We live in an era of unprecedented disruption. The amount of data the world stores doubles every 18 months, we have 8.4 billion devices now connected to a vast and ever-growing cloud, and while 33% of U.S. public companies will not survive the next five years, innovative new organizations become billion-dollar unicorns faster than ever. Technological breakthroughs are converted into new customer experiences more rapidly than ever before, and established companies are struggling to keep up.

At the Fortune CEO Series, held at Salesforce’s London World Tour, three business leaders explained how established companies could refashion their organization and business models to thrive in a world where technology, customer expectations, and the world of work is rapidly changing.

On stage were Jimmy Wales, Founder of Wikipedia and head of the new collaborative news offering Wikitribune; Neelie Kroes, previously the European Commissioner for the Digital Agenda, now a board member at Merrill Lynch, Uber, McDonald’s, Salesforce, and others; and Hans Henrik Beck, Founder and Managing Partner at Qvartz, a Nordic-based management consulting company.

 

What’s one thing that unifies the three panelists? It’s okay to fail sometimes. Indeed, if companies aren’t failing frequently, they’re probably not moving fast enough. Session contributors believe that failure is an inevitable byproduct of learning and experimentation, and that both are key to building innovative companies. As Adam Lashinsky, session moderator and Executive Editor for Fortune, said, “Embracing failure is part of the curriculum in Silicon Valley.”

Neelie Kroes agreed, and noted that what was true in Silicon Valley is certainly not true in much of the rest of the world. In her view, the European mindset was still to avoid failure at all costs. “We still have a culture that [thinks] failure is negative. But it should be seen as part of the learning curve. You need failure to be successful. We have to have a different mindset.”

A fear of failure makes existing companies hostages to disruption, rather than catalysts of it. “Disruption is going to happen one way or another,” Kroes said. Companies have a choice. Do they take control themselves and leverage that disruption so they can progress, or do they stick their head in the sand and allow themselves to be disrupted? Her advice to established companies? “Please, stay in the driver’s seat.”

Wikipedia Founder Wales agreed. “I’ve failed many times in my career, and if I never fail again, that probably means I’m not doing anything interesting.” His example calls to mind the race car driver Mario Andretti’s quote, “If everything seems under control, you’re just not going fast enough.”

Hans Henrik Beck, Founder of Qvartz, believes that the core problem for many established companies is not their ability to spot problems or opportunities, but their inability to move quickly enough to solve them in today’s accelerated environment. “Most C-suites know the answers,” he said. “The hard part is getting the action going fast enough. That’s why the big challenge for many incumbents is speed and agility. They’re simply too slow.”

For companies to become faster and more agile, Beck believes that the key is building an engaged employee base. Yes, Beck said, “you need to make sure you tackle and solve, and get your answers” to the pressing business issues that companies face every day. But the way to actually operationalize your strategies and actually act on the answers you find quickly enough? “You’ve got to engage and mobilize your employees.”

I’m absolutely certain. Purpose is driving profits. Profits don’t drive purpose.”

Hans Henrik Beck, Founder and Managing Partner, Qvartz

That mobilization requires companies to release the power of every individual employee, by defining “a new leadership model that is capable of managing the full power of human beings.” When building their businesses, Beck believes that many companies simply lose sight of the formidable power of an aligned and energized employee base. “A lot of incumbents in a lot of industries are building really efficient machines,” but without considering the role people have within that machine.

They focus on the processes, workflows, and strategic decisions of their business, but forget that the only way for the machine they have built to function at the level today’s business environment demands is with an engaged, aligned workforce. As Beck said, “Companies should manage their assets with brains and numbers, but people with leaders and hearts.”

In order to appeal to an employee’s heart, values-based leadership is critical. The way to drive engagement is to ensure purpose is at the heart of business. “I’m absolutely certain. Purpose is driving profits. Profits don’t drive purpose,”said Beck. Unfortunately, though, too many business leaders are focused on perfecting their efficient machines, and purpose is relegated to an afterthought.

As Beck sees it, at the core of any business strategy are three fundamental questions:

  • What do we do?
  • How do we do it?
  • Why do we do it?

In his view, too many established business leaders “over-describe the how,” but give little thought to the “why.” Yet that “why” is the core factor in building an engaged, mobilized workforce. It functions as a north star for every employee. Without it, in such a rapidly changing world, how can you, “ask people to be agile, and navigate and be on their feet? It’s impossible,” said Beck.

Companies that are driven by a clear purpose can, in Neelie Kroes’ view, help navigate the broader problems society faces. While in her last term in office as European Commissioner for the Digital Agenda, Kroes had a front-row seat to a huge youth unemployment crisis. “We were talking about a generation from 16 to 24 that would never get a job. That’s dramatic.” She saw the role companies could play in building opportunities for those people, and helping solve a crucial social problem: “They were not willing to wait until politicians served up solutions. They took their own initiative, and found opportunities.”

In a world where the five biggest tech companies in the world — Amazon, Apple, Facebook, Google, and Microsoft — spend almost the same as the entire U.S. federal government on scientific research, it’s clear that corporations will have a significant role to play in shaping the world of the future. By focusing on engaging their people, building a new model of leadership, and seeing failure as a critical part of moving up the learning curve, businesses have the best chance of building for themselves a core role in that world of the future.