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 Stéphane J.G. Girod.
Stéphane J.G. Girod is Professor of Strategy and Organizational Innovation at IMD. His research, teaching and consulting interests focus on agility transformation, at the strategy, organizational and leadership levels in response to high uncertainty, digital, (de)globalization and other forms of disruption.
His latest book, “Resetting Management” was published by Kogan Page in June 2021.
He directs the Reinventing Luxury Lab and co directs Digital Execution. He directs the Bally, Mazda, Clarins, Telenor and Midea customer relationships. He also takes executive groups on innovation discovery expeditions to China. Professor Girod’s sectoral expertise is in Luxury Goods and Services, Retail, Banking, Automobile and Consumer Goods.
His research has appeared in leading journals such as Harvard Business Review, Organization Science, Strategic Management Journal and Long-Range Planning, as well as in the Journal of Business Strategy and European Business Review.
He writes a column in Forbes.com focused on the topics of innovation and agility in luxury.
His thought leadership has been also covered by the popular press and media, including China Daily, The Economist Intelligence Unit, Womens’ Wear Daily, BBC News, Télévision Suisse Romande, Valor Economico, La Vanguardia, Tribunede Genève, Luxury Society, Handel Zeitung and The Times.
Prior to joining IMD, Professor Girod was a Manager of the Accenture Institute for High Performance, based in London. His consulting projects included international operating model design, luxury goods retail strategy, and the transformation of enterprise IT. Professor Girod also occupied several international development roles in leading luxury goods companies for markets such as France, Italy and the Middle East.
He speaks seven languages. He earned a Dphil from the Saïd Business School, University of Oxford, an MBA from the Helsinki School of Economics (Aalto University) and an MSc from Toulouse Business School. He was also a visiting scholar at Indiana University.
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 had three careers, one in international sales in the luxury fashion industry, one in strategy consulting and one in academia after my PhD at Oxford. The latter is my favorite by far although I can link the three almost daily in my job at IMD. It’s a privilege to help students and executive participants grow and also to learn from them.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘take aways’ you learned from that?
I arrived 30 minutes late at my first session with the MBAs back in 2016. All executive sessions start at 8.30 so I assumed it was the same with the MBAs. The lesson I learnt was to always check systematically all logistical details and to laugh about myself in the classroom.
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?
That is true and I realize I am very blessed. I owe a lot to four teachers. One was the school mistress in my last year of primary school. Another one was the Dean of my high school who, right after my final exams, told me I was making the wrong move and decided me to reorient to a much better type of institution and curriculum. I also owe so much to my two PhD supervisors. In addition, I am incredibly grateful the management of IMD and to my partner, who is the type of partner every individual should pray to have.
Ultimately, it’s up to each of us to link the different opportunities we have with each other to become a better individual and professional. The greatest ability in life is to listen well.
(By the way, I love your questions — you think outside the box!)
Extensive research suggests that “purpose driven businesses” are more successful in many areas. Do you think this is true? Does a company need a vision and purpose?
My new book, “Resetting Management” with Martin Králik focuses on how to transform for greater strategic, organizational and leadership agility. We demystify what business agility is and provide insights into how to approach that type of transformation effectively.
One key counter-intuitive finding is that agility is about reconciling competing demands, such as the need to experiment fast on a continuous basis but within a frame for stability where a strategy can be delivered with accountability and attention to performance and results.
One of the principles of organizational agility is about purpose, a clear sense of direction that senior leaders need to give to empower employees working in cross functional teams working around customers. It’s like defining the direction and let employees discover the map for how to get there. If you do not have a direction, you keep looking indefinitely, which is performance destroying.
This purpose should be inspiring enough, precise enough but broad enough. It should be easy to remember for employees and tell something very specific about the customer benefits and pain points employees should focus on. One great example is ING Bank’s purpose statement: “We focus on being clear and easy, anytime, anywhere and empowering customers to stay a step ahead in life and business.” This purpose contains four concrete promises to customers that can guide action and deliver strategy with focus without stifling innovation and experimentation.
Too many companies I work with do not have such statements. And if they do, their senior leaders do not spend enough time inspiring employees with it, let alone empowering them to innovate around it. Purpose contributes to empowerment within a frame, it’s one of the pre-requisites for agility.
Thank you for all that. Let’s now turn to the main focus of our discussion. Can you tell our readers a bit about what your business or institution does? How do you help people?
IMD is celebrating its 75th anniversary this year. We are also a vibrant community of more than 10,000 alumni across industries.
We were just talking about purpose. As one of the very top business schools in the world for executive education, IMD’s purpose is “Challenging what is and inspiring what could be, we develop leaders who transform organizations and contribute to society.” I think this tells it all. Our mission is to challenge our participants to create and own their future by helping them to get the best out of themselves in a trusted, learning environment. We are strongly committed to sustainability in what we and our participants do, from the MBA to the EMBA and all executive programs. For example, when we engage in transformation journeys with our clients, we never tell them what they should do, but we empower them to find their own solutions. It’s much more empowering and sustainable.
IMD is particularly noted for its curriculums in sustainability, digital transformation, leadership and MBAs and EMBAs. We have a campus in Singapore and are actively growing our Asian business, with a strong presence in Japan.
Which technological innovation has most encroached or disrupted businesses? Can you explain why this has been disruptive?
It depends on the industry. For industrial products where the new standard is to dominate the industrial internet of things, big data and AI are key to competitiveness and futureproofing. In the luxury industries, it’s been digital commerce and how platform players have changed the rules of the game. In automobile, the disruption comes from both big data that will be the key to self-driving cars and the mastery of new engines, whether they are electrical, or hydrogen based.
