What’s Your Digital Business Model?

Transform Your Business

Digital transformation. We read about it often. Organizational leaders struggle to determine the possible threats, the impending changes needed, the opportunities that are possible.

Peter Weill and Stephanie L. Woerner’s new book, What’s Your Digital Business Model?, provides a strategic framework for thinking about these issues. Peter is a Senior Research Scientist and Chair of the Center for Information Systems Research at the MIT Sloan School of Management. Stephanie is also Research Scientist at the same institution with a specialty focusing on how companies manage organizational change caused by digital disruption.

I had the opportunity to speak with them about their research and new book.

 

Rate Your Digital Readiness

How would you rate most organizations readiness for the era of digital disruption that we are in and are facing?

Most organizations we talk to and research know they have to change to stay relevant and have improved in some areas (perhaps they’ve worked on business process optimization or they’ve automated a lot of processes). However, as customer experience demands have increased, we find that many older, bigger companies have not made the improvements and changes needed to address those demands. Plus the leaders of the average large company (more than $7B in revenue) identified that 46% of their revenues are under threat over the next 5 years if they don’t change.

 

Fact: large companies predict 46 percent of revenues are threatened in the next 5 years absent change.

 

How was the research developed?

The book is based around six questions we think every executive and organization has to be able to answer in order to be competitive in the digital economy. We started this research by interviewing leaders from large, global companies, asking them to describe their most important digitally-enabled business transformation initiative. From there we developed a model, tested the preliminary findings in more than 50 workshops with senior executives, identified capabilities needed, conducted several surveys to test those capabilities and show links to financial performance, and interviewed many companies to help us understand what it takes to transform a business. The book resulted from five years of research which shows that the senior executives of top performing firms honestly answered the six questions. To help, each chapter concludes with a self-assessment on one of the six questions. The reader can then compare their self-assessment results to top financial performers to help leadership teams understand the gap they have to close.

 

Needed: Honest Conversations about the Future

Of the six parts, is there one step that more organizations get stuck in than another?

Probably the hardest question for most organizations is having an honest conversation about whether they have leadership, at all levels, who will persevere and successfully deliver the business transformation. Along the way the culture will have to change and adapt to the new digital business model and often this means changing people at the top. But it is not just the top layer of leaders that has to change. Successful transformation requires getting the whole company to behave differently – from the board to the lowest level of employees. For example, DBS Bank in Singapore, which was one the Euromoney’s most digital banks in 2016 has managed to get 14,800 of their 22,000 people involved in a digital innovation activity every week.

 

“Successful transformation requires getting the whole company to behave differently – from the board to the lowest level of employees.”

How Great Leaders Bring Out the Best in Others

influence

Bring Out the Best

As leaders, we are often wondering what the best way is to bring out the best in our organizations. We want to help people exceed all expectations and accomplish more than they thought possible.

Yet, the current feedback mechanisms and performance appraisal processes in our organizations often don’t work toward that goal. In fact, Tim Irwin, author of Extraordinary Influence: How Great Leaders Bring Out the Best in Others, argues that they do just the opposite. Tim Irwin, PhD is an author, speaker, and leading authority on leadership.

I recently asked Tim to share his perspective on negativity and criticism at work.

 

“Leadership is influence-nothing more, nothing less.” -John Maxwell

 

What are a few things we often get wrong with criticism in the workplace?

Our brains are hardwired to detect anything that threatens our physical or emotional safety. When a person senses criticism, it engages a “negativity bias” in our brains and generally shuts down the parts of our brains responsible for creativity and problem solving. This is just one reason the often-used term “constructive criticism” is such an oxymoron.

 

Research: Science has revealed that affirmation sets in motion huge positive changes in the brain.

 

Avoid Words of Death

What are Words of Death?

The workplace, and society in general, are filled with critical words and phrases. For example, in some organizations, the phrase “One Throat to Choke” is used to describe the need for accountability on a project or other initiative. While maybe colorful and entertaining at some level, the use of these words and many others diminish us, at least at an unconscious level. Leaders routinely use statements such as, “I’m going to hold your feet to the fire,” (a torture method in the middle ages) to motivate employees and presumably to get them to work harder. Our brains thrive on affirmation not threats.

