In this episode of Partnering Leadership, Mahan Tavakoli speaks with Charlene Li, a Digital Transformation and Disruptive Leadership Expert, Founder of Altimeter, and author of best-selling books, including Open leadership, Groundswell, and her latest book called The Disruption Mindset. Charlene Li discussed how leaders and organizations can embrace and benefit from disruption.
- How leaders can stay focused and energized with the pace of disruptions
- Why organizations should shift their focus to meeting the needs of their future customers
- How leaders can create a movement of disruptors and a culture that will thrive on disruption
- Charlene Li explained how growth could create disruption
- The three beliefs of a disruptive organization
Also mentioned in this episode:
- Steve Sasson, Inventor of Digital Photography (Listen to Steve’s episode on Partnering Leadership)
Books by Charlene Li:
- Digital Body Language by Erica Dhawan
- The Heart of Business by Hubert Joly
- The New Rules of Work by Gary Bolles
Connect with Charlene Li:
Connect with Mahan Tavakoli:
More information and resources available at the Partnering Leadership Podcast website:
Welcome to Partnering leadership. I'm really excited this week to be welcoming, Charlene Li. Charlene is a digital disruption expert, speaker, author. She was founder and CEO of Altimeter, a disruptive analyst firm that was acquired in 2015 by profit. She has authored and co-authored many books, including Open leadership, Groundswell and her latest book, which is a bestseller called The Disruption Mindset. We spend most of our time in this conversation talking about The Disruption Mindset. I also love the fact that Charlene is both truly disruptive herself in her approach to business and her own life. And her personal experience serves as a great example to leaders that want to become more authentic, disruptive leaders.
So I really enjoyed this conversation and I am sure you will too. I also enjoy hearing from you. Keep your comments coming. Mahan@mahantavakoli.com. There's a microphone icon on partneringleadership.com. You can leave voice messages for me there. Don't forget to follow the podcast on your platform of choice. That way you'll be notified of new releases.
And those of you that listened to these on Apple, leave a rating and review when you get a chance. That will help more people find conversations like this and benefit from them.
Now here's my conversation with Charlene Li.
Charlene Li, welcome to Partnering Leadership. I am thrilled to have you in this conversation with me.
So good to be here. Thank you for inviting me.
I love the fact that not only have you written about disruption and disruption mindset, but also much of your own life story, you have lived through and embrace disruption. There are a lot of times that people are more academic authors. You are a practitioner of disruption. So we'd love to first start out though, with your own upbringing and how your upbringing in Detroit impacted the person and a leader you became Charlene.
I was born and grew up my first few years in the middle of Detroit. And as the daughter of Chinese immigrants, it was really hard because there were very, very few Asians in Detroit at the time, and it was a very tumultuous time. There were riots going on. A lot of civil unrest. This is in the late sixties.
And one of the things that I really learned was, again, just even growing up as a young child and as a teenager was, how do I fit in but at the same time stand out? Because as the only person, literally of color of anybody in the entire school and the community. I just was a walking form of disruption. It's just anywhere I went, it was disruptive because people didn't know what to talk to me, whether I spoke English and just was really a different. But that also, gave me a lot of competence to be able to stand out, to be comfortable being the only person in the room. And for years, I was the only person of any particular type. A subset of one.
And I wonder Charlene, if that has had an impact on you being willing to be different in embracing disruption.
It gave me a lot of confidence to stand out and say this is not the path that everyone else is taking, but I see an opportunity and I'm going to speak my mind. I'm going to take some action. And knowing that I had the confidence to be okay with this, that I had done this over and over again, not always succeeding because confidence doesn't mean that I'm confident I'm going to succeed. I became a good level of confidence that I would be okay. And so even taking a risk and failing, maybe potentially insulting somebody or making them feel comfortable, I was comfortable doing that.
And you have been a consistent risk taker all throughout your life, both in your personal activities and also professionally. So you decided to start a business of your own in the last big economic crisis we had back in 2008.
So I had written a book called Groundswell. It was my first book. And at the time I was working with Forrester. A fantastic place to be, but I was going on almost 10 years of being there. And I had run out of things to do, ways to grow. And so I had long discussions with them and I decided to leave to go do something else. I wasn't sure what the something else was going to be.
