Your Playbook to Digital Transformation

Digital Business Transformation concept with arrow of compass (3

Reach for the Future

Nearly every business is impacted by digital transformation.

The key question for leaders is how to overcome the pull of the past to reach for the digital future. The authors of Digital@Scale: The Playbook You Need to Transform Your Company have developed a playbook based on years of McKinsey experience and research.

I recently spoke to author Anand Swaminathan, Senior Partner in McKinsey’s San Francisco office, about the book and his work in the area of digital transformation.

 

“Change is the end result of all true learning.” -Leo Buscaglia

 

3 Barriers to Change 

What do leaders need to know about identifying the barriers to change?

In our experience, executives face a fundamental conflict: Change requires a sense of urgency while highly-efficient organizations tend to have high levels of inertia. When business is going well, managers and employees generally only pay lip service to change requirements. Knowing that, there are three barriers we’ve identified:

  1. The good is the enemy of the better: Efficient, currently successful organizations often slow down the necessary change: Why cannibalize what is successful today? Why destroy efficiency gains of a ‘well-oiled machine’?
  2. Watch out for your top team: Ironically, today’s most successful managers might be the ones slowing down your transformation efforts since they have the most to lose. Transformation needs to start with the person at the top, and it’s often those who have grown accustomed to success that find it most difficult to change course.
  3. Your DNA takes time to change: Don’t underestimate the time and effort required to change deep-rooted mindsets and ways of working. Your legacy business exerts a natural gravitational pull that will stop all meaningful change unless you’re persistent and change at enough scale to break through

 

“Transformation is often more about unlearning than learning.” -Richard Rohr

 

What is the role of the CEO when it comes to digital transformation?

The successful digital transformations we see out there have one common denominator: the CEO spearheading and promoting the digital transformation. They are making it front and center of their personal agenda. Only if change is demonstrated and exemplified by the top management will the necessary changes to structures, processes, management instruments, as well as the establishment of new skills and new IT systems, be successful. That can mean using new technologies, challenging existing ways of doing business, and making the bold decisions necessary to change the trajectory of the business.

 

Assess Your Readiness

How can management assess the current strategy of the company and its readiness for digital transformation?Digital@Scale book cover

That’s two questions. The first is understanding your strategy, and that requires looking at sources of value – where they’re created in your business and in your sector. Most important, you need to look at where sources of value are being created outside of your sector – that’s where some of the biggest changes (and challenges) might be happening.

Then you need to look at where you are today and what needs to change. There are lots of assessments and diagnostics out there, but you need to take a cold-eyed view of where you are as a digital business and what needs to be in place to drive value at scale. As an example, we have developed a comprehensive benchmark to derive a company’s Digital Quotient (DQTM), road-tested with several hundred organizations across the globe. It helps leadership to take stock compared to best practices across sectors and within its own industry.

In addition to the benchmark, some questions that management should start with to determine the urgency and their organization’s readiness for change include:

  • Are we assessing whether we can use our strengths to penetrate completely new industries within the current rules?
  • Are we actively creating an ecosystem of partners, customers and suppliers that will last into the digital world?
  • Have we defined a feasible timescale and meaningful KPIs to reliably measure success or failure?

 

“Transformation literally means going beyond your form.” -Wayne Dyer

 

Break the Silos

How to Manage to Make a Difference

make a difference

Make a Difference

If you’re a new manager, you may find yourself in unfamiliar territory faster than you can imagine. How do you handle the gossiping employee? Or the top performer about to jump ship? How do you develop a high-performance team?

Larry Sternberg and Kim Turnage have literally packed numerous tips, strategies, tools and techniques for managers into the pages of their new book, Managing to Make a Difference: How to Engage, Retain, & Develop Talent for Maximum Performance. I recently spoke with Larry about their new work.

 

“We can change the world and make it a better place.” -Nelson Mandela

 

Why Employee Orientation is All Wrong

Your book starts out saying that we have employee orientation all wrong. We too often start with scare tactics and explaining what will result in termination. What does this do to new employees?

Frankly, the gratuitous negativity turns people off. The new employer is building the case for termination on day one! Also, it’s just plain boring. Negative and boring are not strategies to increase engagement and positivity about starting a new job.

You might say that these kinds of statements are necessary in our litigious society. We happen to disagree with that point of view. But even if we were to agree that they are necessary, they diminish your efforts to engage and retain people.

Imagine you’re dating someone, and you start a discussion about being exclusive and moving in together. The other person replies, “I’d love to do that! But first I want to make sure you understand the reasons I might decide to end this relationship.” How would that make you feel?

 

Go Ahead: Get Close to Your Team

I loved your advice on getting close to people. I’ve long advocated this. What are the benefits of getting close to people at work?

