In a previous post on the NO FEAR community I have tried to connect Stephen R. Covey’s 7 Habits of Highly Effective People to leadership in transforming enterprises. McKinsey’s 2014 article on The Seven Traits of Effective Digital Enterprises has inspired me to translate their angle into an inside perspective. How would the seven traits resonate on dealing with the internal digital transformation and the future of information and knowledge work?
Here’s my (pretty extensive…sorry) this week’s take on traits 1 to 4:
McKinsey says: The age of experimentation with digital is over. (…)To succeed, management teams need to move beyond vague statements of intent and focus on “hard wiring” digital into their organization’s structures, processes, systems, and incentives.
I have experienced the same over the past year. No matter which industry, size or mode of operations, almost all companies are done with their experiments on community building, social networks and virtual teamwork. Vision statements of “fully connected enterprises” and the “one big committed family approach” become less and less. They are replaced by initiatives going after business productivity, effectiveness and growth. It has become almost impossible to get anything off the ground with a proper connection to business logic and challenges. Just recently the extend of this new take on the subject became even more obvious to me. One of my clients decided to start a parallel stream on organizational change in order to adjust formal role descriptions to address content accountability in the context of an intranet re-launch. That change will be necessary to ensure that the new service is able to generate the desired long-term impact and value.
1. Be unreasonably inspirational
McKinsey says: Make someone accountable at the board level; create a stretch vision; measure digital value, not digital interactions
Let me start with the last statement. I think it’s time to move away from measuring internal digital services like we used to measure external social media in the early days. It doesn’t matter how many people are part of a community, how many blogs are out there or how many likes a document gets. In order to understand the value generated through connecting people and intellectual assets we have to surface the impact of those connections: less time used to do the usual work, more business generated through inter-departmental knowledge exchange on a client, shorter time to market by taking previous experience (and failure!!) into account. For that we don’t really need the stretch vision. We need the commitment to change. We need executives and middle management to accept and name shortcomings in order to address them. We need baselines that progress and success can be measured against.
To get that commitment, internal change and the Digital Workplace need board attention as well. As soon as “digital” gets connected to currently “non-digital” business logic executive buy-in is required. Otherwise initiatives are “dead in the water” from the start. However, I am not sure if one person on the board that is really committed is enough. I wish that all board functions would take on their stake and responsibility in driving and leading change. I agree that most of the time you need one disruptive person that keeps questioning the status quo and acts as the catalyst for change. Nevertheless, operations, finance, HR, marketing…they all have to play an active role in the internal transformation because they all will be affected short, mid and long term.
2. Acquire capabilities
McKinsey says: Buy scarce talent en masse; hire for digital skills, not industry experience; move into adjacent markets
What this statements triggers with me first is the fight for talent and the pretty common perception that the Digital Natives are the ones that we have to satisfy to ensure the corporate future. As much as I agree with the first fact – if it comes to attracting talent the beauty contest now happens on the employer side – I am a little more careful with the second one.
Companies do need people that live connectedness and that have no fear to reach out and interact with large, unknown audiences. We need the ones that see the bigger picture and that will not understand why individual objectives should trump collaborative success. However, we have to build the bridge to today’s key protagonists in the corporate value chain. The ones that have been indoctrinated to think “me” first and disregard the potential of helping others if it doesn’t suit the personal – or even worse: the top manager’s – objectives. To change their way of thinking will take time. They ARE the industry experience. The HAVE the yearlong work and relationship management experience.
To connect that existing asset with the tremendous and almost infinite potential that lies within the future of information and knowledge work is the key for success. It’s the key for growth, profitability and competitive advantage.
3. Ring fence and cultivate talent
McKinsey says: Protect digital talent from “business as usual”, don’t rely on existing HR models
Ok…”hell NO and hell YEAH!” to this statement.
Hell NO! Please do not “ring fence” digital talent. Turn them into catalysts, into change agents, into relentless drivers and nurturers of change. Please. Don’t create internal silos and competition between connected and digitalized departments and the old fashioned “they way we have it done for the past 30 years” ones. The ultimate power for internal changes does not lie within competition. It lies in helping each other to transform and go new ways.
Hell YEAH! goes to the HR piece of the statement. Even though it might sound harsh, I have to admit that looking back to my career I haven’t come across that many HR departments that acted FOR talent instead of AGAINST cost. A lot of conversations around the subject even give me the confidence that this perception is only limited to me. Too many HR departments act too much on the R than on the H side. They have been turned into risk mitigation and process/policy enforcement departments. There aren’t that many HR departments out there that have a dedicated accountability to interfere with “business as usual” and make sure that talent is identified and grown – even if it means to re-allocate people because they were hired for the wrong job (not the wrong company!!).
In the age of internal digital transformation HR departments have to take on new responsibilities. They have to help existing talent to transform and new talent to balance their will to force change with the abilities of the organization. They have to find a way to identify the connectors, the spiders in the corporate network, the ones that have the ability to lead without a title. Then we will have an HR organization in place that is an integrative and essential part of the transformation of companies in truly digital enterprises.
4. Challenge everything
McKinsey says: Don’t accept historical norms; question the status-quo; create a plan covering every function, product, business unit and location
There we go. Basically I should just say: yes, exactly. Nevertheless I would like to elaborate a key learning of my past years in the field. If you talk to executives they are happy to look ahead. Their job is to pave the way to the future or rather line out the goal to which a path has to be paved out. If you talk to the work force – in particular the high performers – you will get serious buy in and will to change and break the old norms. Change is good. Tomorrow shall be brighter than today.
Resistance comes from middle management. That resistance however, shouldn’t be mistaken for being “not willing” or “incapable” to change and break norms. The “need for and momentum of change” simply reaches them. Their objectives stay function focused and KPI driven in order to make it easy for their superiors to evaluate the course and steer the boat. Sometimes you cannot blame anyone for really…because why would you make your life more complicated than actually necessary, right?
If we want to “change everything”, if we want to have a “plan covering every function”, if we want to break down silos and old norms of thinking we have to manage our organizations exactly according to that aspiration. Make “my” success impossible if “our” success is hindered by it. Formalize it. Turn individual goals and KPIs into collaborative measures and objectives throughout all levels. Don’t think quarterly EBIT, think long term knowledge retention and utilization. Don’t allow talent to trickle form the organization as soon as it becomes clear that the “human resource” will be the core of the next savings round. Rest assured: the ones that can swim and are able to reach the next shore are the ones to leave first if the boat is clearly going down. You are always left with the ones that couldn’t be bothered in the first place.
I know I am asking a lot here. But I’ve seen this change and new way of thinking happen and I believe that we will see it happen a lot more in the future.
To be continued…
Next time I will be dealing with the left over three traits:
- Be quick and data driven
- Follow the money
- Be obsessed with the customer