146: Transforming Your Leadership through a Disruption Mindset with Charlene Li
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‘Disruptive Leadership’ is a big trend in business today. But what does it really mean? Why is disruption so critical to achieving progress, and how can we cultivate it effectively as leaders? Entrepreneur and founder Charlene Li is the bestselling author of six books, and in her upcoming book titled The Disruption Mindset, she helps us answer these very questions. Charlene joins me on this episode of The TalentGrow Show to discuss the key ideas behind her book and to dig into what a disruptive mindset really means. Discover how Charlene defines a true disruptor, why disruptive companies actually need a great deal of order and structure to be successful, and how you can cultivate effectively the three elements of disruption: strategy, leadership and culture. Plus, Charlene shares a real-life example of disruptive leadership from software-titan Adobe! Listen and share with others in your network.
ABOUT CHARLENE LI:
Charlene Li is the author of six books including the New York Times best-seller, Open Leadership and the co-author of the critically acclaimed book, Groundswell. Her next book, The Disruption Mindset set to publish August 2019. Charlene is currently a Principal Analyst at Altimeter, and was previously the Founder and CEO of Altimeter Group prior to its joining Prophet. She was named by Fast Company as one of the most creative people in business and is a frequent speaker and advisor to Fortune 500 companies. She is a graduate of Harvard College and Harvard Business School and lives in San Francisco.
WHAT YOU’LL LEARN:
Charlene begins by defining ‘disruptor,’ and shares interesting results she found from a global leadership survey (6:00)
Charlene describes an array of leadership mindsets (10:03)
Why the most disruptive companies actually have a tremendous amount of order and structure (11:54)
How can you make the order and structure in your business complement a driving disruption mindset? Charlene shares an example (13:13)
The three elements of disruption: strategy, leadership and culture (15:23)
Charlene describes, with a real-life example, what a disruptive leader looks like (20:20)
What’s new and exciting on Charlene’s horizon? (24:21)
One specific action you can take to upgrade your disruptive leadership skills (27:05)
RESOURCES:
Get Charlene’s book, The Disruption Mindset
Check out Charlene’s website
Listen to Episode 144 of The TalentGrow Show with Liam Martin for more on using processes and structures effectively in your organization
Transcript:
TEASER CLIP: Charlene: Strategy says, “How do we achieve our objectives? One of the biggest problems is we’re focusing on the wrong thing. We tend to focus on saying, “Let’s focus on today what the customers are,” and disruption is all about the future. What I found is the only way to orient a company to make these tough choices today, to take on these obstacles, make the investment and [inaudible] businesses is to have a really clear focus of who your future customer is. That is the center of your strategy.
[MUSIC] Announcer: Welcome to the TalentGrow Show, where you can get actionable results-oriented insight and advice on how to take your leadership, communication and people skills to the next level and become the kind of leader people want to follow. And now, your host and leadership development strategist, Halelly Azulay.
Halelly: Hey TalentGrowers. Welcome back to another episode of the TalentGrow Show. I’m Halelly Azulay, your leadership development strategist here at TalentGrow, which is the company I started in 2006 to help develop leaders people actually want to follow. It is the company that sponsors this show so you can enjoy it every single Tuesday for free to help you grow your leadership skills. Before I introduce you to this week’s guest, I just wanted to share with you a really fantastic, recent, new Apple Podcasts review that I received from a listener. The listener was Selma Curty and the title is “A dose of effective, professional and personal development.” Sel says, “Listening to Halelly’s tips and her interviews with distinguished guests has encouraged me to be more self aware and has motivated me to be a life-long learner. As a results, I feel that I am growing professionally and personally. I look forward to this podcast every week.” I love it. Thank you so much Sel. I appreciate that you took the time to leave that really kind review and you, TalentGrowers, if you listen to this podcast and get value and care to leave a short review like that, I could read it on a future episode of the TalentGrow Show and I really appreciate every single review. I think it really helps other people discover the show and give it a try.
