Agile Businesses: Edward Wilson-Smythe Of AlixPartners On How Businesses Pivot and Stay Relevant In The Face of Disruptive Technologies
An Interview With Fotis Georgiadis
Acknowledge and internalize that what got you here will not get you there. We need to rethink our mission, our business objectives, our customers, our partnerships and how we create value. This was a key learning from a large airport client of mine, that had historically been led by construction and government leaders, with a focus on capital projects and funding arrangements. Not surprisingly, they were the worst rated airport in their region in 2003, with the distinct ignominy of running out of deicing fluid towards the end of a northern winter. Their technology relationships were also based on turn-of-the-century models of technology being the back office. New executive leadership team that included outsiders from a range of consumer-focused industries reimagined the airport’s purpose as a preferred destination for passengers, a hub of commerce, a community for workers and a catalyst for regional growth. They worked closely with technology companies to define and implement innovations in airport operations, customer experience and transport connectivity. The airport was the best rated airport in North America in 2016–2019 as a result of these innovations.
As part of my series about the “How Businesses Pivot and Stay Relevant In The Face of Disruptive Technologies”, I had the pleasure of interviewing Edward Wilson-Smythe.
Edward is a Director in the Digital Innovation practice at AlixPartners, a global management consulting firm. In this role, they help clients to harness the power of innovation to drive sustained competitiveness, superior business results and improved social outcomes by means of the definition and execution of digital innovation strategies, integrated solutions, and innovation partnerships. In their more than 20 years of experience, Edward has worked at with leading management consulting firms such as PwC and Kearney and has led digital consulting practices at Gartner, Avasant and NTT DATA. They are a prolific author and speaker on harnessing ethical innovation for the common good, Head of Research at TechPACT, an organization committed to driving equity in technology, and co-author of the Amazon bestseller Digital Singularity: A Case for Humanity.
Thank you so much for joining us in this interview series. Our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
I spent several years after earning my MBA not knowing what I wanted to do or what I was passionate about. While many of my contemporaries were pursuing impressive careers in consulting or finance, I was trying my hand at stand-up comedy and club promotion in Amsterdam and Toronto, while dabbling part-time in working with start-ups on strategy and funding pitches. As a result, my career was anything but planned in its infancy.
My initial work as a management consultant was in the area operations strategy and improvement, which became increasingly intertwined with technology as technology became more and more integral to business strategy and operations. This created a growing interest in technology and its impact on business, leading increasingly from the peripheries of technology decision-making to working with disruption and innovation as the core of my work in the last decade or so.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what
Did you hear about the time an MBA, a stand-up comic and a club promoter walked into a data center? No, seriously, the worst gaffe to date was at a meeting with an ecommerce startup that had hired me to prepare a prospectus to raise capital for an ecommerce transaction processing service based in the Caribbean. Part of the document contained diagrams of the physical location, architecture and connectivity of the systems, in the days when external connectivity was shown as lightning bolts. I still remember looking at one of the diagrams and exclaiming, “oh, that is great, we are showing that our data centers are waterproof because of all the hurricanes!”. Everyone stopped and looked at me, and the founder started laughing only to be joined in laughter by the others. That is how much of a newbie I was to the technology world slightly more than 20 years ago!
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?
There have been many exceptional companies and professionals that I have had the good fortune of working with, but the work at Avasant with CEO Kevin Parikh was perhaps the most meaningful and impactful on my journey. We did great work consulting on technology innovation and digital transformation, and purposefully ensured that social and environmental impacts were integrated into the core of what we did. Kevin gave me a wide berth to experiment, break things and put new things together, and protected me when people threatened by change, both inside the firm and some very senior people in three very large technology companies, pressured him to remove me from my role.
The realization that it is possible to drive broader social benefits through consulting, to put people first in all decisions, and to push back against much larger incumbents based on values and principles, was an eye-opener for me. This experience has driven me to push the boundaries in reconciling growth with equality, people with profits, and economics with environment, at work and in my personal life.
