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Building companies that disrupt themselves

The world of Business 4.0 demands that companies develop fundamentally different business models. And that means discovering a different way of leading.

The TCS Summit Europe focused on leadership in a session led by Hal Gregersen, Executive Director of the MIT Leadership Center and Senior Lecturer in Leadership and Innovation at MIT’s Sloan School of Management.

Leaders must recognize we are living on the edge of uncertainty, he said. “There are things we know, there are things we know we don’t know, but it’s the things we don’t know we don’t know – that’s where disruption comes from.”

Warning of the danger to leaders of becoming isolated from their businesses and the world around them, Gregersen said leadership was about asking the right questions – and digital technologies are forcing people to ask them faster. 

Digital transformation

N Chandrasekaran, Chairman of Tata Sons, agreed. Digital transformation affects every part of an organization but especially its culture, he said. “It affects the management style. It affects the talent that you have and how you want to operate.”

Transformation is not just about digitizing a process, but a fundamental shift for the company. “People have to buy into it,” he said. “They have to see what’s possible.”



Nigel Wilson, Group Chief Executive, Legal & General, who joined Chandrasekaran for the panel session, said transparency is a prerequisite to changing the culture of an organization.

“Intellectual honesty is ‘tell me what you think, not what you think I want to hear’,” he said. “As the chief executive of a group, you have to trust your colleagues that they’re prepared to do that.”

Facing reality leads to self-disruption which is “a privilege and a responsibility,” he said. “You have to be courageous to do that. And have a collective will to do it too.”

Perform and transform

Changing a business while hitting existing objectives is not easy, he said. “All organizations need to perform and transform. A lot of the time, we think we’re transforming when all we’re trying to do is keep the ship afloat and perform.

“That’s why self-disruption is such a wonderful thing when it does happen.”

Innovation and transformation are not possible if people fear making mistakes, added Chandrasekaran. “If somebody’s hitting the target all the time, that’s a problem. People should miss targets. It’s important. Otherwise, they’re not trying hard enough,” he said.

As Wilson said, leaders must learn by failing fast and being resilient. “Every day is a struggle. Every day, you make errors and you’ve got to get used to the fact that you’re making errors and you can’t dwell on them,” he said.

Artificial intelligence and machine learning can help reduce mistakes. But they are powerful business disruptors and embracing them involves taking risks. They also generate fears about the impact of technology on jobs and society.

But, according to Chandrasekaran. “Fundamentally, we’ve got to realize there are two classes of resources – humans and machines. Machines are going to be better in some areas than humans, but humans will always be better than machines in certain things.”

Nigel Wilson confronted the issue head on. “It’s been portrayed that artificial intelligence and technology is going to destroy jobs,” he said. “That’s what they said in the 19th century. It’s just not true. We have to get rid of that fear.”



A higher purpose

Technology has the power to answer the big questions facing global society and make life better for everyone, he said. “As leaders, we have to create a positive image of what the world is going to become.”

Both speakers agreed businesses should make the wellbeing of society their core mission. “The world is full of amazing science and technology on the one hand and phenomenal problems to solve on the other,” said Wilson.

“Virtually no company in the world is pooling it all together to come up with solutions that are economically and socially useful and relevant. We have an opportunity to make a huge difference.”

Leaders need an “Indiana Jones moment”, as Wilson called it, in which they have the courage to embrace the transformation of their organization and take their teams with them on the journey.

“We want to build a better society – that’s absolutely our purpose,” he said. Putting that into practice, Legal & General have invested nearly $20 billion in UK regional cities to tackle social issues.

Staying positive

Gregersen asked how the two leaders motivated themselves in a world facing massive problems. For Chandrasekaran, it’s all about staying positive. 

“I try to create a belief in the team that nothing is impossible. If somebody else has achieved something, we can and should do better than that,” he said.

 “Success is about the team, not about the individual, in business,” added Wilson. “We ascribe too much to the individual and not enough to the team and the organization. Therefore, you build a culture which is around team success.”

He left the audience in Geneva with a challenge: “How about replacing cautious with courageous and really making a difference?”