Disruption is at an all-time high. The CEOs who think outside their four walls will thrive — while the ones who don’t will disappear.

Software that continues to eat the world. New technology that continues to emerge at a dizzying pace. “The Great Resignation.”

Business leaders face a bevy of challenges, both internally and externally. Disruption is coming from every angle. And as a CEO, it’s no longer enough to ask, “how do I make the widget and get to the next level?” Now, the question becomes: “What do I do to adapt to all of these disruptive elements, and not just to survive, but to thrive?”

The CEOs (and rising CEOs) who adapt — who ride these near-constant states of disruption and keep their companies relevant — will win the game. The ones who don’t will be left in the dust. 

For companies to remain relevant, they must engage a larger ecosystem — not a single entity.

To ride these multiple waves of disruption, CEOs need to create an organization that doesn’t look at things myopically. The most effective leaders can take a step back, look at the external factors that affect their company, and address them in the same way they’d address internal issues.

This is especially true in technology. Again, software is eating the world; we all know that’s been the case for twenty years now. Just look at the emergence of ChatGPT, an AI writing program that no one knew about weeks ago. Now, it’s poised to change the way we research and write almost all forms of content.

In this new world of increasing disruption, companies need to think of themselves not as singular entities, but as part of a larger ecosystem. They may have a great product or service, and a great network or channel. But instead of trying to be the lone dominant company in a particular space, the smartest executives are looking for ways to collaborate with players of all sizes. They’re bringing in insight from those players and evolving. 

As you look back on the history of business, that collaboration element isn’t something you’ll find too much of because historically businesses weren’t structured that way.  They were structured for command and control, top-down decision-making. But as we look toward the next few years, the ability to build a synergetic ecosystem will be a must-have for CEOs.

Boards are no longer hesitating to fire CEOs who aren’t forward-thinking. 

Operating from fear, complacency — and within their own “four walls” — will be the death blow for many CEOs in the next few years.  And they won’t realize it till it’s too late.

They likely won’t even take the first step toward collaboration. It may be due to fear, or because they think they’re doing well enough. Profits are fine, cash is king. But just recently, the board of a large logistics company ousted its CEO because he lacked the ability to digitally transform the company. He wasn’t thinking about the future enough.

When you get to be the size of a corporation — and bring in a billion, twenty billion, or $100 billion in revenue, you think you have all the answers. It’s a natural occurrence. Process and politics and the way we’ve always done it get in the way. But, what we’ve learned over the last decade of helping CEOs is, if corporate leaders can’t extend themselves beyond their own four walls, they won’t see what’s coming — or where things are going until it’s too late.

Successful CEOs see the need for collaboration. Instead of saying, “I’m going to spend $50 million on R&D,” they’re allocating some of that budget to leverage the forward actions of the venture capital industry and external innovation. Things become easier, smoother. They don’t have to do all the heavy lifting.

Just look at a company like THOR Industries, which is a partner of ours. They’ve been making RVs for 70 years and they are undeniably good at it. But their executive team recognized that the market was evolving. The younger generation and new outdoor enthusiasts want different experiences, they knew they needed to make their technology more sustainable. They engaged with all their brands, dealers, and new people. They needed to move beyond the four walls.

So they created an enterprise Innovation team and went out to build relationships in electric and connected mobility. They understand what big players like Ford and GM are doing in the space. They went downstream to young people and “Van Life-rs” to understand what they wanted next. The enterprise broke away from day-to-day actions and talked to people like never before.

Remember: disruption occurs slowly, and then very quickly. Even if the cash is there and things are going well, the cliff is going to come if a CEO isn’t thinking about the next five to ten years. And it’s never a slow death.

CEOs need to incentivize their employees to innovate.

CEOs who go outside the four walls signal to their employees that it’s okay to be creative — to think of new ideas and new ways to do business. It grants certain permission to innovate.

These CEOs have made investments in new ideas and new products that are external to their company. They’ve installed a real culture of innovation that acknowledges they’re going to be disrupted — and instead of feeling threatened by it, they see the opportunities in it.

But in order to truly get the rank-and-file on board, there also needs to be incentives to innovate. When employees are empowered to innovate and rewarded for doing it, radical shifts can take place.

We partner with Brunswick, a 176-year-old company and the global leader in marine recreation. Their bread and butter for over 20 years was boat production, but they recognized the next generation wants different experiences with boats, beyond just becoming a boat owner. Brunswick acknowledged this disruptive reality —- they didn’t fear it, run from it, or pretend it wasn’t happening. As a result, we’ve supported them in building a shared access division that’s delivering innovation that transforms experiences on the water and beyond. 

This company empowered its people to do things differently. The ones that have been empowered are driving the change for the corporation, while the ones who haven’t are, frankly, finding themselves out of a job.

You can’t disrupt your company by talking to yourself in the mirror.

Too often, companies will bring in a singular “innovation person” and tell them to go figure it out. But that employee isn’t truly incentivized to make waves, so why would they? They want their salary. They want their pension.

The executives who think outside the box — and empower their rank and file to do the same — will be the ones who stick around (or further ascend to power). They realize that being a CEO today isn’t just about making a widget. It’s about recognizing the need to build relationships with customers. It’s recognizing that your product or service needs to have a purpose. For your young employees, it needs to be sustainable.

In the past, CEOs could simply produce a widget that was put on the shelf at Walmart and sold. Today, that widget must reflect the CEO — and how they’re thinking about their business, customers, and employees.

The ones who understand this will adapt and thrive. 

The ones who don’t will become irrelevant. 

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