MANAGEMENT IN DISRUPTIVE TIMES
“An analogy for business leaders in the financial industry that compares the challenging times of today’s technological enterprise transformation with the changes during the time of the industrial revolution when steam ships ended the centuries-long era of sailing ships.”
In 1971, the BBC began broadcasting a series on the history of James Onedin, who, as captain and later as shipowner, lived through the stormy times of industrialisation and the conversion of the entire industry from sailing to steam navigation. The series, which takes place in Victorian England in the second half of the 19th century, describes in a special way the subtleties of the interplay of a changing market. New technologies, new skills of market participants, increased conflict potential between entrepreneurs and managers and reorientation in an environment of shrinking margins – special challenges for those who tried to continue their business as before: with sailing ships.
The captain is responsible for bringing his ship, crew and cargo safely and within a specified time and financial framework to the port of destination. But what if the ship is no longer able to do this and the competition suddenly moves across the blue oceans with completely different ships? What if the shipowner does not have the capacity to trust the new technologies or simply does not have the financial resources to re-equip his fleet? And what about the crew? Does the crew has the necessary skills to sail on the new ships?
Many captains of banks and financial institutions seem to have this scenario all too present. E.g. due to declining customer traffic in bank branches, the high costs for a broad branch network are hardly to be paid today. Germany as a financial centre is “overbanked”, interest rates in the basement – the conditions in Germany for successful banking have never been as challenging as they are now. To this end, customers are continuing to drive change in the industry with their changing demands on digital tools.
Outwaiting a problem or tackling it
The complexity of economic changes has been enormous in every epoch, the difference to current upheavals lies in the temporal component. If companies do not react immediate to market changes today, they might loose their customers faster than ever before. In such disruptive times, all those involved want an “efficient” change process. The only problem is that the term “change” is so omnipresent that it is often perceived as stress and overload. As a result, many levels of management fall into one of the following situations: either they try to sit out the situation and leave change to their successors, or they push many, often less effective measures in an attack of blind actionism. Active, thoughtful and vital change management is often neglected.
More entrepreneurial thinking
Processes of change require both superiors and employees. If the existing situation cannot be improved or adapted at any vertical level, it must be questioned. Concluding, this means for all those involved that situations must always be reflected and corrective measures initiated at an early stage.
Understanding the corporate culture is vital for a successful transformation
In many companies, however, this need for action, which has a high potential for conflict, is often insufficiently communicated. In some places there is a lack of interest for employee issues, a lack of error and conflict culture and a minimal willingness to change. If banks neglect these issues, change processes threaten to fail on a broad basis. This means that managers in a disruptive environment have a natural need for action. The implementation of new strategies, systems and structures and early adaptation to changing market situations are vital factors for survival. A well-known quote by former US President Wodrow Wilson (1913-1921) is particularly valid for today’s highly competitive financial sector: “If you want to make enemies, try to change something.”
Those companies that create the change will share the large financial services market with the new market players and use instruments that did not exist in the classic banking of the past.
Just like James Onedin, who for the longest time was an advocate of classic sailing ships, finally added a modern steamship to his fleet. And to facilitate the change for himself personally, he named the ship after someone he loved.