 

Research: Affirmation activates areas of the brain associated with calmness and openness to new ideas.

 

If we are on the receiving end of them, what can we do to limit their impact on us?

If it’s our present boss, we may learn some valuable lessons about how not to lead and motivate others. If a “Words of Death” culture prevails in our organization, we may need to consider, “Do I want to spend 40 to 60 hours a week or more in such a toxic environment?”

 

Share an example of “alliance feedback” that works to bring out someone’s highest potential.influence

Recently I met with a senior officer of a company who had some significant deficits in “Emotional Intelligence.” I could have said, “You have the empathy of a fence post, and no one trusts you.” Those were actually true statements. Would he have heard my feedback and acted on it in a conscientious manner? Doubtful. Instead, I said, “I know you aspire to a larger role in your company, and I think that is a worthwhile and achievable goal. In order to realize that aspiration, I recommend you work on collaborating with your peers more effectively by appreciating the challenges they face in reaching important goals.” What ensued was a very productive conversation about specific actions he could take to collaborate more effectively. He was eager to learn and not defensive in the slightest. The research is compelling that connecting feedback to personal hopes and aspirations bypasses the part of our brain that stays in hyper defense mode.

 

3 Faces of a Leader

How to Seek, Seed, and Scale Innovation

change

The Change Maker’s Playbook

Innovation is dynamic, iterative, and even messy – but with the vast problems facing the world, and opportunities to harness people’s creativity, passion, and desire to make an impact, there has never been greater potential to make a dent in as-yet unsolved economic, social and other issues. Leadership qualities, not always and not simply technology, are the essential ingredients.

I recently spoke with Amy J. Radin, author of The Change Maker’s Playbook: How to Seek, Seed and Scale Innovation in Any Company. Amy is a nationally recognized Fortune 100 Chief Marketing and Information Officer.

 

“Purpose defines what you stand for and why your business exists.” -Amy J. Radin

 

The Power of Purpose

I love this line in your new book: “Purpose defines what you stand for and why your business exists.” Tell us more about the power of purpose and why it’s so important to change makers.

Purpose defines the marketplace problem the change maker wants to solve. It’s why they pursue an innovation.  They see the need to create something new, to fix something they see as really broken.

Purpose is grounded in emotion, but it’s far from touchy-feely. Purpose:

  • Focuses everyone on unifying beliefs, makes collaboration the norm, and aims resources at the vision and nothing else.
  • Minimizes the corrosive effect of internal politics — everyone is committed to the same point on the horizon. Purpose is an energy booster.
  • Sets the goal post on achieving aspirations to meet real market needs. Of course, financial results matter, but the purpose-driven team delivers financial impact and sets itself up to meet broader stakeholder needs.

 

“Purpose means knowing what you stand for, why you want to exist.” -Amy J. Radin

 

Resourcefulness is a key behavior of change makers. How should leaders encourage resourcefulness?

Resourceful leaders are those who can find a path forward no matter what. Doing so means they are making progress even though they have what can look like severe resource shortages.

Much of anyone’s resourcefulness comes from an ability to help everyone in their orbit to be more resourceful.

First, be a role model of resourcefulness behaviors.  My favorite example of all time is one I uncovered while doing the research for The Change Maker’s Playbook: Drew Lakatos co-founded ActiveProtective, a company working on an innovative device – think of it as the wearable equivalent of an inflatable air bag — to attack the growing medical and social crises caused by millions of seniors’ falling every year in this country. He had purpose and passion, but lacked capital.  So, he went around to junkyards one Saturday morning, and extracted non-bloody air bags from wrecked cars. Then he combined these with bicycle tire inner tubes, working with his local tailor to create components of early proof-of-concept designs – for a few dollars apiece. They were convincing enough to win critical support to get to the next steps.

Second, when assessing potential hires, listen for stories of how they have demonstrated resourcefulness in their lives. If you don’t hear evidence of real tenacity, move on.

Third, be open-minded about how things are done, not just what is getting done. Being resourceful means finding and supporting non-obvious ways to accomplish milestones and achieve goals.