When you cultivate close, positive relationships with your employees (and among your employees), every employee spends his day with people he really likes and cares about. This increases job satisfaction, engagement and morale. Teamwork improves because employees are more likely to go the extra mile for people they care about. When problems occur, employees with good relationships will resolve them more easily. A leader who has close relationships with her employees can exert more influence on them without using her power. For instance, when she asks for extra effort, they’re more likely to give it.

 

Leadership Tip: the closer you are to someone, the easier it is to influence that person.

 

Talk about the importance of setting expectations.

5 Roles of Great Change Leaders

change management

Become a Great Change Leader

One of the most important skills of a leader is managing and accelerating change. What makes change stick or fail is a fascinating topic, one that most new leaders struggle to understand. Mastering the art of change is a challenge and yet one that is well worth the investment. Because all great leaders are change agents.

Kendall Lyman and Tony C. Daloisio studied change for the last decade and have packed their key takeaways and learnings into their new book, Change the Way You Change! They outline the five roles of great change leaders. If you want to accelerate your leadership and improve your results, this book is a blueprint on how to orchestrate your change efforts.

 

“The only constant is change.” –Heraclitus

 

5 Roles of A Change Leader

In your book, you talk about five roles for change leaders. Is one more commonly a problem for a leader than others?

This is a question leaders ask us a lot, probably because they are so busy running the business that it’s hard to think about improving their leadership. We have found that each role of leadership has its unique challenge. For example, the FOCUS role requires a leader to get everyone on the same page and pull in the same direction. And the ALIGN role requires leaders to ensure that all of the processes, structure, and systems are aligned to the direction of the organization—a daunting task to say the least. But the role of leadership which is probably the hardest, takes the most time, opens up the organization for pushback, and has the most potential if done effectively is the ENGAGE role. Most leaders who put a lot of energy and money into the diagnosis and design of a new organizational solution are so excited to implement the new idea that they take very little time to syndicate that direction with key stakeholders either during design or before execution. True engagement done well holds the key to open the minds, hearts, and hands of employees required to implement by helping them change and adapt to make the new solution a reality.

 

“The world fears a new experience more than it fears anything.” –D.H. Lawrence

 

How is your approach to change different from others?

In all the books we read, the authors (and many change practitioners) argue that change starts one way or another. Some say that change starts with individuals. Others claim that individuals can’t really change until the organization does. But after helping lead transformations for years, we asked ourselves, “How does change really happen? Does change happen from the inside-out or from the outside-in?” In other words, is the most effective way to change an organization accomplished by helping individuals change so they, in turn, can change their teams and the organization (inside out)? Or is the best approach to improve the organizational elements of strategy, processes, and structure, and then expect teams and individual behavior to align with the changes to deliver better results (outside-in)? And we asked, “Does it have to be either/or?” After many years of considering this question and approaching change using one approach or the other, we have found that the answer is “no.” Instead, for change to be sustainable, it requires both an inside-out and an outside-in approach. To change a team or business, a leader must change both the thoughts and beliefs and the structure and systems. And to get it to stick, all levels of the organization (individual, team, and organization) must be focused, aligned, and engaged on the same thing—and that takes leadership!

 

“Nothing is so dear as what you’re about to leave.” –Jessamyn West

 

How the Best Leaders Initiate Change

How A Leader’s Personality Impacts the Ability to Win

built for growth

Built for Growth

Many business books are written on how to innovate, achieve faster growth, or beat the competition. I’ve not read many that focus on the personality of the leader. But the founder’s personality has a dramatic impact on all aspects of the company culture and its potential.

That’s the core focus of Chris Kuenne and John Danner’s new book, BUILT FOR GROWTH: How Builder Personality Shapes Your Business, Your Team, and Your Ability to Win.

If entrepreneurs understand their personalities, it will help them choose the right team to enhance their strengths and manage around their weaknesses.

I recently spoke with the authors about their fascinating research into personality in this context. John Danner is a senior fellow at the University of California Berkley’s Institute for Business Innovation. A faculty member, a business adviser, and an entrepreneur, he speaks widely on topics from innovation to strategy. Chris Kuenne is a member of Princeton University’s entrepreneurship faculty, a growth capital investor, an entrepreneur, and a speaker.

 

“To win in the twenty-first century, you must empower others.” -Jack Ma

 

3 Reasons Personality is Misunderstood

Personality is one of the least understood elements of entrepreneurial and business success. Why is that still the case after decades of study and research?

We think there might be three converging reasons. First, the business world often tends to overlook introspection and reflection in its bias for action and results, so the issue of who you are can get lost in the impatient focus on what you’ve done. The “do” trumps the “who.” But as any manager or leader knows, personality does matter . . . a lot; so that action-bias has left a void in our understanding.

Second, we love icons. Movies and the media naturally latch onto a compelling storyline, a fascinating individual, and retell that one person’s experience, character and personality. But icons can quickly become stereotypes, and those stereotypes reinforce the notion that you have to be an extraordinarily exceptional person to find success as an entrepreneur. That shorthand can substitute for a deeper understanding of what’s really at play here. In other words, every entrepreneur doesn’t have to be a Steve Jobs or Elon Musk to be successful; our research discovered there are four distinct personalities of successful entrepreneurs. And there are likely millions of individuals the world over who share those same personality patterns.