So I struck out on my own and started a company with no clear plans to necessarily grow it beyond me. And then one thing led to another, connected with three other partners and realized there was a lot of energy behind this whole world of social media and social technologies.
So while the whole world was going through a recession, we were growing like gangbusters because everybody wanted to know how we use social media to accomplish our customer and marketing goals and our business goals. And I had literally written the book on it. So we're in many ways the only game in town and just grew so quickly in 2009 and 2010. Those were just huge formative years for me.
So as you were growing and you were leading that organization, Charlene, how did you encourage your team members, your colleagues, everyone else to embrace disruption and the kind of thinking that you've been advocating as a leader of the organization?
The most important thing is that we focus on culture inside the company. And we wanted to make sure that we had really strong values, what our mission was, which is to help leaders thrive with disruption. And to make sure that again, as a group of highly ambitious professionals that we were taking care of ourselves, but also with each other, because we knew that together, we were going to be stronger.
And then constantly looking for the new trends that were coming out, using design thinking to be really focused on the problems that people had. That this laser focused on what were the problems. Really digging down deep to understand those problems that were emerging. And not resting on our laurels because the minute you stop thinking about the future, that's when you start becoming static and devolving into the status quo. That's never a good thing.
Charlene, I'm hearing from a lot of leaders, a sense of exhaustion with disruption where they feel like they've been running faster and faster, and the pace of disruption is not slowing down. So how were you able to keep yourself energized? And how do you recommend to leaders and individuals as the pace of disruption around us is picking up to stay focused and energized and capable of continually reinventing themselves?
I think change fatigue is a very real thing. And what you find with disruptive leaders is they're able to get re-energized again. First of all, they pace themselves. They know it's a marathon, so they sprint, invest, sprint, invest, push, and then gather themselves and center themselves. And those cycles are very, very quick.
The other thing they do though, is they stay energized by focusing on that future. So for me, it was incredibly energizing working with clients, working with my colleagues on these ideas about the future, knowing that we were making a difference. That feeds the soul. And this is the soul that keeps you going then, to continue to push forward.
If you were just changing and you weren't seeing any impact from it, of course it's debilitating. But when you're seeing you putting so much effort into something and change is actually happening. And the aha moments are popping in all over the place. That is incredibly energizing. It makes you want to do more.
Charlene would love to get your thoughts with respect to how purpose plays a role in leaders being able to handle that pace of disruption. A lot of organizations, team members are wanting to see more purpose in their jobs, in what the organization stands for. How does that in your view, relate to disruption?
Purpose is absolutely essential. It's an essential thing in everything that you do. If you're not clear on why you're doing something, that fundamental underlying, foundational why, then you got to ask yourself, why are you waking up every day? What are you doing and spending so much of your time and day on something if you don't know why you're doing it, the motivation behind it? Is it just simply to make money? That's not motivating enough. There's gotta be a higher purpose to keep you motivated to go on this really difficult world of disruption.
Disruption is incredibly difficult. People think that there's a magic button that's out there. That I've given you my book so you can talk to me. I'm going to give you those magic easy buttons to hit disruption. And it just doesn't exist. And I feel like if we acknowledge how difficult disruption is, how difficult change is, then we're going to be much more prepared for it versus this false hope that, oh yeah, we'll just do this and nudge it a little bit. It'll just roll down the street easily. But it never works that way. If it's worth working for and fighting for, then it's going to be hard.
Which is actually why I appreciated reading your book, Charlene, and I appreciate the content that you put out. There are no magic cures. There are questions that help us think and reflect on disruption and how we can embrace it ourselves and our organizations. One of the things that you say repeatedly that has made me think a lot is that you say disruption doesn't create growth, growth creates disruption. What do you mean by that?
We oftentimes think what is the technology or the innovation that can drive growth? So what's a disruptive thing that we can do to create growth? And when we actually started doing that thing, we realize, oh, we're growing now. Wait a minute. If we're going to do this then growth actually means making all these changes and breaking all of our assumptions, making new agreements really fundamentally changing the way we see the world. And you may not be ready for that.