 

“Resourceful leaders treat others with respect and value people as people, and as a result inspire and attract others to enable their purpose.” -Amy J. Radin

 

Fourth, promote a culture where seeking help is a mark of leadership and strength, not a sign of weakness. I see organizations where people are afraid that they will be fired if they admit ignorance. I see cultures punishing people who admit they don’t know something or would like help. These are environments where innovation cannot ever be successful.

 

“Resourceful leaders are those who can find a path forward no matter what.” -Amy J. Radin

 

Lessons from Edison

Is Your Company Ready for the Next Cyber Threat?

digital threat

Are You Prepared?

Security incidents are up 66% year-over-year since 2009. Despite this alarming statistic, 80% of CEOs report that they are confident in their company’s cybersecurity.

Cybercrime is on the rise.

Are you prepared? 

Cybersecurity expert Ray A. Rothrock shares the tactics used by hackers and then arms management with the tools to prevent these hacks in his new book Digital Resilience: Is Your Company Ready for the Next Cyber Threat?

 

76 percent of respondents to Cyberthreat Defense Report indicated that they were successfully compromised by a cyberattack.

 

Why Leaders Must Pay Attention

Ray, your book is compelling. It starts by scaring us beyond belief. For those who haven’t read your book yet, would you go ahead and scare our readers…

By the end of 2016, one category of cyberattack on business —ransomware infection– topped 4,000 instances per day. One publication, CSO, recently posted an estimate that cybercrime damage will hit $6 trillion by 2021 and, by 2022, the human attack surface, the potential victim pool, for cybercrime will reach 6 billion, which is 75 percent of the projected 2020 world population of 8 billion.

So, if you want to be scared, chew on the incontrovertible fact that you and your business are being attacked today, and you will be attacked tomorrow and the day after and the day after that. Obviously, you need excellent cybersecurity—firewalls, antivirus software, antimalware software, automatic downloading and installation of the latest security patches for all your software, and a workforce educated in basic digital hygiene. Yet the hard truth is that even the best cybersecurity will be penetrated. Some of those daily attacks will pierce your perimeter defenses.

Mediocre security will stop some attacks. Good security will stop more attacks. The best security will stop even more. But, whether mediocre or exceptional, all security will ultimately fail. You will be breached, and, if you depend on security alone, the effects of the next breach—the next inevitable breach—may be annoying or may put your business at great risk. This is why you need both excellent digital security and excellent digital resilience.  In short, you need to be prepared because you will be attacked.  Resilience starts with preparation.

 

“Resilience starts with preparation.” -Ray Rothrock

 

Shore Up Your Resilience

How to Build an A Team

a team

Build an A Team

Those who aspire to be successful quickly realize that individual performance isn’t usually enough. Only a team of committed individuals can accomplish great things. So a leader’s job turns to finding, selecting, and cultivating an amazing team.

If you wonder whether you are performing at your best, look at your team. My philosophy has always been that, if they are growing, your company will follow.

 

“Successful business leaders prioritize talent-development as a recruitment tool in the same way top athletic coaches do.” -Whitney Johnson

 

One way to tell whether you are growing is to look at where your team falls on the S curve. Based on Whitney Johnson’s proprietary research around disruption, every organization is a collection of individual S – or learning – curves. You build high performing team by optimizing these individual curves, including yours. In her book, Build an A-Team, you will learn how to manage people all along the S-curve and what to do when they reach the top of the curve. As employees are allowed, even required, to surf their individual S-curve waves, disrupting themselves, you will not only be less vulnerable to disruption, you’ll also be a boss people want to work for.

 

“The mind and skill-expanding opportunity motivates great engagement more than money or accolades.” -Whitney Johnson

 

After the release of your last book, Disrupt Yourself, you traveled and met the leaders of many organizations. As you spoke with them, what surprised you most?

Many people feel stuck, like a genie corked in a lamp; if somebody (usually their boss) would just pull that cork, they could make magic. They say, “I’m ready to disrupt myself. How can I persuade my boss to let me?” Or, “How can I get my team to disrupt themselves? How can I get my boss on board with that?” In Build an A Team I answer these questions and address the fact that, in most cases, fear of failure is the cork. We may be the cork in the bottle—our own, and our employees’.

 

“Want to know if you are about to be disrupted? Take the pulse of your workforce.” -Whitney Johnson

 

Be the Boss People Love to Work For