This week I have a best-selling author and a founder and a disrupter, Charlene Li. She is going to share with us some of the information that’s in her latest book, The Disruption Mindset, about how to think like a disrupter, how to be a disruptive leader, how to create the kind of structures and processes in your organization – even in your team I guess, if you’re not leading the entire organization – that can help create the kind of disruptive change that will help your company stay relevant and your current and future customers continue to benefit from everything that you do. I hope that you will find it inspiring. It’s the kind of thing where in leadership, there are specific things you have to do for the day-to-day, and with your team, but you also have to keep your eye on the horizon and be thinking in terms of the future and as a leader, you need to be visionary. Charlene talks about creating movements, so I think that you’ll like it. I hope that you do. Let me know what you thought about it afterward. Without further ado, let’s listen in to my conversation with Charlene Li.
Welcome back TalentGrowers. This week Charlene Li is here with me. She’s the author of five books including the New York Times bestseller Open Leadership and the co-author of the critically acclaimed book Groundswell. Her next book, The Disruption Mindset, is going to be published this August and she is currently a principle analyst at Altimeter and was previously the founder and CEO of Altimeter Group, prior to its joining profits. She was named by Fast Company as one of the most creative people in business and is a frequent speaker and advisor to Fortune 500 companies. She is a graduate of Harvard College and Harvard Business School and lives in San Francisco. A fellow Californian, welcome Charlene.
Charlene: Thank you so much for having me.
Halelly: I’m really glad you’ve stopped by. Your topic is interesting and a little bit different from what we typically talk about, so I’m looking forward to sharing this with the TalentGrowers. Before we do, I’d love for you to describe your professional journey. Where did you start and how did you get to where you are today?
Charlene: I started consulting before business school, and then after business school I went into newspapers, which is not what people typically do. But I came to Silicon Valley in 1993 because there was this thing called the internet that was blowing up and I wanted to be part of that. I was kind of a disrupter right from the very beginning, and I thought newspapers were definitely going to be impacted, so that’s why I planted myself there at the San Jose Mercury News. From there, I became an analyst at Forrester for 10 years, and then I started my own company back in 2008, right before the recession hit. We fortunately were covering a really interesting space with technology and social media, so everybody wanted to know how do you use this new technology to grow your company? Hit those things at the right time, grew like crazy through the recession which is just insane, and then was acquired four years ago by Prophet. From there, keep writing research and books and I keep working and research, and really enjoy working with people about this stuff.
Halelly: How awesome. How many employees did you have when you were acquired?
Charlene: About 20 people. And now we’re much smaller because time and days have evolved and we have a much larger infrastructure. Prophet, which is a company that acquired us as a mid-sized consultant firm global, about 500 people formally, so good enough scale to be able to do some really interesting work. We keep busy.
Halelly: That is definitely a disrupter’s journey, and your latest book is called The Disruption Mindset, that like I said is coming out in a couple of months, and I'm looking forward to your release. Congratulations. You say that you want to launch a movement of disrupters, a virtual army of change makers in all aspects of life and business. I kind of love that. Most people don’t like to change, as you mentioned in your book or in what I’ve read about your book, but you say that disrupters are wired to walk on the knife’s edge because it makes them stretch and grow. I totally agree that the people who kind of move things are the ones that make the biggest impact, people who are willing to go outside their comfort zone. Those are the ones that lead organizations that are capable of executing a disruption strategy that balances short-term execution to achieve today’s goals against planning and investing for the future. I’d love for you to talk to us more about the distinction between the true disrupters versus everyone else.
Charlene: I think true disrupters understand that in order to reach these new places of growth, it’s going to be difficult. It’s going to be a tough journey. Frankly, it’s going to be painful. That’s how you grow. And people say, “I want to be innovative, but I don’t want it to be uncomfortable. I want it to be a known, clear process.” They’re not going to get that, because the minute that they come against a hurdle or an obstacle, they’re like, “That’s too hard. I’m not going to do that.” But I find that people in organizations, they often times know what they need to do in order to move past a particular area, if they see a disruption coming. But they look at the organization and say, “It’s a huge battleship. I could never turn it,” so they don’t even try. Disrupters, though, “Yeah, I see the obstacles, but I’m still going to go run toward it because that change needs to happen.” These are change makers, people who really believe in the opportunities for growth. They’re naturally optimistic about things. And yet they have this incredible capability of leading people through that change. It’s an interesting mix, the disrupter, a combination of that change mindset and yet the leadership behavior to be able to lead people and make that change come to life.
Halelly: You’re describing, I guess, characteristics. Do you see them as traits that you either have or don't? Or are these things that you can adopt and learn and anyone can do it?
