Life is a minestrone* – a food based explanation how too much data is killing your business transformation

Uh-oh. My alarm bells went off.

I was having lunch with a friend from an international law practice, chatting about their digital transformation efforts. She was concerned about the people aspect – how to get buy in, define what the future of work will actually look like, skills required… and much more.

The firm had started talking to some technology vendors, set up a steering committee for the initiative and drafted governance structures. And it was in this context that my alarm bells went off:

Managing the fruit salad

The draft governance was highly hierarchical, with lots of layered sign-off processes, auditing and reporting through the levels of the firm to the senior partners. But what turned my mental alarm bells into a shrill screech was this comment:

“Currently we have a mixed fruit salad of operating models across various locations, different systems and technologies, and different approaches to managing people and workloads. As the steering team, we need to understand it, of course, but at the moment we are putting off doing anything because someone always asks for more data”.

“To me, that sounds like the steering committee was trying to eliminate uncertainty”. I suggested. She nodded in agreement.

Businesses don’t like uncertainty.

It is too closely associated with risk of failure- something we as humans are conditioned by evolution to minimise as far as we can.

When our prehistoric ancestors had to deal with uncertainty, it was often a matter of life or death. Is this red berry deliciously food or deadly poison?

Over time, man developed language and writing systems that allowed him to gather and record information – and to pass on information, making it easier for the species to survive and evolve.

Businesses try to eliminate uncertainty

In business, we combat uncertainty by implementing structures, rules and controls that give us a sense of control. And we gather information. A lot of information. We use it to plan and measure. We hope that by having all the information, we can control our (businesses’) future.

But, it does not work.

Giving up the illusion of control

Of course, I am not suggesting that we should stop gathering information, analysing performance and investigating what happened when things go wrong (though we should investigate when things go right, too). Quite rightly, we should collect and use as many insights as we can. And big data has added tremendous opportunities for more insights than ever.

But we need to give up the comforting illusion that information and the strategies we base on it can ever give us complete control. Because no amount of big data can.

The mindset that stands in the way

Our current mental model of organisations includes the hidden assumption that organisations are ultimately complicated machines. And just like we can direct and fix machines, we assume that, as long as we have all the data and are clever in the way we use it, we can predict and control the organisation – including the changes or transformations we wish to see.

Organisations are not complicated -they are a bowl of spaghetti

In reality, however, organisations (even small ones) are complex systems. They are not like a car or a computer; they are more like a bowl of spaghetti. And a bowl of spaghetti is much more complex than even a space rocket.

Even though the “parts” might appear simple, if you pull on one strand of spaghetti, you cannot know the full impact this is going to have on the rest of the bowl (and whether you will end up with tomato sauce on your shirt).

Our businesses and organisations are so complex that no matter how much information we have, and no matter the smart analysis we apply, we cannot know fully what will happen when we introduce change. Especially, when we embark on a change as complex as a digital (or other) transformation.

New threats or opportunities may arise, our competitors might react in unexpected ways, our supply chain could be impacted by new regulation, our people’s behaviour cannot be fully predicted… the list goes on.

From fixed recipes to experiments

We require a different approach to change and transformation. Traditional project management practices, like PRINCE2, don’t work as they rely on stable environments. (PRINCE stands for PRojects IN Controlled Environments). Relying on traditional governance approaches of gathering all the data, then plan the work and work the plan find themselves wanting.

Making delicious soup:

Did you know that minestrone, the soup of Italian origins, has no fixed recipe? The way it is made, and the ingredients used vary widely across Italy. And while good cooks will be confident in the ultimate success of their recipe, no two minestrones will taste the same.

What does that mean for your business transformation?

Take a minestrone approach: your leaders, teams and governance arrangements need to become comfortable with uncertainty. They need to adopt a stance of confidence and commitment to the journey, keeping an eye on the direction while being willing to question if a particular path is still appropriate. Learning when to persist and when to pivot. Letting go of pet projects and reacting to changes with agility. Creating a culture of skilful experimentation and continuous learning.

