Talent Development is the Only Way to Ride the Disruption Wave

Business leaders around the world go to work every day and either try to ride the “Disruption Wave” by evolving their business strategies, or are hit by it totally unaware that it was coming.  The “Blockbuster” story has now become the overused example of a company that didn’t see the digital disruption wave coming and went from being a darlings of Wall Street to bankruptcy in a blink of the eye.

Recent studies have shown that the end is near for many existing Fortune 1000 companies. The data suggests that business failures of large companies is increasing at an accelerating rate and the issues and challenges of disruption are more significant than any other changes impacting business including economic or political conditions.  Consider the following:

• Between 1973 – 1983, 35% of the Fortune 1000 were new companies
• Between 1983 – 1993, 45% of the Fortune 1,000 were new companies
• Between 1993 – 2003, 60% of the Fortune 1,000 were new companies
• Between 2003 – 2013, 70% of the Fortune 1,000 were new companies
• The trend indicates that between 2006 – 2016 that number will increase to about 75%

The easy, and perhaps unenlightened, answer to this incredible phenomenon is that these disruptions have all been about changes in technology. The common wisdom and whispers on the street sound like this:

• “The disruptive technical move from paper and chemicals to digital put Kodak out of business…”
• “Apple put Blockbuster out of business by innovating mobile music and video streaming”

And the current buzz from futurists and business trend pundits is that over the next 10 years there will be even more intense technological disruptions:

• “Driverless cars will completely change the automotive, energy, and insurance industries…”
• “Digital printing will turn the retail, food, and transportation industries upside down...”

A survey of CEOs by SurveyMonkey supports this trend.  When asked their greatest challenges, CEOs responded:

While this is one way to look at the information and react to it, there is a critical fact that cannot be overlooked;

• Digital photography didn’t invent itself and go to market itself.
• iTunes didn’t invent itself and create the infrastructure for more music and videos to customers by itself.
• Driverless cars aren’t going to build themselves and get onto the roads themselves.
• Digital printers that print out a new high-definition television at the click of a button aren’t going to print themselves.

People working in the organizations of today and tomorrow are still going to have to choose and execute a business strategy through people to make technical ideas turn into disruptive realities.

Based on this thinking, there is only one way to ride the disruptive wave and evolve to the next level (or face the ultimate failure); talent development.

I propose that as important as continued investments in R&D to drive disruptive innovation, an equal investment in talent development is required.  Companies are going to need their leaders, managers, and contributors to have the business acumen and leadership skills to turn ideas into revenue, profit, and shareholder value.  They are going to need the skills to analyze markets, understand customer needs, assess current and future competitors, market themselves, sell their products/services, manage the global supply chain, and finance the business.

I’m betting that there will be a direct correlation between the investments in Talent Development initiatives and the success rates of companies staying or leaving the Fortune 1,000 list.