The world has changed and the pace of change is accelerating rapidly. The customer is the new boss and their expectations are higher. Empowered customers increasingly expect you to do business on their terms. Digital disruption is changing how companies deliver the value proposition of existing goods and services. Globalisation has created a market dynamic that fosters competition on a grand scale. The world is complex – it is made up of many connected parts along with a huge number interactions which have unclear cause and effect. This is makes picking the right path forward difficult.
All this means your business models that were suited to slow, sluggish and low dynamic markets are now obsolete. You will need to rethink your core business and operating assumptions from the ground-up.
In his Ted Talk ‘ Smart failure for a fast-changing world ‘, Eddie Obeng reflects on the how rapidly the world has changed in the modern and digital age. He explains how the change was so rapid that the ‘world after midnight’ was significantly different due to organisations slow rate of learning.
As a result most of us are not equipped to handle the pace of change because we are using old rules to do so: “Somebody or something has changed the rules about how the world works.” The practices, processes, assumptions that we commonly used to plan, manage, lead, organise, and govern are obsolete and are now damaging to organisations.
Due to this failure to learn many organisations have not evolved over time to survive or thrive in the current state of the world.
To bring their organisations to the moden era, many leaders are embarking on business transformation initiatives. Business transformation is a change management activity to move an organisation from one operating model to a new operating model which has the aim to align people, process and technology of the company so they can better realise its business strategy and vision.
Over the past 10 years the number of organisations undertaking a transformation has boomed with many companies increasingly turning to agile as a panacea to address it’s organisational problems. There are times when the transformation goal is misguided as leaders may not actually know the problem they are solving or they embark on solving the perceived problem.
With the urgency to transform leaders in organisations look to find a quick or comfortable solution to solve their problem. This has given rise to organisations implementing SAFe by the book, trying to copy the “Spotify Model” or roll-out the consultancy’s approach. This is the approach they understand – big top down batches of change.
Ever since Henrik Kniberg released the fascinating document, Scaling Agile @ Spotify with Tribes, Squads, Chapters & Guilds in 2012, all of a sudden every organisation now has squads, tribes, chapters and guilds. But that was a point in time. You shouldn’t copy it in your own organisation as the context will most likely be different.
Speaking to someone I know in Spotify, they talk about there is no such thing as a “Spotify Model”. Even people within Spotify talk about their way of working changes all the time as employees are encouraged to learn, discover and adapt their way of working continuously. There is no one way in which software is developed at Spotify. Spotify tries to be the best learning organisation they can be. That way they are constantly innovating and creating their own future.
In a bid to solve a demand in the market, there are many consultancies now offering Transformation Services. The issue with this approach is that there is no recipe to transform an organisation. Each organisation is different and no two organisation’s cultures are the same. Furthermore, it is most likely no one has transformed your organisation before.
I have experienced and heard countless stories where consultancies were accountable to execute the transformation of an organisation but the changes never stuck. Many consultancies that have strong strategic management capabilities are pushing into implementation but we are finding they are lacking experience and capability. Most of the time it’s to implement a particular methodology or follow a playbook which is out of date as quickly as it is produced. In this scenario, “organisational change is treated as a product-sold by consultants, paid for by leadership, and consumed by the rest of the organisation as directed.” . Any ideas or suggestions of incumbent employees are often ignored. There is often a trust issue as people are more likely to trust colleagues who are part of the journey, rather than someone who is external. Change needs to be done with the people, not on the people.
Another challenge is that the consultancies main stakeholders are the not the people of organisation they are trying to transform (they don’t report to them) and it’s certainly not the organisation’s customers. Furthermore, the consultancies have a commercial outcome they need to realise. This does not align to a cultural change outcome which is important for the transformation to progress and this takes time to develop. And how do you measure success for a transformation?
First and foremost an organisation is made up of interconnected people – it is a social network that is striving to pursue a collective purpose. An organisation is an open and complex adaptive system – they affect and are affected by their environment. Company culture is the personality of a company – it is the social behavior and norms found in the organisation. No single person can own the company culture as it is made up by its collective people.
A transformation can not be treated like a program. There is no end date. It is not mission accomplished after 18 months. Any failed transformation can be traced back to a misalignment of vision, purpose, values of people within the organisation. It’s not about changing processes, implementing new tools, or putting new structures in place. As quickly you have transformed to one state, you will need to start transforming to the next state. What you want is constant evolution as the organisation adapts to its ever changing environment. There is no done.
For years automotive manufacturers have tried to copy the success of the Toyota Production System (TPS) that has made Toyota one of the most successful companies in its industry over a long period. Why have they all failed? It is the 14 Principles of The Toyota Way that underlie the company’s philosophy, managerial approach and culture. At best you can copy the practices, but what you can’t copy is the culture. It is the culture that makes Toyota successful.
This is best echoed in a story from the early days of Toyota when they built automatic looms. When hearing
that the plans for one of the looms had been stolen, Kiichiro Toyoda is said to have remarked:
Certainly the thieves may be able to follow the design plans and produce a loom. But we are modifying and improving our looms every day. So by the time the thieves have produced a loom from the plans they stole, we will have already advanced well beyond that point. And because they do not have the expertise gained from the failures it took to produce the original, they will waste a great deal more time than us as they move to improve their loom. We need not be concerned about what happened. We need only continue as always, making our improvements .
I have seen organisations and teams where they implemented a new system of work but then remained static for a number of years. They only were taught to implement some practices and process. What they failed to do was learn how to learn or adapt.
A goal of a transformation should be to strive to be a learning organisation. By building a culture of learning, you only have to transform once and then never have to transform again as people within the organisation are constantly learning and adapting its way of working. That way you build the muscle memory needed so you can constantly change as the world changes – this is true Business Agility.
Having been part of multiple transformations and from multiple view points a key learning is that the people in the organisation needs to own the transformation. The organisation needs to build capability, knowledge, skills and ability to transform and learn. You can’t outsource it. You want patriots not mercenaries because patriots connect with the vision and purpose of the company. Also, the knowledge workers have intimate knowledge of what is going on.
The last point of Edward Deming’s 14 Points For Management, states that the transformation is everybody’s job in the organisation, not just a select few.
Put everybody in the company to work to accomplish the transformation. The transformation is everybody’s job.
Much of Agile ways of working is about feedback loops and gaining knowledge from experience and making decisions based on what is known – understand in reality what worked and didn’t worked so you can make adjustments accordingly. This also applies to transformations. The transformation plan is not linear, and requires many fast feedback loops and continuous adaptation. The approach that worked in one organisation may not work in yours. Also what worked in one team in the same organisation may not work in another.
Transformation is best achieved with top down intent and with bottom up implementation. The best managers figure out how to get great outcomes by setting the appropriate context, rather than by trying to control their people [Netflix]. With a culture of learning established, management should set a vision, manage the boundaries and help teams establish a system of work. The system of work should be owned by the people doing the work. If you do this, you will be living the first value of the Agile Manifesto – ” individuals and interactions over processes and tools”.
Your people are the competitive advantage. Let the people own and create the organisation’s new reality. Own your business transformation. The change needs to be done by the people, for the people within the organisation for it to succeed and be sustainable. Don’t delegate this accountability. Don’t rely on others to do it for you.
 J Humble, J Molesky & B O’Reilly, Lean Enterprise, 2015
 M Rother, Toyota Kata: Managing People for Improvement, Adaptiveness, and Superior Results. McGraw-Hill, 2010
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