Charlene: Well, I think you’re naturally inclined, and so they are characteristics. They’re also behaviors. I think with mindsets and behaviors, I did a survey of 1,000 leaders globally – U.S., U.K., Germany, Brazil, and China – and what I found is that the people who are most disruptive are capable of driving exponential change. There were two characteristics. First of all, they have an openness to change. They just have a mindset toward that. They think that change is a good thing, not a negative thing. They run toward it. Sort of a growth mindset so to speak. The other part is they have these leadership capabilities, those behaviors, where it’s not about them, but it’s about everyone else. It’s about developing relationships or followers and really empowering and inspiring them to achieve these goals. So it’s an interesting combination of these two things.
To your question, can you change that? Yes, you can. First of all, you can start to slowly change your mindset. Even if you’re more pessimistic and you gravitate toward constant mess, but by partnering in particular with more people who have that openness mindset, that kind of drag you and open your mind toward these new opportunities. Then the other part of learning these behaviors, as we know, leaders are not born, they’re created.
Halelly: Amen.
Charlene: So working with strong leaders in the space who are capable of driving to other people, inspiring them, that’s hard work. It’s really hard to see yourself as the leader, creating movement. I think basically these two things are possible. That said, these four different archetypes of leaders, in a disruptive world, some will be strong in both of these – which I call the realist optimist. They’re like the cream of the crop of disrupters. They’re capable of doing both, being open and leading people. Then there are worried skeptics who are not open to change necessarily, but they are the problem solvers. They’re the ones who can look around the corner and see all the things that can go wrong and repair the organization before that. Partnering a worried skeptics with a realist optimist is a really powerful combination. They kind of need each other to make disruption happen across the origination, because if a realist optimist can convince a worried skeptic that this is the way to go forward, nothing can stop them.
Halelly: That makes a lot of sense. I can’t remember where I heard or read this, sort of a fault of many visionary leaders is that they’re too optimistic and they just completely miss or ignore risks and dangers, so that skeptic probably is the one that sees that and maybe they each complement or tame each other and they create that holistic picture.
Charlene: Yes. I think to build on that, there’s one the Agent Provocateur. This is the person who talks a great game, but when it comes down to actually the nitty gritty details of how to get it done really does not tend to work in that direction. Right now, we have a lot of [inaudible] who wave a lot of their arms up in the air and go, “Disruption is coming. Disrupt or die!” And then they walk off the stage to thunderous applause, and that sounds great, how do we do it? Yet you have to have that grit, that detail, that structure, the process. The most interesting thing that came out of my research is that the most disruptive companies actually have a tremendous amount of order, of structure and process. They are really buttoned down and get things down. Because we as humans can only tolerate so much change. If you’re going to create a lot of change, a lot of growth, then the way that you do that, the determination of how you work together, has to be constant. So the process will be the same, but what you’re achieving with that process is so huge and audacious, you know that you can focus on that big change because you don’t have to focus on how you get it done. Disruptive organizations, people think disrupters are disorganized and chaotic, but it’s just the opposite. They are so buttoned down and ordered.
Halelly: That is so interesting to me. It really does sound like a paradox, what you’re describing. I’m struggling a little bit to think of how that would work in practice in the sense that if you have structure and order and processes, yet you’re changing a lot, then doesn’t that throw everything out the window and wouldn’t none of those things apply for very long?
Charlene: Think about what you’re changing. You’re changing your business and you’re changing how you’re going to work, but if you have a process toward creating that change, then it becomes a lot easier. Process is how you share information and how you make decisions, governance, you pull those into the organization. When you know how you’re going to change, how you’re going to meet with each other and make decisions so the change becomes a lot easier. What’s really hard is when you don’t know. I’ll give you an example – one company I studied was Huawei, who are in the news a lot these days because the U.S. is saying that they have spyware built into their technology. Let’s put that aside and actually look at how they can actually innovate, because they’re a highly innovative company. They have 40 percent of their people involved in some form of R&D. That’s a lot of people to coordinate.
Halelly: That’s research and development.