Extensive research suggests that “purpose driven businesses” are more successful in many areas. When your company started, what was its vision, what was its purpose?
AlixPartners has worked with clients around the world for more than forty years, helping businesses respond to challenges when everything is on the line — from urgent performance improvement to complex restructuring, from risk mitigation to accelerated transformation. Our purpose is to enable decisive, informed, and often urgent action, when it really matters.
We measure our success in real terms — by the results we deliver, not just the advice we give. We work shoulder to shoulder with our clients to ensure the work we do is completely integrated with their vision, culture and formula for success. We don’t make recommendations and walk away — we stick around until the job is done, and are accountable for a practical, sustainable outcome designed not just to help our clients succeed today, but to leave them ready to build on that success in the future.
Which technological innovation has encroached or disrupted your industry? Can you explain why this has been disruptive?
Rather than a single technology, it has been a consistent and ever-accelerating parade of innovations. The common theme across these innovations, going back to the early-1990s, is that technology has moved from the periphery of the business to being critical to competitiveness and sustained profitable growth. As a result, the focus has shifted from optimizing technology costs and managing reliable services, to harnessing technology innovation to create new business models, develop better products, understand customers better and improve how customers experience our brands. An equally important trend is the need for collaboration between various technologies and between different companies in different industries to provide superior capabilities to our customers.
Being able to apply innovation to new business models and new ways of engaging customers, while at the same time creating collaborative ecosystems that can effectively mobilize these new capabilities, is what is driving disruption and determining which businesses stay relevant.
What did you do to pivot as a result of this disruption?
This is where my previous meandering and taking things as they come was turned on its head. In mid-2012, I made a deliberate decision to focus my career on defining new ways for companies and governments to understand and harness technology disruption. At that time, I was part of the Sourcing practice at Gartner, which focused on traditional IT outsourcing and offshoring strategy, contracting and execution. I worked with my team, especially a trusted colleague Rehan Qureshi (who has since gone on to leadership roles at AWS, Google and Confluent), to shift the focus on our work away from traditional sourcing topics, and into helping clients define strategies to transform their business based on new technologies.
At the start, it was something as simple as building in infrastructure and application modernization into the overall services strategy, which sounds quaint today but was radical ten years go. That evolved to working with clients to reimagine their business operations and identifying new business and technology capabilities, along with the services relationships, that would deliver the desired business outcomes. In two years, by the time I left Gartner, the vast majority of our work was related to what we now call digital transformation strategy and enablement. The rest of my career since then has continued this journey to embed technology innovation at the core of business strategy.
Was there a specific “Aha moment” that gave you the idea to start this new path? If yes, we’d love to hear the story.
There is a very distinct 2-hour period that marked the inflection point in my journey. I was invited by Nikhil Zaveri, who was responsible for Wipro’s Analyst Relations with Gartner, to deliver a keynote and judge a competition at the Sales leadership meeting of Wipro in March 2012. This visit also included meetings with a few of their executives and their growth strategies and a meet and greet with their CEO TK Kurien. It turns out that TK and I are alumni of the same college in Delhi and had similar runs-in with authority figures as undergraduates. What was supposed to be a cursory 15-minute meeting turned into a 2-hour free flowing discussion.
At some point, still being stuck in my traditional IT services mindset, I asked, “so Wipro plans on succeeding by standardizing and automating the 70% of business processes that it can”, and TK looked at me and said matter-of-factly, “no, I am interested in differentiating on the 30% that cannot be standardized”. That led to a us scribbling down on napkins what it meant to ‘differentiate on the 30%’, including how business value is created, how technology companies can make high-margin revenues, how revenue models need to move from people to products, and how effective innovation requires a collaborative partnership with each partner having strategic and financial incentives aligned to the same set of business metrics. I walked out of that meeting as if I had a spiritual experience, with an almost missionary zeal to manifest the ideas we had discussed and scribbled down.
