Disruptive Forces Blow Up 21st Century Business6 December, 2016 / Articles
Karen Morris is a strategic innovation advisor to public and private sectors specializing in insurance strategy. Previously, Karen served as a strategic advisor at DUAL International Limited, the world’s largest international underwriting agency, and as Chief Innovation Officer at AIG. She also held the roles of International Underwriting Counsel and Head of Product and Service Development and SVP for Southern Europe for Chubb, as well as Growth and Innovation Advisor for WR Berkley. She is a Senior Fellow of The Institute for Innovation in Large Organizations with over 25 years’ experience in law, management, underwriting and multinational business.
Christopher P. Skroupa: Could you describe the latest trends in 21st century innovation, from your perspective, and the impact they may have on the modern company?
Karen Morris: We see continuity and dramatic disparity. Twenty-first century innovation continues the traditional spectrum of traditional genres and degrees of innovation, be it product/service, process and business model or sustaining and incremental through to disruptive. The new “trends” concern previously inconceivable velocity and scale of innovation-led change.
The indisputably most impactful trend, unsurprisingly, is the tsunami of technological innovation. We have almost limitless, almost free computational power. The dissemination of tools to the many and the unspecialized turns yesterday’s customer into today’s accomplished self-satisfying amateur and into tomorrow’s new expert. Information asymmetry is a declining business proposition. And in our Information Age, ultimately, almost no sector will be immune to the transformative force of Big Data and analytics, from pharma to farms; neither will many workers, as these trends compound with advances in AI, advanced automation and robotics to displace a plethora of human industrial and professional actors. Machine learning will mandate that we learn to innovate the what and how of human commercial activity.
Coextensively, globalization and hyper-connectivity have shrunk our world and woven global economies together inextricably, challenging the very possibility of a purely local business. Additionally, trends in financial innovation and sourcing create new pathways to capital and entrepreneurship, dissolving barriers to entry and with them, the circumferences of established industry segments. Today’s businesses’ biggest competitive threat may not come from their competitor, as evidenced by, say, the so-called “sharing economy” or social media phenomena, or that unlikely little low-budget start-up.
Skroupa: You have described the 21st century organization as a “happy oxymoron.” Could you explain what you mean by that, and how we may be departing from a century of established management science?
Morris: The “happy” qualifier was optimistic—maybe bittersweet is more apt? So, it’s an oxymoron in that all companies operating now do so literally in 21st century conditions but some are more ideologically 21st century than others. We have had almost a hundred years of management science spurred by that phenomenon, under-recognized as an innovation, the professional corporate manager, and we thought we knew how the good got great, about winning and quality about sizing, sourcing and optimization, execution and efficiencies. The strategic story with its cast of three—resources, processes and values—romped through various thematic twists familiar to us all. In practice, however, the residual management preoccupation remained counting, controlling and predicting what the company does to make money. It often still does despite the evaporation and decline over the last 16 years of a vast number of previously gargantuan organizations.
My instinct is to look at those three things every company gets to make choices about—resources, processes and values—through a fresh lens. My working definition of the modern company (putatively perplexing for some) is “a community of people united around a common purpose.” This perspective puts people first but not individualistically, rather in how they interact, collaborate and communicate in union as a community. I stress purpose because that is what animates and engages us; it is the antidote to cynicism and complacency and it provokes a shift in emphasis from the mere what that you sell to the richer and more compelling notion of why you exist. It urges the dual reflection comprised in one question: What are we for? Intended operationally in the sense of what job it is that the customer hires our goods and services to accomplish and also what do we stand for, what values bind us? Vitally of course, purpose encompasses the central, immutable purpose of every for-profit organization that of attracting and keeping desired customers profitably. In my work, I have seen this approach liberate and inspire creative thinking, a shift that favors inquiry and understanding over quick answer, discovery and insight over prediction and blinkered certainty and clarity over confusion.
Skroupa: There has been a clear rise in stakeholder regard for ESG and CSR within the 21st Century. How do you see that shaping the future of shareholder engagement and company value?
Morris: As co-founder of The Global Sourcing Council and its UN hosted awards for socially sustainable sourcing, (The 3s Awards), I applaud the elevation in recent decades of investor and stakeholder regard for ESG. The momentum will continue. In part, this is pragmatic. Demonstrable negative consequences inevitably unfold financially, reputationally and legally from governance failures and adverse environmental and social impact.