*Reference to the great song by 10cc with the same title is entirely deliberate

How comfortable are your teams with uncertainty and how agile are they when faced with a change?Get tailored insights by booking a complimentary 45min agility audit here

What’s stopping Digital Transformation – three misconceptions and one key tip

No industry is immune to disruption. Are your competitors doing an “Uber”? Are the likes of Amazon, Apple or Google moving in on your territory in Finance, Telecoms, Transportation or Home accessories? And how about those AI’s that are replacing accountants, lawyers and doctors?

To keep ahead of these threats, companies need to build digital into their DNA.The good news is, many leaders recognise it. Cue the tremendous activity in the digital transformation space: spent in on digital transformation is forecast to reach $2.0 trillion in 2020.

High failure rate

The bad news, however, is that these initiatives show a worryingly high failure rate. Research by McKinsey suggests that 70% of transformation programmes fail, while Forbes puts the figure at 84%. That comes with a hefty price tag: Consultancy UK estimates that large enterprises throw away an average of $400 Billion (£258 Billion) per year on digital transformation programmes that fail to deliver promised benefits. 

So how come that despite best efforts by very smart people and huge sums of money, companies struggle to make this shift? Is it just too big a tasks?

Transformation of any kind IS a big task, and it is not helped by some persisting misconceptions around what digital transformation actually is.

Here are three misconceptions about digital transformation I come across again and again:

Misconception #1 – It’s just about automation.

Digital transformation is more than using technology to replace previous analogue tasks. Digital transformation means doing things drastically different, to the extent that it either disrupt the market or wards off disruption. For example, replacing paper forms of staff records with online forms is not digital transformation, it is digitisation. Similarly for all the initiatives to overlay digital channels to the customer journeys. By themselves, offering digital channels is not transformation. It is merely using digital tools to automate and improve the existing way of working.

Of course, there can be merit in digital change projects. A considered, strategic portfolio of them might very well be part of the digital transformation.  

Misconception #2 – Digital transformation is a one-off programme.

Assuming that digital transformation “programmes” have a beginning, middle and an end is a mistake. They don’t. Instead, digital transformation requires continued effort. Digital transformation cannot be “done” like a fad diet – it needs a real lifestyle change. And it is not going to go away: to remain competitive, organisations must be continually seeking to improve and innovate.

Misconception #3 – Digital Transformation is about technology.

Of course, choosing and implementing the right technology is important. But getting it right is less about the technology than it is about people. No matter what the tech: cloud, social, big data & analytics, mobile, IOT or Artificial Intelligence, technology is just a tool. And as a tool, it will only function well if the people, data, processes and culture of the organisation are taken into account. Vendors don’t like to hear that, but not every tool is right for every organisation every time. 

Falling prey to these misconceptions can positively undermine transformation initiatives. The focus for activity and spend is misdirected, costing the company dearly in terms of money, effort and time and potentially leaving it vulnerable.

Key tip: Take the digital transformation out of the IT department.

If you want to give your initiative the best chances for success, you need to develop a digital culture. That means not delegating it to the CIO or IT Director and assuming the rest of the organisation can carry on business as usual.

Instead, the initiative must work with multiple stakeholders – including business units, support functions like HR, Finance, Marketing, Facilities, etc.

Prepare your organisation for a digital culture:

  • Create a broad digital strategy. Be very clear on the goals for your digital strategy – what is it about and why? Are you truly aiming at transformation or just improving the status quo by using digital tools? At the same time: don’t get too attached. The trick will be to keep it flexible, yet consistent in the direction of travel.
  • Develop a group of internal digital champions from across functions and business areas that shape a common journey to transformation. Make sure they can experiment and feel secure enough to learn from failure.
  • Tell the story of the digital journey while being open to feedback and willing to adopt it as appropriate (see above about flexible and structured)
  • Start flexing organisational behaviours, processes and even the organisation chart. That means changes to top-down decision-making. Changing who can take action. And how people collaborate with each other.
Digital transformation is everyone’s business

As Selina Heiska, the new VP of Digital Transformation at Wärtsilä puts it

“The transformation can mean different things to different people. For some, it may mean the use of new tools, for some need to think outside of the box to look for new innovative solutions to solve customer problems –  but common for all is that transformation requires everyone’s participation.”

Find out how to set up a team of internal champions and prototype your way to transformation that is fit for your business, book your complimentary Future of Work Game Plan session here

Agility – why companies struggle to adapt to change

“…in this world, nothing can be said to be certain, except death and taxes.”