This is really hard work, as I mentioned before. So that's going to be disruptive. So you back away from that like, oh, I didn't anticipate that much change. That's just too much, we're just drawing the line here so we stopped. So I've seen so many companies have these grand plans go up to the very edge of growth and then realized oh no, no, no, this is too much. We're going to back away from it. Because what happens is the disruptive organizations don't choose to be disrupted. They choose to grow. And they know going right up against that growth edge, they realize, okay, we're at that edge. Now we have to push through it because we want to be on the other side, we're driven by that growth. We're driven by the impact we're going to have. And that of itself growth is our short, disruptive force.
And in order to do that, you mentioned a focus on the future customer. How can organizations focus on that future customer? What are best practices you recommend and you've seen four organizations doing that?
I think the number one thing is to recognize that there are future customers. There are so many companies that would say, "I love my customers. My customers are beautiful. Look at how wonderful they are." And when somebody ever says "What about these customers?” “Oh, they're not our core customers. We have to focus on the core, make sure our most profitable customers are happy."
And so they get blinded by these beautiful profitable customers that they have. And don't actually look and see well, how are they shifting? How are their needs changing? Are there new customers that we should be addressing and looking at? It's not to ignore your core customers, but it's to recognize that they may not necessarily represent your future customers.
If you do the work and you find out, yes, they are our future customers. And we feel like we are going to be able to serve them in the future too, as well. Then by all means focus on those current customers and evolve with them as they evolve. But you have to at least look. You have to at least do the due diligence to make sure that you understand where the markets are heading, where your customers are heading.
And that's why Charlene, I wonder whether that's easier sometimes for startup organizations and organizations that are in the initial stages of life.
I had a conversation with Steven Sasson, who is the person that invented digital photography at Kodak back in 1975. He was with them up to 2000. As the iterations of digital photography became a digital camera, they were able to make the quality better.
Kodak knew exactly what was happening with digital photography. But even by 2003, introducing a film, they would make more money than the potential for digital photography. So there was a struggle between their current customers, requirements of shareholders to bring in money and those future customers that couldn't yet be monetized.
So what are your thoughts with respect to established organizations, continuing the current revenues and loving their current customers yet being able to take a step into that unknown of focusing on future customers?
I think Kodak is a great story because they'd recognized that they had to change. And they were starting to change where they weren't really to invest fully. And frankly, if you look at where they were, it is a question of, could they have pivoted fast enough? Cause there's a completely different business being in the digital photo business. It's completely different. The assets that you had within Kodak just didn't apply to that new space. So in some ways they were really stuck. They would have had to reinvent the company from the ground up versus shifting their business a little bit.
So there are companies who've done this, but even like Netflix when they shifted from red envelopes to streaming, they had at least were using the same content. So it was the same base content and they have the rights and the relationships to be able to leverage that. And Kodak, there was nothing, there was nothing connected between the old and new business.
So the hard part with any business is recognizing what business you are in. You're not in the business of producing films. You're in the business of capturing memories. And I think that was the biggest problem. And they realize that too late.
What business are you actually in? What's the problem that you're going to solve with that customer. And being able to clearly articulate that and know that again, as startups, they have the biggest advantage because they have no cash. They have no brand, they have no customers, they have no scale of nothing. They have nothing except for one huge advantage, they don't have any current customers. They have no installed base to have to worry about. And the established companies have just opposite every single possible advantage in the world. And one huge disadvantage. They have current customers on an installed base.
So it's interesting. Innately and what I see happening is that these large companies are now finally able to see that future customer. To see beyond it, to put on literally, disruption sunglasses so they're not blinded by their current customers. And they're pivoting. They're doing extremely well buying in large, figuring out what that disruption is. And so it makes it even harder for those startups to gain a foothold.
That's part of the brilliance of what you emphasize in your book and in your content. That was eye opening for me. A lot of times I had heard, and I had repeated the importance of focusing on your current customers. If you take great care of your current customers, then you will be okay.
Part of the shift in the mindset that you advocate and that disruptive mindset is that you have to keep your eye to the future on that future customer which is again, easier said than done. It really requires a different kind of thinking and a different approach. In order to do that you say create a movement of disruptors and a culture that thrives on disruption. How do you recommend leaders at organizations actually do that?