So, how are things going with this new direction?
In the truest meaning of the Chinese proverb, I have lived in interesting times! At one level, the progress over the last decade in driving technology innovation has been faster and more impactful than I could have imagined. Some of the concepts discussed at the meeting with TK have been formalized and even trademarked, and applied to large clients to help with complex strategy and transformation initiatives. The biggest progress has been in moving from technology being applied as an enabler of business processes to technology being seen as the driver of new business models and new ways of doing business.
The best part of the last decade has been the ability to work both in management consulting firms and a very large technology company, and advise both creators and users of technology innovation on their growth and transformation journeys. Of course, this progress has been as much because of supporting environments as despite pushback and challenges; addressing the latter has been equal parts exhilarating and exhausting.
Can you share the most interesting story that happened to you since you started this pivot?
Finally, we can talk about the very senior people from very large technology companies who wanted to get me out of the way! Each of these was related to me advising clients on growth strategy based on leveraging technology innovation, and large technology companies and some of their leaders being unable or unwilling to change time-worn ways of doing business that had led to success in the last two to three decades. One leader went to the trouble of writing a letter to the CEO of my client outlining not only that they were not going to compete for the business but that the partnership was so poorly structured that no technology company would do business with the company. The second leader complained to a Partner in my firm that I was giving clients bad advice that was contrary to consulting templates (developed in 2008!), which I found out about after I was inadvertently copied on an email escalation to the CEO (note to anyone driving disruptive change: legacy managers love escalations!). The third leader accused me and my firm of colluding with a competitor to disadvantage his firm, as the competitor was about to enter the partnership with my client.
The lesson from these experiences is that despite the pace of change, there are enough people in the technology industry who are reluctant to change and focused on perpetuating old ways of doing things that they are comfortable with. The heavy-handed tactics come not from a position of strength, but rather fear, since they know that their knowledge and skill set no longer are in demand outside their current firm. With this realization, I have learned to be less worried and carry on, focusing on defining tangible business value and aligning with leaders who are committed to change.
What would you say is the most critical role of a leader during a disruptive period?
Articulating a vision of the desired future state, defining the principles that will guide the journey to that future state, identifying the key strategic or operational pivots that will be necessary, and giving people a clear view into how this journey impacts and benefits them. Ok, that is four roles, but in the spirit of complex run on sentences that work better on the other side of the Atlantic, can we agree to call this one concept?
When the future seems so uncertain, what is the best way to boost morale? What can a leader do to inspire, motivate and engage their team?
Leaders need to go beyond clear articulation of the vision, tangible steps and benefits mentioned earlier, to purposefully create opportunities for people, and provide people with the resources and an environment where they can benefit from these opportunities. People who benefit from this process early will become the champions of change and infuse the rest the organization with enthusiasm for change.
At the same time, there will be people who are impacted negatively by change, who have trouble adapting new business models, operating models, processes, technologies or culture. It is critical to treat these people with respect and ensure that they are provided opportunities for learning new skills or taking on new roles.
Leaders also need to be cognizant of the fact that every disruptive change will have its naysayers, who will try and slow down or stop the change. Now, this may sound controversial, but sometimes the best way to address this dynamic is a deliberate, planned and well-explained separation, especially for executives or other senior leaders who are visibly impeding process. This should not be taken lightly, but I have never seen a company go through disruptive change without at least one executive parting ways for this reason.
Is there a “number one principle” that can help guide a company through the ups and downs of turbulent times?
Focus on the north star of the desired future state, what the business looks like when this future state is achieved, and what benefits that provides for all stakeholders.
Can you share 3 or 4 of the most common mistakes you have seen other businesses make when faced with a disruptive technology? What should one keep in mind to avoid that?