The famous quote by Benjamin Franklin has never been truer than today.

As political certainties are turned upside down and surprises come at us from all angles, organisations could add another rare certainty: CHANGE. And change is, err – changing.

Of course, business has always known that change is inevitable. But in the past, most of it happened over time.
Sure, events like evolving consumer demands, the arrival of new technologies or competitors caused businesses to change, but, even if companies didn’t prepare for them, they did (theoretically) have time to spot them.

For example, everyone knows that Kodak missed the boat on digital photography. But the reality is that Kodak was not caught out overnight – in fact, they had three good chances over a 25year period to get into the game.

The kind of change we are dealing with now doesn’t give you that much time.

Change has become faster – roughly following Moor’s Law. Think about it: 30 years ago, we didn’t have the smartphones that are now ubiquitous. 30 years before then, people didn’t have personal computers.

It’s not just technological change. Rapid shifts in attitudes, new social demographics and falling barriers to market entry are just some of the things that are threatening established organisations.

That means businesses must adapt faster- or perish.

But more importantly, it calls for a different way to generate this change. No longer is it good enough to discuss major (and minor) change at the annual strategy day, then set up steering groups that get progress updates at monthly 2hr committee meetings.

While I am all for good governance, this process is too slow to stay ahead of the change needs. And, crucially, it misses out on the dynamic creativity of the wider organisation that *could* be harnessed.

Instead of “doing” change or transformation, the most successful businesses build the ability to respond to threats and to pro-actively look for opportunities into the very DNA of their organisation.

It’s called business agility.

Def: In a business context, agility is the ability of an organisation to rapidly adapt to market and environmental changes in productive and cost-effective ways. (Wikipedia)

Agile businesses strike a balance between stability and flexibility. Agile organisations have structures and processes that are lithe enough to avoid change inertia while also preventing a decent change chaos. They exhibit greater flexibility, nimbleness and speed in the way they do things.

And the results are convincing:

  • companies with high agility grow revenue 37% faster and generate 30 % more profits
  • 70% of agile organisations score in the top quartile for organisational health and performance – compared to 23% of the other categories of organisation 

So why are too many businesses struggling to be more agile?  

The reason lies in the very nature of how established organisations perceive themselves and how they are structured and manage themselves.

The organisation as a machine.

The concept rooted in the Industrial Revolution is still the guiding metaphor for management in many businesses.

Structures and processes are designed to make sure that, like cogs in a machine, the different parts of an organisation work together efficiently. Centralised management holds all the information and therefore made decisions for the business as they are the ones with sufficient overview and insights. Sometimes parts need to be replaced, other times, initiatives provide the lubrication to make it run more smoothly.

And this approach made sense at the time. It was the time of building railroads and steam ships. The companies that constructed these were designed to coordinate the work of a largely uneducated workforce who performed repetitive tasks. These companies were built for stability and repeatability – doing the same thing day in, day out; over the years.

Modern businesses need more than repeatability

Fast forward a hundred years or so, and it’s clear why that approach to business management is no longer appropriate:

  • Modern businesses are full of educated, creative employees – most of them hired for the cognitive resources they bring.
  • Organisations in the 21st century operate in a dynamic, complex world where the landscape shifts rapidly and responses cannot be deferred.
  • The amount and complexity of information impacting businesses cannot be processed (even if it can be amassed) by just a few people at the top.
  • Hierarchy based decision-making creates bottlenecks, delays decision-making and overworks those at the top and while frustrating those further down.
  • For example, traditional reporting that is prepared weeks in advance of meetings are outdated by the time the decision is due.

Most importantly, the traditional machine concept means that organisations miss out on the collective insights and creative intelligence that their people could bring.  

Time for something different:

Building agility into your organisations requires a mindset shift as well as strategic leadership and commitment. A thoughtful auditing of current capacity for agility is a starting point. As is an insightful reflection on how your people at all levels perceive the organisation and how to shift this perception from the machine concept.

It highlights the need for pushing strategic thinking and shared responsibility across and down the organisation, creating leadership at all levels, no longer just defined by boxes on the organisation chart.

Building business agile capacity becomes a strategic imperative as the pace and disruptiveness of change continues to accelerate.