I do think that leadership is a relationship between people who aspire to create change. And the people who are inspired to follow them. And it has always been true that it's not connected to a title or a position or budgets. We have leaders meeting from the front line. And people are inspired by their example because they model the way of how to be a disruptor. Even though the front line contributor, they speak up, they say, Hey, I've got this customer need means we should do something about this. You ought to have a product. Oh, we should be doing a different process or something. And they champion that need and that change.
So that change if you multiply that over and over again, it starts becoming a movement. And you need movements to create disruption, because this is really hard work as we've talked about.
And if you are out of the room, how do you know that it's going to continue? You have to make sure that other people are stepping in becoming part of that movement and becoming leaders too as well. And the culture is incredibly important because if your strategy is centered on that future customer, where you want to be, how are you going to get there to that future customer? Then the culture is the engine of that car that goes down that road. And it determines how fast you can go. It's also the terrain. How bumpy is the terrain? How smooth is it? Are you putting in place a structure and the processes so that it's a smooth journey as you go along. Because every organization has elements of their culture that aren't working as well as they could be. And yet we spend almost no time on culture. We just assume it's there. And that is going to work. And we put in this new strategy, the new culture would come along. Well, if that culture is being fed by something from the old strategy, it's not going to change. You have to systematically identify those elements that are holding you back and to change them.
And one of the things I underlined Charlene is there is always a culture in the organization. The question is whether it's intentional to help the organization achieve its strategy and its purpose.
There is a culture. Are you making it intentional? So, to that end, what do you think are the most important aspects of a culture that embraces disruption? And how can leaders promote the kind of culture that is open to disruption?
Because to a certain extent, as humans, we tend to want to do things the way we've done it before. There is a certain inertia that keeps us repeating similar patterns. So what can be done by leaders and in organizations to make disruption and embracing disruption, a bigger part of the culture?
I found three beliefs of disruptive organizations that were common across them. And again, culture is made up of beliefs and your behaviors. It's that simple. Culture is how we describe ourselves by our beliefs and behaviors. So the three beliefs are openness, agency and a bias for action.
Openness means we're going to be showing information back and forth. We're going to be transparent about what's working and very importantly, what's not working because then we build trust and accountability. And if you want to go and do those hard things, you got to know you have to know what's working and not, there's no place to hide. You can't stuff a failure underneath the rug and hope that nobody understands it, sees it. That's not going to work.
You're better off telling everybody this is the bad news, it's not working. And then everybody can come in and say, “Okay, let's try to fix this, let's address this” versus “Hey, everything's working”, but they're not. But I'm not going to be the first person to tell you that this is dysfunctional.
Agency is the idea that every single person thinks about themselves as an owner. And that requires people to feel like, do I need to ask permission? Again, if you have clear openness, you know what the strategy is, what your role is in it to help make that strategy come forward, then you have the agency to go do what you think is right.
And then the third thing is a bias for action, which says you don't have time to make sure things are perfect before we can take action. We're going to take our best guess. We're going to gather the minimally viable data to make a decision and we'll make a decision. And we recognize that 99% of the decisions we make are reversible so we can always go back.
These are really different ways of thinking when you think about leadership. These are very counterintuitive to the way we work. And yet at the same time, they make so much common sense. So of course we would do these things. That's why I think disruption is a natural state for us, as humans. We actually liked change. We also like things to be the same and constant. So the most important thing within the culture I believe is to put in the structure, the processes, rituals, the symbols, the stories that provide you this constantness.
When you have that firm foundation, Then you can go do all the crazy things. But you're not trying to figure out like, who do I talk to about this? What's the process for that? What are the rituals that we do to remind ourselves about our core values and our mission? How do we welcome each other? Say goodbye to each other? These bonds are so important because they provide the stability, that constantness, that supports you in times of change.
And what you're saying, Charlene is simple sounding, but very hard to do. Simple things are not necessarily easy to do. Now, a big percentage of my listeners are leaders, especially in the greater Washington DC region of organizations that are whether government contractors, governmental organizations, nonprofits, quasi government organizations.
Sometimes when they hear these thoughts and perspectives, they say, “This is what companies in technology or Silicon valley need to do. Our needs, our abilities, our structures are different.”
What are some of your thoughts with respect to organizations outside of Silicon valley embracing and being able to have a disruptive mindset and approach to the way they serve their communities and beyond?
