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We spend so much time deep in the woods trying to help established firms become less divided by vertical hierarchy and more laterally connected, that sometimes it is good to raise our view and consider the prize that lies ahead for those with the courage, imagination and patience to transform.
Change is hard, of course, which is why many managers will opt to enjoy their time at the top and kick the can down the road for the next generation to solve. Below them, many people in IT, HR or change roles, therefore, feel they cannot solve structural problems, and instead focus on self-help-style cultural fads or perhaps throw more post-its on the wall to show how agile they are.
But sometimes we need to remind ourselves why a fundamental re-architecting of the enterprise is needed, however gradually we might approach it, and what that means in terms of the future.
Jerry Chen’s post argues that systems of intelligence are the next defensible business model. Here are two good examples of what this means in practice: George Anadiotis’s piece on DataOps and James Governor’s piece on data culture at the online-only grocer Ocado.
Repeat after me: bureaucratic, hierarchical management approaches to communication and work coordination are antithetical to the platforms and lateral structures required to connect data-driven organisations. (I might need to work on my catchy phrasing…). Ultimately, you cannot workshop, work out loud or post-it-note your way out of existing structures, despite these being great things to try at the micro-level.
Perhaps the greatest potential winners from the adoption of connected structures are industrial firms, but they have historically been laggards in adopting new technology and practices. GE is an example of a firm that really seems to get this at the top, as evidenced by its GE playbook for digital transformation.
In Europe, I am not convinced the most senior leaders of large industrial firms truly understand that the management practices and roles they grew up with are now holding their firms back. But perhaps the greatest potential exists in one of the main engine rooms of Europe’s economy: the medium-sized industrial firms in Germany, which is why the HBR piece about Mittelstand ‘hidden champions’ is so interesting.
Working on the creation of data- and AI-ready organisational structures in the industrial sector is sometimes painfully slow, but I continue to believe it is an important mission for the future of the economy and society, as these firms will remain a source of job growth despite automation, and also innovation.
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