The most common mistake made by businesses and leaders, including the three instances of leaders trying to stop change mentioned above, is believing that they have the ability to stop or slow down the impacts of technology innovation on their business. A related mistake is assuming that if they slow things down for long enough, the innovation will pass them by, thus taking a “this too shall pass” approach. The reality is that pace of technology change, the permeation of technology trends into the public consciousness, the impact of technology on business capabilities, and increasing competitive pressure from both traditional competitors and new business models, make this approach untenable and a recipe for failure.
A related mistake is businesses and leaders trying to apply traditional planning and execution approaches to disruptive change. For example, traditional technology initiatives executed by corporate IT departments are capital intensive, have long planning and budgeting cycles, focus on improving current processes, and take 24–36 months from start to end. This approach makes no sense in a world where technologies especially related to data, communications, experience and commerce have lifecycles of less than a year, where competition is using disruptive technologies to reimagine their businesses, and where customers expect new features and enhancements to be rapid and seamless. We are seeing a shift towards decentralized innovation planning, zero-cost gain-and-risk share partnership models and rapid release cycles that address these challenges. However, even today, this outdated thinking is the number one contributor to initiative failure, which experience shows us has been the historical outcome for two out of every three technology initiatives.
Another major mistake is focusing on technology innovation for the sake of innovation, without a clear definition of how any of this impacts the business. We see examples of companies investing in marketing automation or commerce portals or customer platforms or dynamic offers, with little consideration of how these will serve customers better or impact internal operations. Worse, businesses fall into the trap of following the herd and investing in the hype of purportedly breakthrough technologies, almost out of FOMO. Large companies have invested in blockchain, artificial intelligence and the metaverse, without a clear understanding of the concepts or a clear view into how these technologies can serve business needs. Worst of all, following the hype leads to companies ignoring immediate and tangible business benefits possible from more pedestrian approaches such decentralized data, real-time data operations, augmented reality and decisions at the edge. First mover advantage works only if the first move leads to an advantage.
Ok. Thank you. Here is the primary question of our discussion. Based on your experience and success, what are the five most important things a business leader should do to pivot and stay relevant in the face of disruptive technologies? Please share a story or an example for each.
I suppose that is a subtle message to me to stop talking in long sentences! Since you asked, here are five things, in a structured list:
- Acknowledge and internalize that what got you here will not get you there. We need to rethink our mission, our business objectives, our customers, our partnerships and how we create value. This was a key learning from a large airport client of mine, that had historically been led by construction and government leaders, with a focus on capital projects and funding arrangements. Not surprisingly, they were the worst rated airport in their region in 2003, with the distinct ignominy of running out of deicing fluid towards the end of a northern winter. Their technology relationships were also based on turn-of-the-century models of technology being the back office. New executive leadership team that included outsiders from a range of consumer-focused industries reimagined the airport’s purpose as a preferred destination for passengers, a hub of commerce, a community for workers and a catalyst for regional growth. They worked closely with technology companies to define and implement innovations in airport operations, customer experience and transport connectivity. The airport was the best rated airport in North America in 2016–2019 as a result of these innovations.
- Understand where your customers are going to be, and meet them there. Our customers are rapidly evolving in terms of priorities and desires, and we need to anticipate these changes and build organizations that are able to look 2–3 years into the future. Perhaps an example of a company that failed to evolve with their clients will illustrate this point. We were consulting a consumer goods company that is home to some of the most iconic brands but was suffering from low growth and declining margins. Their products, distribution channels and marketing were no longer in line with their customers’ needs or behaviors. Customers were moving rapidly to gaming and immersive experiences and away from physical products, purchasing online direct from the creators instead of from retailers, and relying on messaging and amplification across social media instead of traditional media. One of the responses to this was to create a television reality show on a legacy big 3 channel, with no social media plan for amplification, where people competed to create new physical products, that would be sold exclusively through a retailer, … that had already declared Chapter 11 bankruptcy. Talk about missing the memo!