Almost every single one of the examples I use in the book are examples of companies outside of Silicon valley, outside of technology. And what we're finding in the research is that you don't need to be a tech company to do this. You just need to be a company that has customers and cares about what customers you want to serve and to know them extremely well.
And if you are driven by a customer focus, a customer centricity, customer obsession. If you truly love your customers, even the cranky ones, even the ones who are complaining all the time. In fact, they're probably your best customers, actually, cause they will tell you the truth of where you are falling short. Listen to them and treasure that because they will help you get better. And this is the reality of business. And we make all sorts of excuses to not hear that truth.
So yeah, I hear it like, “This is a young person's game. I'm too old. We're not in Silicon Valley, so we don't have to think about disruption.” I look at it this way. Why not you? Why not grow? Why not have exponential impact and change? Why wouldn't you want to do that?
I love that Charlene and it's so right on target, they are excuses for us not acting and as individuals and leaders. We all can and have the responsibility to do that.
Now over the past year and a half, we also have been going through an external disruption. I served as board chair of Leadership Greater Washington. And we were going through our board retreat. This is pre-pandemic. And I was telling everyone one of my favorite quotes from Andy Grove, “Only the paranoid survive.”
And even though the organization was doing extremely well, I was paranoid and I wanted to reinvent a lot of the way we were doing things. And a couple of board members jokingly said, “We need to make sure we keep it closely to have one this new board chair, because he's going to ruin all the great things we have built.” There was fear.
Now with the pandemic happening, we were given a free reign to reinvent a lot of aspects of the organization. And now everyone's celebrating much more service to the member as much more engagement, a lot of things done through technology.
So my question to you is how can organizations create that sense of urgency and that free reign without the external forces of disruption so all stakeholders see the need for change? Because there are a lot of times people in this case on the board saying, Hey, we've spent decades bringing the organization to this level. Don't mess it up.
So I keep going back to those future customers, your purpose for why you're doing this. If you put the needs of the future customers in place, if you connect that strongly to your purpose, then it is so compelling to want to make changes, to be able to serve them. I don't think there's anything else. I've never seen anything else as compelling as a truly deep view and understanding, empathetic, like stand in their shoe view of who those people are and their needs. And when that becomes something visceral that you can feel in your gut, in your heart, in your soul, you can't help but run towards it.
Of course, we have to. We have to go serve them. It's like this magnet pulling you, there's this immutable force, just pulling you towards the future. So instead of the pandemic or some sort of external force pushing you to make change, this is a pull.
And so the organizations that do a great job with disrupting spend a huge amount of time, making it very clear, this is the why, this is the people we're going after, have models, personas, whatever you call them. But they're the future. Because unless you have that clear model, how will you recognize them today? They're not around, they don't exist.
And so when everybody in your organization knows who this person is, they come across and they go, oh my goodness, we have a future customer sitting right here. Everybody, everybody come gather around. We're going to go understand them. Talk to them. Get to know them. Make them feel like they're known and we will truly know them. And when we do, we will do everything possible to be with them. Cause we're just falling in love with them. When you fall in love with something you want to be with it all the time.
So I look at it this way. The biggest fear that I hear people saying is what you're saying. We don't want to mess it up. So you make a couple mistakes. You mess up along the way, you can recover from that. I think we need to take a chill a little bit because you act as if every single decision is immutable. Once we make this change, we're stuck with it forever. And we're not. We can always come back like, oh, well that was a disaster. Let's back away from that and do something else. And in most cases, it's okay. We'll be so much better off making those decisions very quickly, spending the time on the really important decisions that cannot be undone.
I mean, those decisions need to be taken very carefully very seriously. But again, it's not a hundred percent guarantee that's going to be right. So this is the world. This is the way business is. Nothing is guaranteed, but it feels so good if you get up every day and you know you're working towards something that's meaningful. That's intentional and purposeful. This is why we are here to do this work. And you will be driven. You will be pulled. You will run as fast as you can towards that goal.
That beautiful image of the future, including the purpose and that future customer, as you said, it beautifully becomes a magnet that pulls you toward that future. I love that perspective Charlene.
Now I would love to also know, have any aspects of your perspectives on disruption change as a result of what we've experienced since the beginning of the pandemic.