Third, although most people are intensely curious about who they are and how they’re wired, most personality assessments are ill-suited to the task of cracking the code of successful business building. Many address very broad issues, e.g., am I an extrovert or introvert, a Type A or Type B, etc. Or they’re designed to answer other questions in personal domains, like who might be a good match for me, what music might I like, etc.

Some broad-gauge tools can help people decide whether they might be cut out for entrepreneurship generally, e.g., are they comfortable with taking risks or working for themselves? But those resources don’t address the fundamental question: what are the key personality characteristics of the women and men who actually succeed in building lasting businesses of impressive scale? What makes those individuals tick, and am I like any of them?

And context is key here; people want to know about personalities in action in particular settings. That’s why we concentrated on examining personalities in the context of successful business ventures and used a patented Personality-ClusteringTM methodology that has proven its effectiveness in decoding specific customer behavior in hundreds of markets around the world.

But our research is just a first step in understanding the central mystery of the who of successful entrepreneurship. We invite others to build upon our findings as we refine our own work. After all, entrepreneurship is vital to economic growth and opportunity globally. We welcome others’ insights into this complicated and essential domain of human endeavor.

 

“Teams need captains, and vice versa-if you want to get things done.” -Mark Coopersmith

 

4 Types of Builder Personalities

Briefly walk through the four types of Builder personalities.

The Driver: Relentless, Commercially Focused, and Highly Confident – Drivers can’t help themselves. They have to become builders of business or social ventures of their own as a means of self-validation. Entrepreneurship is almost hardwired into their very identity. They are supremely confident individuals, fixated on their products, relentless in pursuing commercial success based on their uncanny anticipation of what markets and customers are looking for. Drivers – like Steve Jobs or Elon Musk – often don’t last long as employees in other people’s organizations. They eschew rules and bureaucracy, seeing them as tools to focus the average person, yet often confine the truly gifted, independent-thinking actor. These builders are willing to do whatever it takes to realize the commercial success inherent in what they believe is their unbounded potential, in fact their destiny.

A Leader’s Role in Achieving Excellence in Execution

Leadership execution
This is a guest post by Robin Speculand, author of Excellence in Execution: How to Implement Your Strategy. Robin is the founder and CEO of Bridges Business Consultancy and creator of the Implementation Hub.

Don’t Lead by Example

To guide an organization through the execution of its strategy, leaders… don’t lead by example.

In strategy execution, leaders are responsible for driving the strategy forward and championing the direction the organization is heading. This involves, for example, reviewing progress, coaching people, resolving issues, and ensuring the right outcomes are being achieved. Leaders don’t lead by example as they don’t implement strategy; their employees do.

Before you even start your strategy execution, the odds are stacked against you as more fail than succeed. I have seen from my seventeen years consulting in this field that leaders are guilty of delegating the execution and not paying adequate attention to it. When leaders do this, their people also stop paying attention to it. McKinsey & Company stated that, “Half of all efforts to transform organization performance fail either because leaders don’t act as role models for change or because people in the organization defend the status quo.”

 

Show Confidence in the Strategy

If leaders perceive execution as an interruption to the business, they will not drive and champion it.

Anything short of embracing a new strategy and its execution by leaders can be seen by employees as a lack of confidence in the strategy itself. That feeling will spread throughout the organization.

  • If you only apply lip service to the execution without championing it, employees will sense the lack of commitment and not step up; the execution will fail.
  • If you don’t create the time to oversee the implementation journey, change the agenda and explain why the organization needs to transform, then employees will sense the lack of commitment and not step up; the execution will fail.
  • If you don’t set the strategy and create the budget to allocate required funding, employees will sense the lack of commitment and not step up; the execution will fail.

 

Booz and Co. Survey: 53% don’t believe their company’s strategy will lead to success.

 

A key question to consider is:What are you willing to do to execute your organization’s strategy?”

In contrast, strategy execution progresses when leaders support their comments with time and actions. Because only so much can go on a leader’s radar, he or she has to carefully select which actions will best drive the execution forward and where to invest their time.

Booz & Company surveyed executives from around the world on the results of their organizations’ strategic initiatives. Given more than 2,350 responses, the findings suggest a high degree of disillusionment, including:

  • Two-thirds (67%) say their company’s capabilities do not fully support the company’s own strategy and the way it creates value in the market.
  • Only one in five executives (21%) thinks the company has a “right to win” in all the markets it competes in.
  • Most of the respondents (53%) don’t believe their company’s strategy would lead to success.

If leaders don’t believe in the strategy, they will never be authentic and sincere in executing it.

 

PWC Survey: 55% of CEO’s state lack of trust is a major threat to growth.

 

Demonstrate Increased Commitment