Charlene: Yes, exactly, research and development. So somebody in Uzbekistan can create something that’s new for a client there. They put it into their database, into their innovation and research and development database, and then somebody in Brazil can see that the next day and implement it for their client. The change is happening, but it’s happening at a global level, across 170 different countries. They have I think 13 different research centers, innovation centers, and they’re all structured the same. The process is exactly the same way, so when a scientist moves from one location to another, they don’t miss a beat. It’s as if they’re walking into the same lab, same process. Everything is the same. So that they can focus on the work and not how people do things different in each of those centers. That takes a lot of discipline. And as a result of that, I mean, people talk about them and joke that everything has a process. In fact, if they start something and they don’t know what the process is, the call the process engineers in and say, “Tell us how to do this so we don’t have to figure it out. So we can focus on the work.”
Halelly: That helps, thank you. We actually just recently had an episode with Liam Martin, he was talking about how creating processes and structures is one of the ways to help you become more efficient. So that is a great compliment. You say that disruption has three different components. I think we’ve probably started talking about it already – strategy, leadership and culture. I’d love for you to give us a high-level – obviously in your book this is where our listeners are going to be able to get a lot more about that – but give us a high level version, what do each of these mean and why do most of our listeners, the TalentGrowers who are not maybe necessarily at the top of their organization calling all the shots, why they should pay attention to this?
Charlene: Sure. Again, I focus very much on this mindset that has to change around these three areas. Strategy says, “How do we achieve our objectives?” One of the biggest problems is we’re focusing on the wrong thing. We tend to focus on saying, “Let’s focus on today what the customers are,” and disruption is all about the future. What I found is the only way to orient a company to make these tough choices today, to take on these obstacles, make the investment and untopload [? inaudible] businesses is to have a really clear focus of who your future customer is. That is the center of your strategy. It’s not to say that customers today don’t matter, but the future customers are where you need to be oriented, so you can take on that tough paperwork today.
Again, I realize that not everybody in your audience is focused on the customer in their daily job. But I think everybody in an organization needs to be aware of who that customer is. Even if you’re in finance or HR, where you don’t see them, you’re still oriented toward them.
Halelly: Of course, because the organization’s work is all about that. It wouldn’t exist without the customer.
Charlene: Right. I have a colleague who says, “If you’re not focused on the customer experience, then you’re working on the wrong thing.”
Halelly: I like that.
Charlene: You have to always understand that. The further out into the future you can look, the more disruptive you will be. If you’re only looking up to the next quarter, you’re only going to orient your work toward the next quarter. If you’re thinking about what your customers are going to look like in five years and the investments you work on today will have their impact five years from now. That’s the key difference, I think, between disruptive organizations and ones that are not. They are making the investment today in that future company. That’s strategy.
Then leadership is simply, “You’ve got to create a movement.” Because it’s so difficult to go through this process that you need to create a movement that will sustain everybody in your organization through all those tough times. Because you as a leader can’t be there all the time, and especially I think for the people who are listening to this podcast, because you’re not at the very top, how do you create movement? You create a movement based on where you are and on the objectives that you have to create. I love Simon Sinek’s “Start with Why.” Why are we doing this? Why are we taking on this tough work? It’s because we’re trying to build the future for our customers. And when people understand that and you repeat it to them all the time, not just every once in a while but every time, then you have a fighting chance of actually achieving that. Because otherwise people would just focus on the work in front of them.
The third area is culture. We talked a little bit about that. There are two types of cultures, ones that are stuck and ones that can live and thrive in what I call flux. They tend to actually do better, they get stronger, the more that they go through these changes and obstacles. They lean toward it. And there are three beliefs of these flux cultures. They’re open, they believe in openness and transparency. Again, what I talked about the information, the decision-making flows, being much more open and transparent to everybody in the organization. That creates trust. If it’s an agency, if each person is viewed with the ability to control their destiny and outcome. That creates a sense of ownership. And the third one is a bias for action. Organizations that thrive in flux can’t stand still. They go, “Let’s do Option A or Option B. I don’t know which one it is, let’s try Option A. If it doesn’t work we’ll try Option B or maybe Option C.” So they’re not going to stand still.
Those three beliefs create this create this great culture and you embed it in your structure, your process, and very importantly in what I call lore: the stories, the rituals, the symbols that help hold that culture in place. So that strategy really shifts the culture in a quick nutshell of how that changes with disruption.