- Understand how technology changes what you produce and deliver. While companies are becoming more adept at adopting innovation to improve business operations, the reality is that every company is today a technology company. The best example of this are the large automotive, industrial equipment and industrial automation companies, that are moving from selling physical assets to selling connected and automated services, whether these avionics platforms for aerospace companies, autonomous warehouse operations, predictive maintenance as a service based on committed asset uptime, enhanced in-vehicle experience or automated building condition and environment management. Equally importantly, the commercial relationships with customers are changing from large one-time capital purchases to ongoing revenues for the use of product and platforms. These companies see themselves as software companies first, and are working to define products, offerings, go-to-market approaches, and customer engagement across the lifecycle. This pivot has impacts not only on high-margin growth and competitive differentiation, but also on the valuation of these companies.
- Create an organization that is part of the broader innovation ecosystem. This was a lesson I learned relatively, as most of my work had been with large consulting firms that can tend to be insular. In the spring of 2014, I was invited to speak at a technology conference by Robert Brennan Hart, the founder of the Canadian Cloud Council recognized by the United Nations as a Top 70 Global Digital Leader. This event included leaders from government, large corporations, technology companies and civic society, and the potential for collaboration and exponential impact was almost immediately obvious. My previous firm NTT DATA is perhaps the best example in the world of mastering this ecosystem, being a provider of breakthrough technologies, investing $3.6bn a year in innovation, investing in early-stage companies through a venture fund, and working with clients in strategic partnerships to develop and commercialize disruptive solutions. Evidence of this approach can be seen in co-investment partnerships with energy companies for operations improvement and carbon reduction, applying artificial intelligence and robotics to improve medical care delivery, and collaboration with large automotive companies on autonomous, connected and electric vehicle development.
- Ensure that disruption creates benefits beyond corporate results. Disruption and transformation have been associated incredible wealth and progress for a few, and lob loss, displacement and impoverishment for the many. We have seen this in repeated innovation cycles since the 1980s, including the ongoing reset in technology firms. This dynamic has led to America losing 95% of manufacturing jobs since 1970, the increasing disparity income and wealth, and record-low levels of institutional trust. At AlixPartners, we are purposefully building considerations for social impact explicitly into the planning and execution of disruptive change. This needs to go beyond traditional outplacement support and focus on quantifying the negative social impacts of disruption, defining plans to mitigate these impacts, factoring these social costs into the business case for change. I am afraid that we are at a tipping point where large sections of our society irreparably lose faith in corporate and government leaders, and no one wants to live through what follows.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
My favorite quote, which is also tattooed on my right arm, is from the Bhagwad Gita and says in Sanskrit “karmanye vadhikaraste ma faleshu kadachana”, which translates roughly to “you have a right to perform actions, but not to the fruit of those actions”. These words were uttered by Lord Krishna in the context of advising Arjuna on his duties to wage war against evil, even if that meant fighting his own family.
In my life as I drive change and disruption, I interpret these to mean that I have an obligation to do what is right, without being too vested in the results or worrying about negative personal consequences. For the last part, I also take comfort from Psalms 23:4, “Yea, though I walk through the valley of the shadow of death, I will fear no evil: for thou art with me; thy rod and thy staff they comfort me”.
How can our readers further follow your work?
I post on this topic frequently on LinkedIn, and readers can check my profile at https://www.linkedin.com/in/edwardsmythe/.
In addition to my role at AlixPartners (www.alixpartners.com), I am also the Head of Research at TechPACT, an organization founded by technology leaders with a mission to reduce the digital divide and pursue representative diversity throughout the technology community by the end of the decade. The published research can be accessed at www.techpact.org.
I also contribute regularly to C-Suite Quarterly (CSQ) magazine, and my articles can be accessed at https://csq.com/profile/edward-c-wilson-smythe.
Thank you so much for sharing these important insights. We wish you continued success and good health!
Agile Businesses: Edward Wilson-Smythe Of AlixPartners On How Businesses Pivot and Stay Relevant In… was originally published in Authority Magazine on Medium, where people are continuing the conversation by highlighting and responding to this story.