Yes. I think one thing in particular we did in five or seven days, what we would've thought would take five or seven years. People were saying we're never having more workers. We'll never do that. So it never works. And that you had to make it work. And I think we're going to be in for a rough ride over the next two, three years because people's expectations are like, “I don't need to go to an office to work. So why do I need to go to an office to work? Really tell me why I need to?” And people say well, “We collaborate better in in-person.” “Well, we've been collaborating pretty well for the past 18 months. So tell me why we need to go back to work other than you just want us to.”
It doesn't fly. So think of the reasons why we want to gather together in a central place is to create a sense of community of togetherness. We know the reasons why we gather together need to be really clear and articulated. And I don't think leaders have really thought about this. I also think that the vulnerability and the openness, the authenticity that leaders showed, especially at the beginning of the pandemic, and then especially here in the United States and across the world with the social justice calls for action. People were literally looking into each other's bedrooms. How much more intimate can you get than that? Managers and leaders, we're asking people, “How are you doing? No, really? How are you doing?” And meaning that. And I fear that we've lost that. We've lost that sense of relationship of connection with each other. We've just gone back to normal workload. No, we are people and relationships are how we connect.
So I think in many ways if anything else it reinforces that true disruptive work happens because of people connecting around a central cause for disruption for change. It has been and it always will. In order to create a movement for disruption, you need to be really conscious of the relationships you have with people.
That human connection is really important. Charlene, and as brilliant as your insights are, one of the reasons I really wanted to have a conversation with you is having heard about your childhood growing up in Detroit. Having heard a couple of your conversations about being an Asian American woman, going into business and the challenges that pose those helped me relate and connect to the human and the person that Charlene is. Not just the fact that Charlene talks about a disruption mindset. So I think what you have done is you have shown through your own example, what leadership is all about. Which is why I love again, your content is absolutely top notch, but so are you as a model promoting that content, which I truly, appreciate.
Now we'd love to also know Charlene if and when leaders ask you for other resources or recommendations of things that can get them to think at this point, in addition to your own book, and I've seen you post some wonderful videos on LinkedIn, so you're creating great content on a timely basis, in addition to some of your information, Is there anything else that you recommend for leaders to read view or do right now to become more effective?
Yeah. I have three books that I recommend. The first one is Erica Dhawan's book. You spelled her name D H a w a N. It's called Digital Body Language. It is a fantastic book with high level frameworks, but also very pragmatic, practical tips on how to connect with people through digital channels and digital, being in zoom and all these other video tools.
But also just how do you write emails more effectively? Think about it. We don't get trained on how to write good emails. So there are certain tips and techniques really well researched. Just a fantastic book, just so pragmatic. I absolutely love it.
The other book that I really do like a lot is The Heart of Business by Hubert Joly, J O L Y. He was a former CEO and chairman of Best Buy. Just a great purpose driven humanity and humility driven book about leadership. So just absolutely fantastic about how to think about the future, how to think about business and leadership.
And then my friend, Gary Bolles has a new book coming out called The New Rules of Work. And Gary is B O L L E S.
And he has been thinking about the future of work for many, many years. He was a chair of the future of work at Singularity University. And it's a fantastic book, has a great framework about how to think about work. And he divided as then the mindset, the skillset, and the tool sets of what you need to manage work in the future.
So just three fantastic books that talk about different aspects of leadership and how to get better at it.
Fantastic recommendations. And to Hubert Joly, for those that say established organizations can't reinvent themselves. He did do that brilliantly at Best Buy, which would have had all the excuses in the world to have not survived the Amazon and online shopping trends.
So Charlene, how best could listeners find out more about you, your content and your book?
One way is to come to my website, charleneli.com, just my name. And everything's on there. And you can also follow me on LinkedIn, and subscribe to my weekly newsletter there. All my content goes through there. I do my live stream there. So if you want to see my latest stuff, LinkedIn is a very good place to be, to be there, to connect with me.
Well, I appreciate Charlene the great perspectives and insights you've put out there for a couple of different reasons. One is that you have actual business experience. You have led the disruption and been disruptive in business. You have been disruptive with your own personal life and take chances with it. And you live what you are trying to teach leaders to do and how you are advocating for them to lead and behave. So you serve as a great example in addition to your content. So I truly appreciate you joining me in this conversation, Charlene Li.
Thank you so much for having me.