Master of Business Transformation

Following our previous post in which we introduced the Business Model Compass™ and the Cycle of Disruption™, we like to propose an antifragile counterpart of the Master of Business Administration (MBA): the Master of Business Transformation (MBT).

ROUNDMAP_4M_Business_Copyright_Protected_2020To explain why we are proposing a transformational-counterpart to the MBA-graduates, let’s recall the Business Model Compass™ (image to the right):

Now let’s focus on two sections, Optimize (fragile/undisrupted) versus Transform (antifragile/disrupted) and consider the following statement by John P. Kotter, Emeritus at Harvard Business School:

Any company that has made it past the start-up stage is optimized for efficiency rather than for strategic agility—the ability to capitalize on opportunities and dodge threats with speed and assurance.

And add this statement to the words spoken by Margaret Heffernan, a former CEO of five businesses, author of five books in which she explores business and effective leadership, and a part-time lecturer at the University of Bath School of Management in England:

In an environment that defies so much forecasting, efficiency won’t just not help us, it specifically undermines and erodes our capacity to adapt and respond.

Now let’s have a look at the traits of an MBA-graduate:

The role of ‘business administration‘ refers to ‘the bureaucratic or operational performance of routine office tasks, usually internally oriented and reactive rather than proactive. Administrators, broadly speaking, engage in a common set of functions to meet an organization’s goals.

It isn’t difficult to see that the MBA-graduate is most likely to be a fish-in-the-water in the Optimize state. Nor is it hard to see when the MBA-graduate will start to lose control: during the Change and Transform states ─ despite their futile efforts to regain control by reinforcing business procedures.

How is this relevant today?

ROUNDMAP_4M_Disruption_Cycle_Copyright_Protected_2020
The Cycle of Disruption™

Ok, now let’s also recall the Cycle of Disruption™ (image to the right):

The Cycle of Disruption™ reads like this: technological innovation leads to technological disruption (Schumpeter, creative destruction; Christensen, disruptive innovation) which leads to social disruption (f.i. strikes, unemployment, and the rise of countercultures) which demands social innovation (f.i. new regulation and re-education).

Ever since the introduction of Intel 4004, generally regarded as the first commercially available microprocessor, we’ve witnessed an acceleration of technological progress, peaked in value on March 10, 2000, ending in the .com bubble. Schumpeter, who introduced the concept of business cycles, was convinced that creative destruction (or disruptive innovation) was the sole driver of economic growth.

Despite the economic crisis in 2007/2008 (largely attributed to a dramatic re-introduction of mark-to-market accounting from the 1930s), the number of businesses that disrupted the marketplace has grown exponentially:

  • Google ─ disrupting Yellow Pages
  • Netflix ─ disrupting Blockbuster
  • Apple iPod ─ disrupting SONY’s Digital Walkman
  • Apple iPhone ─ disrupting many industries, amongst with Kodak
  • Uber ─ disrupting the taxi-industry
  • Airbnb ─ disrupting the hotel industry
  • Amazon ─ disrupting the book-industry, and market and distribution orchestration in general
  • Facebook – disrupting the ad-industry

The list is endless.

Therefore, it is by no means an overstatement to say that disruption has become the norm and no longer the exception.

Today, most businesses find themselves either being disrupted or disrupting others, in such a complex market that, according to Margaret Heffernan, ‘experts and forecasters are reluctant to predict anything more than 400 days out’. Heffernan concludes:

If efficiency is no longer our guiding principle, how should we address the future? What kind of thinking is going to help us? What sort of talents must we be sure to defend? In the past, we have been thinking about just-in-time management, now we have to start thinking about just-in-case ─ preparing for events that are generally certain but specifically remain ambiguous. This means we have to plan for events that might not occur, which isn’t efficient but it is robust.

This made me think: if MBA-graduates excel under fragile circumstances, in which standardization and planning prevail over experiments and improvisation, what graduate is going to help firms rebound when their products and services are no longer relevant and they need to rethink their entire value orchestration process?

I couldn’t think of any, despite Kotter’s efforts to scheme change into the MBA-practice. However, some universities do now offer master-degrees on innovation and transformation, so, I believe the antifragile-counterpart of the MBA, the antifragile hero if you will, could be the Master of Business Transformation (MBT).

I believe resilience is a pre-requisite for antifragility (agility is a part of antifragility), needed for a business to transform.

Resilience is the power or ability to return to the original form, position, etc., after being bent, compressed, or stretched; elasticity; the physical property of a material that can return to its original shape or position after deformation that does not exceed its elastic limit; an occurrence of rebounding or springing back; a movement back from an impact.

Contrary to the ‘natural’ response of an MBA to combat disruption ─ to try to regain control by reinforcing business procedures and thus limit the capabilities to break away from digression ─ the MBT needs to raise corporate and individual responsiveness with which the business can respond quickly and effectively to threats and opportunities by introducing multiple scenarios that will not only increase its survival-rate but also determine which products, services, and capabilities will help the business to rebound and thrive in the future.

Antifragility is a property of systems that increase in capability to thrive as a result of stressors, shocks, volatility, noise, mistakes, faults, attacks, or failures. It is a concept developed by Professor Nassim Nicholas Taleb in his book, Antifragile.

However ─ keeping my study as a non-executive board member in mind ─ most business executives today are risk-aversive while shareholders hunger for dividends. Consequently, the narrow-focused and ignorant outlook executed by MBA-graduates will impede the resilience a business needs to have to rebound from waves of disruption.

So, what does the future MBT-graduate need to master?

Next to several business universities, others are now offering certification programs. In essence, the ROUNDMAP framework is a pretty good starting point as well. Our program aims to increase commercial outcomes by focusing on the level that is most closely connected to the market: the customer lifecycle. Customer Intelligence is the most likely source to tell the business where to go. All we need to do is select the new areas in which we can offer the most value and are most likely, based on our current capabilities, to compete sustainably in the future.

While perceiving the ValueHub™ Formula, there is yet another way of looking at it: the MBA-graduate excels in the Business-to-Customer Dynamics (left, cost-related), while the MBT-graduate excels in the Customer-to-Market Dynamics (middle, performance-related):

ROUNDMAP_Formula_Copyright_Protected

Any suggestions? I love to read them!

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