But we should not see disruption just as a technology. Customers bring their own form of disruption. It’s incredible how the behaviors of traveling Chinese consumers disrupted luxury players in the last decade, forcing them to become more agile by devolving some decisions to the Chinese operations while networking their countries (which were run as silos) to create much more fluid experience for these consumers across borders.
What can leaders do to pivot as a result of this disruption?
As far as technology is concerned, one can pretty see well the picture early in advance, as Steve Jobs used to say. The biggest shift that needs to take place is the determination to act on these disruptions early and to experiment with new business ideas with them. The journey towards agility consists of breaking the success trap (why change if we are so successful?) and at using agile ways of thinking (i.e., launch several small experiments, test ideas, learn, increase financial commitments along the way, kill some projects early enough) to grow next business opportunities. It’s also critical to make sure that the core business is not going to kill the next businesses. The fear of self-cannibalization is real. But my research shows that it is rare: companies that have created pathbreaking ideas out of disruptive forces, like GE Healthcare or Cisco India, ended up creating entirely new businesses.
Can you share the most interesting story that happened to a company since starting this pivot?
Consumer-led disruption, however, is much less predictable. LVMH delivers interesting insights. Next to their formal planning and budget process, that is one of the core strengths of the world’s number one luxury actor, LVMH launched in 2017 a process for issue-based planning called DARE (Dare to Act and Risk like and Entrepreneur). LVMH realized that their formal medium-run planning could not accommodate all the unexpected changes in the consumer world. So, several times a year, they have been organizing an internal competition for business ideas on specific topics such as new consumer journeys, or sustainability or diversity and inclusion, where employees work across Maisons using the lean start-up agile method. Shifting resources for these new unplanned priorities and activating a top-down and bottom-up approach to strategy is LVMH’s way of pivoting and staying agile.
What would you say is the most critical role of a leader during a disruptive period?
It is to create perseverance and inspiration during the transformation. Responding to disruption can be long. Keeping the fortitude, fighting complacency, helping employees to network between the core and the new businesses is key to success.
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?
This is old management thinking. In truly agile companies, employees motivate themselves because they are empowered to experiment and pivot around the customer. Companies like the bank ING and Haier have created entrepreneurial teams and even if you are not in a customer-facing role, you still respond to the customer. Seeing the direct impact on customers satisfaction and on the ability to stay ahead of the competition is by itself a strong motivator.
Senior leaders need to intensify their story telling of the vision and why it matters. They also need to ensure resources move fluidly to support the experiments and futureproof the company.
Is there a “number one principle” that can help guide a company through the ups and downs of turbulent times?
It’s what I call business agility. To embrace rather than ignore or fear uncertainty, companies need to be both nimble and stable, simple and complex. Too many companies are rigid because they are only stable and complex. When disruption strikes, they are rigid. But as much as you want to be nimble, when you are a large company with committed businesses, you cannot afford to be chaotic. You still need to deliver results. And when you have multiple countries and business lines, what fits here does not necessarily fit there. So, as much as you want to create commonalities and eliminate inefficiencies, you cannot create straight jackets. There needs to be redundancies and relevance.
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?
An important lesson from my research is that businesses who are considering the opportunities of a new technology need to make it first relevant in their core business today before they start thinking about future businesses. Siemens was using digital twins and avatars way before it even thought about internet of things platforms. GE however, did the opposite. As a result, it struggled much more to mobilize its employees and management for its digital transformation journey.
Another common mistake is to try to do everything by oneself. Digital technologies require much more ecosystem collaborations than in the past.
A third mistake is to roll out agile methods to accelerate digital transformation focusing mainly on the ceremonies and processes of agile, but without realizing that incentives, rewards, value systems and leadership styles also need to realign. Agile methods rhythm with organizational redesign.
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.
As Steve Jobs said, spot the next big thing early.
Recognize it’s a journey. Sephora, the leading cosmetic and fragrances retailer, started to adapt to the digital customer journey by mastering social media and digital advertising. It added an extra layer by creating the powerful Sephora Communities of customers for peer-to-peer learning. Progressively, it revolutionized the in-store experience by blending a new technological environment to link online with offline. What enabled the company to succeed was the perseverance along one vision: it spotted early that commerce had to become relational and experiential and not stay transactional. Today, it is still holding Amazon at bay.
Avoid consultants: co-create a journey together for using the opportunities of the new technology that is interest for you. At Siemens, the top 100 executives went to CEO Summits to learn about digital, talking to experts all around the world. They wanted to educate themselves and come to a common understanding of the opportunities of digital.
If you are a senior leader and not a digital native, accept that you will not see all the opportunities of a digital technology. Accor, one of the world’s largest hospitality players launched Jo and Joe, a new concept of communal and experiential hospitality for millennials and Gen Z by relying on a team of millennials. They succeeded where the more senior management had failed for two years. This shift requires humility and reversed mentoring.
Creating new customer experiences in an agile way, i.e., by empowering teams to experiment around customers, requires a new leadership approach. Sometimes, it’s the coaching leadership style that will work, not command-and- control. Middle managers at the bank ING have all received lots of training to learn how to create the psychological safety that employees need for experimenting and creating truly omnichannel experiences for customers while holding employees accountable.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
The importance of believing in yourself, be true to yourself to succeed but seek lots of help to become aware of and close your blind spots. Work hard and let go of resentments.
How can our readers further follow your work?
I would suggest a good way is to read my new book Resetting Management, published by Kogan Page. You may want to read my regular columns in Forbes.com. Check out my Twitter and LinkedIn posts or reach out to me via IMD.