend it on the customer? Would I spend it on my talent? I'd spend it on my talent because they affect the customer experience.

Jeff Kavanaugh: That was the result of our live enterprise research coming out that I think they missed the part in some respects with customer centricity, like you said, the employee will create the other. Do you want the fish or the ability to fish and generate more and more of that in the future. Taking that forward, there's also, you and I were talking beforehand about this concept of readiness, and you'd mentioned you've had a disruption readiness Institute. And can we talk about this concept of readiness and is it a precursor to actually transforming? What is readiness and why is it important?

Ade McCormack: I think it's readiness for what, and I'm saying it's readiness for disruption. And what I think the market is having a problem with is it is assuming that disruption comes in just if you like technological and biological form. So we've all been aware of the digital tsunami and some of us have been affected in terms of career ending automation and defunct business models. We all got to experience biological disruption firsthand with COVID, but there's a sense out there that once COVID is sorted out, we'll be back to some new or next normal. Now, the reality is, is that abnormal is going to be the backdrop to our lives going forward and continual disruption. Some of your listeners might have heard of PEST analysis, political, economic, social, and technological. And there's even PESTLE with legal and environmental macroeconomic or environmental forces thrown in.

Ade McCormack: I think in terms of PESTLENCE where the I stands for innovation, N stands for natural resources, C stands for cognition, also known as talent, the war for talent and the final E extraterrestrial, the space race is having a bearing on all of those other forces. So a large part of what I do is actually help leaders understand the very, very big picture, how tensions between US and China for global hedgemony, for example, could change your business model or change your business opportunities overnight. If all of a sudden you can't get into key markets anymore.

Ade McCormack: It's understanding that disruption is as a large set of conflating and compounding forces, and disruption is not coming to an end as we come to the end of COVID. Disruption is only just taking off its tracksuit. So the world is becoming unknowable. That's what we need to be ready for and being ready for that doesn't mean having your eyeballs focused on a strategic plan and looking away from the window. Basically readiness is, I could anticipate that my enemy or my threat is a bear.

Ade McCormack: So I'm looking out the window looking for a bear. And whilst I'm looking for a bear, I get bitten by a snake. And I think to myself, well, I wasn't looking for a snake and that's the problem with trying to anticipate the future. Being ready is a bit like a Samurai warrior, who even in the heat of the battle is not concentrating particularly or solely on the person that they are fighting. They have a sense of what's happening all around them. You need to have 360 awareness. So being ready is essentially being ready for anything. And you can do that purely through your senses, but you can also do that by experimentation, by pressure testing the market. Or another way of looking at it is rather than having a plan A and backing one horse in the race, back all the horses, imagine what all your potential future destinies might be and start building them now.

Ade McCormack: So when we talk about innovation, what typically happens is that organizations innovate within their comfort zone, within their sector. They might go a little bit adjacent. They might go upstream, downstream, and that's fine, but I'm also advocating that you innovate in non-adjacent markets as well. So if you think of it as a three by three by three Rubik's cube, where you've got technological disruption, technological advancement, and market adjacency, those are the three axis. If you think of most people are doing innovation, that's not overly state of the art technology. That's not even going to disrupt their own business and is in their own market. That's okay, but you need to spread the risk right out to the far end. An adjacent markets, over the horizon, at technologies sector, disrupting at a sector level. It's having that portfolio of innovations that basically, if you have to abandon the ship, plan A, you've got some other options that are not just cold. You've been testing these for some time.

Jeff Kavanaugh: Right. And of course that means you have to have enough margin and enough buffer that you have the capacity and capital to do that while you're doing day to day portfolio of your activities.

Ade McCormack: That's where digitalization of your existing business model ekes out. Some of the costs that can be redirected in that respect.

Jeff Kavanaugh: Yeah. So it's the duality, fuel for growth on another side. As we're starting to converge a bit by respecting the time, what are success indicators for this graceful organization? What are some concrete things that you should look for or actions people can take?

Ade McCormack: I guess there's three types of organization. There is the lifeless factory organization that has no idea what's going on around it. And it is a victim of increasing forces. And the next level up is then the living organism. And the living organism is characterized by having emotional, physical, and mental intelligence. However, it tends to be a little bit knee jerk in its responses, a bit like a lizard. It takes every step towards it as a death threat. And so it over response, and this is characterized by leaders who overly react to market conditions. They're not cool under pressure. They just act without even thinking. And I think in the book Thinking Fast and Slow, this is system one thinking. Graceful organizations are system two thinkers. They reflect on how they respond to the market. A bit like being the calm Samurai warrior standing in the middle of the tornado. So there's chaos all around.

Ade McCormack: So the graceful organization is characterized on the shop floor level as the absence of microaggressions, no longer having the need to talk about diversity, equity and inclusion because everybody respects everybody. And even though we might be different, we are sufficiently socially skilled to not go around blundering. So in the course of a day, I might be a well-meaning individual, but I've got no sensitivity. So I'm leaving a comics trail of microaggressions as I move around the building. And I would be just only one person. So you scale that up. And then you've got a lot of people who are just their cognitive capacity is wasted on processing the way they've been talked to or handled. And that's a tremendous waste.

Ade McCormack: Graceful organizations don't have that issue because everybody respects everybody. And what you end up having is something that's akin to a cognitive gymnasium and people want to get there to do great work with other great people. So you then have a cue of people wanting to join this organization. You might say the business leader is a cognitive coach, or you might say the business leader is like a nightclub DJ. He or she can't force people into the nightclub and they can't force how long they will stay in the nightclub. But if they get the music right, people will be queuing to get in and they'll stay all night.

Jeff Kavanaugh: Fantastic. And thank you so much for your time and a very interesting discussion.

Ade McCormack: Thank you, Jeff.

Jeff Kavanaugh: Everyone, you've been listening to the Knowledge Institute where we talk with experts about what it means to be continuously evolving and learning, deconstructing main ideas and sharing expert insights. Thanks to our producers. Catherine Burdette, Christine Calhoun, Dode Bigley and Dylan Cosper, and Yulia De Bari. Until next time, keep learning and keep sharing.