home Disrupt the Disrupters Why “management inertia” is your biggest threat! Interview with Karen Moses

Why “management inertia” is your biggest threat! Interview with Karen Moses

Margot Cairnes, change visionary and leader, talks candidly with Karen Moses, former COO and head of strategy for Origin Energy, about the impact of digital disruption on Australian companies. 

Karen is currently Chairmman of Sydney Dance Company, and director of Charter Hall, Orica, Boral, State Super Trustees and the Sydney Symphony Orchestra. She is also on the Finkel panel setup by the federal government to review the national energy market.

Karen’s experience in the energy industry and the wide portfolio of companies she works with, gives her a comprehensive overview of the impact of digital disruption.

What’s the biggest risk from digital disruption?

Karen sees the biggest risk to companies are leaders who are suffering from “management inertia”, Because they grew up in an industry doing business in a certain way they tend to put on their blinkers and see all the reasons why something couldn’t work. They are stuck in their ways and find it difficult to change their mindset and develop new business models.

Change will come regardless of whether these leaders change their ways and mindset. Karen says, “Any industry that connects process, people and customers is going to fundamentally shift due to our capacity to connect data and create insights from it”.

She gives examples of quarries changing the size, spacing, and heaviness of material instantly in response to customer feedback; warehouses set up around baskets of customer products (as against who made those products and traditional product groupings) and shopping centres deciding on rent, cleaning schedules and shop layouts based on customer data.

To overcome the challenges posed by digital disruption, organisations need to derive insights from their customer data and act on it to develop new business models. Those that can’t or won’t, will fall by the wayside.

Challenging existing business models

Karen sees that the role of non-executive directors is to bring an inquiring mind and challenge existing business model.  They need to make sure enough resources are allocated to innovation and new concepts are receiving sufficient board time. It requires the creation of organisational cultures that foster risk taking and wet an appetite for letting go of the old and shelving concepts that are unlikely to work.

Can customers disrupt industries?

Customers, as well as new processes and competitors, can disrupt industries, according to Karen. In fact, they’re the ultimate factor in driving disruption. In the energy sector, it is the consumer who has created disruption (supported by government subsidy) through taking control of their own energy use and installing solar, heat pumps and using energy efficient appliances.

In the finance sector technologies such as Blockchain are predicted to reduce costs by 50% of costs which will make a huge number of transactions and intermediaries redundant – seeing the disappearance of many firms and jobs.

What’s the role of the customer experience in driving disruption and innovation?

Karen encourages leaders to ask themselves and their people the following questions:-

  • What measures of customer satisfaction are you making visible?
  • Are you reporting these to the Board?
  • How are these measures acted on?
  • Do you have a Chief Customer Officer?
  • What is the visibility of the net promoter scores?
  • Is your culture a manufacturing mindset or a customer engaged mindset? When did you last bring customers on site?
  • What is the real evidence that customers matter?

The real test however is, “Do you know what activity is anticipated to shift customers’ expectations and can you deliver it in advance of the customers knowing they need it?”

Margot Cairnes

Margot Cairnes is fascinated by digital disruption. An expert in rapid complex discontinuous change Margot helps individuals, teams, whole companies and communities harness the energy of change. Margot suggests that if you aren’t being disrupted you will soon be disrupted. The only sensible way to deal with change is to create it.