Halelly: And I know, as a fellow author, I know it’s so hard when you have a robust message to condense it. There’s so much more, I’m sure, that you would want to say about each of those. Thank you for giving us such a broad, high-level overview. I know that you have so many different examples from your interviews and from your research. I’d love for you to kind of breathe life into one, maybe two, leaders that you’ve seen that you can tell us a story of who really are disrupters? I’d love for us to envision what a disruptive leader is like.
Charlene: This is a woman, Mala Sharma, who is the product manager for Creative Suite at Adobe. Adobe went through this huge transformation about five years ago where they went from product software to software in the cloud. Huge transition. She was the person tasked with carrying this on. Adobe, when they began this in 2010 or 2011, she was responsible for basically in the end about $2 billion of business out of $3 billion. At one point she said, “I felt like the weight of the company was on my shoulders.” It really was, in some ways. The product managers got tasked with this job, like, “Oh, we have a new idea. We think we should do this.” Interesting thing for Mala was that nobody wanted this. The customers definitely didn’t want it. The employees knew that everything would change so they didn’t want it, and very importantly, they were facing this story they’d have to tell Wall Street that their revenues and income were going to go down for two years before they’d see a turnaround. It would take that long for the revenue, they used to be able to recognize revenue up front. Now they’re going to have to recognize that same value over two years. It takes 24 months for this to work through.
She had to make sure not only was the product working, but the communities were working outside of that and the employees were turned around. She worked with the CFO and Investment Relations team to make sure that was happening too. And she’s a product manager. She really had to dig deep, figure out how to do this, and systematically went though all of this and was dodging and turning huge change. Just to give you an idea, they were so ready for this – people say all the time, “We can’t do this because our investors would never take it. They would never accept us making this change,” and yet that’s what Adobe did. They went to Wall Street and said, “We’re going to make this change. This is going to be really good for our future customers and this is why. Which is great. The bad news is, it’s going to take us 24 months.” Every quarter, they’d come back and say, “This is great news. We are right on track. Our revenues are down, our income is down. Isn’t that great?” And their stock prices go up every quarter. It just always went up. It never went down. It was interesting, because what they were doing is setting expectations. And Mala was the first who had to go back and hit that every single quarter. This is not somebody who just thinks up the great ideas, but can also execute over years of making this happen. I love the example of how this is an entire organization that did all of this, but I think in many ways, Mala is somebody who exemplifies what that looks like. It wasn’t just her. She was in many ways a person who was leading a very crucial part of it, but she built this huge coalition across the organization to make this happen.
Halelly: Great. That’s how she was able to do it. She didn’t have to go it alone, it’s partnering up with others and convincing them and getting them into that movement, as you said.
Charlene: Yes, exactly.
Halelly: Love it. I would really be interested in hearing a lot more about this, but as you know, I have created a 30-minute podcast, so time is running out. I want to make sure we always leave our TalentGrowers with one specific action. Before we do that, what’s new and exciting on your horizon? I imagine you’re in book marketing world now.
Charlene: I am in book marketing. I’ll share with you one idea that’s kind of a crazy idea. I want to create lots of different ways for people to understand the book, so you can read it, you can listen to it, read it on your Kindle and other tablets, but I also want to create videos and I want to create a Snapchat version of the book. What does that look like, right? I don’t know. But it’s one of those ways, and I’m thinking about how do people actually learn new ideas? Where do ideas come from? How do they absorb them? I realize that people learn in many different ways, so sometimes it’s videos, sometimes it’s experiential, and I figure just with something fun, I like playing with all these new technologies to say, “How do we tell stories in different ways?” I know we kind of poo-poo Snapchat as this kind of young person’s tool, but I feel like young people, I want to reach them too as well. How do I use Snapchat in an interesting, engaging way to get the ideas across? I shouldn’t have make them come to me, I should go to them.
Halelly: I like it. So you’re disrupting your own book launch! You know the young people, they are the future, they are the leaders coming into organizations. They are the leaders that are going to be the ones serving those five years from now customers.
Charlene: Exactly. That’s one of the reasons I’m starting a network of these disrupters, an actual network. I think being a disrupter is a very lonely task. The idea is to connect these disrupters to each other so that they can meet online, have discussions, maybe even form small circles over a course of a year for a disruptive activity, or maybe in person, connect with each other, and create this collegiality between disrupters. I think there’s a need for us to create this change, not only in our organizations, but also in our communities and in society. There are so many problems out there in the world. We need more effective disrupters. Disrupters who can create that exponential change. I think that people, especially the young people see the opportunity for that, but don’t have the skills and the knowledge. They don’t have that leadership practice of how do I actually create this change that I think needs to be done?
