Professors Nada and Andrew Kakabadse led the research project for Alvarez & Marsal

Global professional services firm, Alvarez & Marsal (A&M) has announced the findings of a new 18-month research study exploring how Boards should address critical disruptions which can damage businesses beyond repair.

‘Boards in Challenging Times: Extraordinary Disruptions’ was carried out in partnership with Henley Business School and analyses the real life experiences of more than 70 UK executive and non-executive directors.

The research identifies four forms of disruption and provides a framework of leadership approaches, qualities and core disciplines to tackle each one. The disruptions are:

1. Transformational Disruptions occur when leadership plans to transform a company in response to performance challenges. This may take the form of a strategic turnaround which impacts existing cultures, processes and structures
2. Reputational Disruptions are unplanned and unpredictable. They often stem from an own-goal with examples including fraud, misconduct or management conflicts
3. Hostile Disruptions are exemplified by the credit crunch or a hostile takeover bid and are caused by a disruptor or disruptive event. They are unplanned by the affected company
4. Creative Disruptions are planned, with the company itself being the disruptor. This could occur following the introduction of a new product, business model or technology.

Malcolm McKenzie, Managing Director at Alvarez & Marsal, said: “This study exposes a number of complex issues and factors that come to the fore when a Board faces extraordinary disruption.

“We often hear about the predicament of companies facing disruption from new, start-up technology, but this research looks more broadly at the context and type of leadership required across the spectrum of disruption.”

Nada and Andrew Kakabadse, Professors of Leadership & Governance at Henley Business School, led the research project for A&M. Nada explained: “Many Boards are often found to be unaligned and ineffective in addressing pressing issues which can threaten organisational survival.

“With research being scarce in this area this study throws a valuable spotlight onto Boards’ reactions to major disruption and helps determine how they can resolve complex and extreme challenges.”