As we mentioned earlier in the book, while technology is important, the behaviours that surround it are a fundamental component of change and agility. Successfully transitioning to an organizational state that is far more characterized by fluidity, adaptability and constant change depends heavily on the skills, attitudes and behaviours of the people in your business.
Becoming a truly agile, digital-native business will mean adopting not just new technologies, but new customer-centric thinking and approaches. It will mean embracing and responding to new processes and expectations. And it may well mean adapting to new structures, incentives and responsibilities.
Change requires clarity and leadership to create the environment in which it can happen, to demonstrate why change is necessary and to direct and guide behaviour in the right direction, but culture and behaviour are inextricably linked. Just as culture helps determines behaviour, behaviour helps shape culture.
So just as entrenched culture and behaviour can be one of the most powerful barriers to progress, so an enabling culture and new practices and behaviours can be powerful forces of advancement towards a more agile busi-ness. Digital transformation is less about ‘talking the talk’, and more about
‘walking the walk’. It is not about jargon, it is about action. As digital literacy grows at all levels of the organization, beyond the more tangible metrics and results it will be the expectations that are set, the questions that are asked, the questions that are not asked, and the visible behaviours of the senior leader-ship down, that will be critical indicators that progress is being made.
Stories from the frontline
Faris Yakob, co-founder, strategy and innovation consultancy Genius Steals, author of Paid Attention:21 Everyone likes progress, no one likes change
The world pulses to an exponential beat, daring companies to keep up, as Jack Welch so famously feared. And rightly so, since most companies will fail to and will die.
That means more and more companies are failing to adapt to the exogenous changes that either power or destroy businesses.
Why? Why is corporate change so hard?
Some answers are obvious, the well worn territory of The Innovator’s Dilemma, but others are less well explored and just as important. In our consulting work, we have uncovered the same barriers, again and again, at very different kinds of companies.
Formal
Legacy infrastructure, built in an industrial age, represents a massive cost base in labour, equipment which is being amortized, software, systems and so on. Public companies cannot abandon them and take the mark down, their Wall Street owners would never allow it. So they must simply continue, cutting costs, to prop up share prices. Processes, once codified, become orthodoxies instead of guidelines.
Worse, should the problem these companies solve melt away through new technologies, they will be forced to attempt the even more difficult task of halting progress at a political and cultural level.
The ‘Shirky Principle’: ‘Institutions will try to preserve the problem to which they are the solution.’
Informal
Companies often hire ‘change agents’ to usher in new ideas, products and processes. This is a death sentence, for it sets up said harbingers of the future in opposition to every other employee. Implicit in naming change agents is the idea that change is needed and that no current employee is bringing it. This oppositional stance makes collaboration nigh impossible.
Perverse incentives are rife in corporations. At the board level there is a desperate appetite for growth, which often means change, but the way it’s pushed through the system creates inverted incentives.
Ridiculous sales targets turned Wells Fargo employees into criminals, destroying the bank’s reputation. Both the targets and the employees have been removed.
I spent weeks working on a business and communication strategy for one of the world’s largest telecoms companies. Our approach was to simplify the purchase process and migrate it online. Within the recommendation was a call to close many of the call centres taking sales calls (which the company had in every state in America) which would have saved millions of dollars by itself. The clients loved the work in the meeting – and subsequently killed it. Turned out one of the bosses’ bonuses was based on call volume, as a proxy for leads.
Goodhart’s Law (named after economist Charles Goodhart): ‘When a measure becomes a target, it ceases to be a good measure.’
Conformal
Ideas can come from anywhere, says every CEO. At least in public. But there is a window of acceptable ideas that conform to expectations, and ideas that fall outside them are ignored.
Overton Window (also known as the ‘Window of discourse’): the range of ideas the public will accept also operates inside companies, as a barrier to innovation.