Halelly: And they may not have the right mentors around them or people who can encourage them, rather than discourage them, so they can find that in your network that you’re creating.
Charlene: Yes.
Halelly: Nice. I love it. I would really like to learn more about that as it’s coming out. So, what’s one specific action that our listeners can take today, tomorrow, this week, that can help them upgrade their own disruptive leadership skills or whichever angle you’d like to take on this?
Charlene: The one thing I encourage listeners to do, the one thing and the only thing that really matters, is to focus on your future customers. As yourselves this one question – who are your future customers? What do they look like? What do they feel? What do they look like? What do they say? What do they do? And really work on trying to identify who that person is. Stand in their shoes. Because until you do that, you can’t answer the next question, which is what kind of experiences do they want to have? What kind of relationship? And then the third question is, what do I need to do today to build that experience for them? It all starts with a really clear definition that you and your organization, your team, have of who that customer is. Spend some quality time trying to figure it out and even if it’s just an inkling of an idea, just do it. Go and find those customers. They’re there today, I bet. Do what you need to do to find them, listen to them and pull up that vision of who they’re going to be.
Halelly: I know that you probably need a lot more time help us really walk through this, but is there some kind of a quick exercise or a question that you use to help people figure that out? I think that it’s easy to say, “Who is your future customer,” but how the heck do you know?
Charlene: This is one idea in the book, it’s really powerful. It comes from IBM and designed thinking. It’s to create an empathy mask. Take an idea of a person that you have, but don’t define them by just a role. Think about the problems they have. Think about these things. Describe how they feel, how they think, what they say and what they do. That gives us a deeper picture of who they are, more than just a title, role or industry. You’re getting to know who they are as a person. Trying to understand that whole person. Because when you understand how they’re thinking about a particular situation, then you can have a better sense of being able to stand in their shoes. And I think the other key piece of the advice I’d have is bring customers in and create a customer advisory board. Don’t put your best customers and biggest customers on there. Put the most demanding customers on that board. It’s so important, especially for people who do not see the customer every day. You hear from customers, you understand who they are today, but also how their emerging needs are coming up. So think about creating a huge organism that just listens and senses emerging customer needs. You do need everybody in the organization to be able to understand, “Wait, there’s this new thing that is happening here.” And instead of thinking of that person, that customer, as an oddball – as we don’t serve them – be curious about it. Let’s try to answer that question. Let’s try that need, because that may be an indication of a future emerging need that we should take a closer look at.
Halelly: Nice. Great. Charlene, it’s been really a pleasure speaking with you today and I enjoy that you have challenged us to think more broadly and more long term and inspired us to create a movement. I know people are going to want to learn more from you and about you. What are the best places to find you online?
Charlene: You can find me at my website, CharleneLi.com. And pretty much all social media is under that name also too. You can find me wherever you look for my name.
Halelly: Awesome. And also it sounds like maybe on Snapchat! Which I have not tried yet. I’ll of course link to your books, Amazon page, and I hope that we can hear more from you as that all develops and the network grows. Thanks again.
Charlene: All right, thank you!
Halelly: All right TalentGrowers. I appreciate that you’ve listened so far, and I hope that you got lots of value. I’d love to hear what is your biggest takeaway from this episode, and what would you like me to cover in future episodes? I hope that you take action of course. As always, I tell you that great new ideas and learning is good, and inspiration is great, but action makes change. I know that in this episode Charlene was talking about inspirational type of change, but she said that bias to action is what’s most important. I challenge you, take action. What are you going to do as a result of listening to this episode that’s going to help you become a more disruptive leader? Let me know. You can put comments in the show notes page. You can send me comments on social media posts that I have for this podcast episode. You can leave me a voicemail on my website using that little black tab on the right of every page, whether you’re looking at it from your computer or mobile device. And I look forward to hearing from you. Thanks for listening. I’m Halelly Azulay, your leadership development strategist here at TalentGrow and this has been another episode of the TalentGrow Show. Thank you and until the next time, make today great.
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