The key to addressing barriers is correctly identifying them, which is usually impossible inside the system, since anyone working at the company is at the mercy of informal and conformal ones. Companies that can’t work with partners are unlikely to see the end of the broken bridge until it’s too late.
notes
1 Eric Schmidt and Jonathan Rosenberg (September 2014) How Google Works, Grand Central Publishing, ISBN-10: 1455582344
2 Victor Newman (2013) Power House: Strategic knowledge management, [Online] http://www.blurb.co.uk/b/4278274-power-house
3 Matt Edgar (June 2013) Quora Answer, Why Don’t Big Companies Innovate More? [Online] http://www.quora.com/Why-dont-big-companies-innovate-more/answer/Matt-Edgar?srid=pJZn&share=1 [accessed 16 October 2016]
4 Victor Newman (2013) Power House: Strategic knowledge management, [Online] http://www.blurb.co.uk/b/4278274-power-house [accessed 16 October 2016]
5 Hugh MacLeod (July 2004) Ignore Everybody, [Online] http://gapingvoid.
com/2004/07/31/ignore-everybody/ [accessed 16 October 2016]
6 John Dawes ‘Price changes and defection levels in a subscription-type market:
can an estimation model really predict defection levels?’, Journal of Services Marketing, (18:1)
7 Adam Katz (2011) Behance, All of my good ideas are battles, [Online] https://
www.behance.net/gallery/905959/All-of-My-Good-Ideas-Are-Battles [accessed 16 October 2016]
8 About Dyson, [Online] http://www.dyson.co.uk/community/aboutdyson.aspx [accessed 16 October 2016]
9 Arie de Geus (1999) The Living Company: Growth, learning and longevity in business, Nicholas Brealey Publishing; New edition, ISBN-10: 1857881850 10 Nortel Study, University of Ottawa, Telfer School of Management (2014)
Jonathan Calof, Greg Richards, Laurent Mirabeau, [Online] http://sites.telfer.
uottawa.ca/nortelstudy/?_ga=1.151813053.549191806.1369078998 [accessed 16 October 2016]
11 Nortel Study, University of Ottawa, Telfer School of Management (2014) Jonathan Calof, Greg Richards, Laurent Mirabeau, [Online] http://sites.telfer.
uottawa.ca/nortelstudy/?_ga=1.151813053.549191806.1369078998 [accessed 16 October 2016]
12 Paul Graham (December 2014) How to Be an Expert in a Changing World, [Online] http://paulgraham.com/ecw.html [accessed 16 October 2016]
13 Paul Graham (December 2014) How to Be an Expert in a Changing World, [Online] http://paulgraham.com/ecw.html [accessed 16 October 2016]
14 Paul Graham (December 2014) How to Be an Expert in a Changing World, [Online] http://paulgraham.com/ecw.html [accessed 16 October 2016]
15 Tom Fishburne (October 2010) Waterfall Planning, [Online] https://marketoonist.
com/2010/10/waterfall-planning.html [accessed 16 October 2016]
16 Jason Fried and David Heinemeier Hansson (March 2010) Rework, Crown Business, ISBN-10: 0307463745
17 Steve Slater and Aashika Jain (December 2013) Reuters, RBS Admits Decades of IT Neglect, [Online] http://uk.reuters.com/article/2013/12/03/
uk-rbs-technology-idUKBRE9B10YB20131203
18 Frances Coppola (March 2013) The Legacy Systems Problem, [Online] http://
coppolacomment.blogspot.co.uk/2013/03/the-legacy-systems-problem.html [accessed 16 October 2016]
19 Frances Coppola (March 2013) The Legacy Systems Problem, [Online] http://
coppolacomment.blogspot.co.uk/2013/03/the-legacy-systems-problem.html [accessed 16 October 2016]
20 Clay Christensen (10 May 2012) How Will You Measure Your Life?, HarperCollins ASIN: B006I1AE92
21 Faris Yakob (April 2015) Paid Attention: Innovative advertising for a digital world, Kogan Page, ISBN-10: 0749473606, ISBN-13: 978-0749473600