A Digital Wake Up Call

digital darwinism

Digital is Everything

 

“Digital isn’t a thing, it’s everything.” That’s the first line I read on the back cover of Tom Goodwin’s new book, Digital Darwinism: Survival Of The Fittest In The Age Of Business Disruption.

That’s the type of attention-getting line that speaks to the massive transformation in today’s organizations.

Change or become extinct is a powerful message.

Tom is the EVP, Head of Innovation for Zenith Media. His role is to understand new technology, behaviors and platforms and ideate and implement solutions for clients that take advantage of the new opportunities these make possible. He was also voted the #1 voice in Marketing by LinkedIn with over 580,000 followers on the platform. An industry provocateur and commentator on the future of marketing and business, Tom recently wrote Digital Darwinism as a wakeup call to traditional businesses.

I recently spoke with him about his book.

 

““Digital isn’t a thing, it’s everything.” -Tom Goodwin

 

The subtitle of your book is “Survival of the Fittest in the Age of Business Disruption.” What defines the fittest?

I believe the fittest companies are those with the balance of a solid business plan for today and for the future. This can either be because they’ve established a defendable niche for now and ahead (like Amazon or Tesla) or because they have a team and culture that is able to adapt to the changing marketplace. Good examples of this are Facebook, Netflix, and Google. Fitness both in nature and business is about agility and the ability to change as the world does, but also about the quality of the business model today. There are too many companies that are widely celebrated, like Dollar Shave Club or Movie Pass, that offer hockey-stick user growth and happy customers, but don’t appear to have a semblance of a business model that can ever make money.

 

“The fittest companies are those with the balance of a solid business plan for today and for the future.” -Tom Goodwin

 

Innovate with Purpose

Mature companies often have a huge desire to innovate and launch various initiatives. What are some of the biggest mistakes you’ve seen them make in their pursuit of innovation?

Most innovation failures come from companies who do one of two things wrong. The main one is not going deep enough. They offer surface level improvements on the façade of a deeply troubled foundation. Retailers who need to close stores or entirely rethink distribution models or procurement flows, end up making a store in San Jose with a smart mirror, as it’s way faster and cheaper and offers distractions. Or car companies that celebrate apps where you can start engines remotely, while they are behind on electric propulsion. The issue is that most CEOs don’t have the time or thirst for risk to make proper changes.

The other issue is innovation with no sense of purpose. It’s adding a chatbot because your boss read about them one day. It’s an airline launching a mood-sensing blanket that gets press. It’s the VR experience to try to get promoted. We need to know why we are innovating and maximize against that.

 

“There are too many companies that are widely celebrated that offer hockey-stick user growth and happy customers, but don’t appear to have a semblance of a business model that can ever make money.” -Tom Goodwin

 

Common Traits of Disrupters

How to Navigate the Digital Tsunami

Digital Tsunami

The Age of Surge

What do Netflix, Spotify, and Google have in common? They all learn, innovate, and continuously adapt better, faster, and cheaper than traditional companies. Moreover, they use digital technology to innovate, disrupt, and grow in radical and dynamic ways. That’s how they surge ahead of traditional companies.

In THE AGE OF SURGE: A Human Centered Framework for Scaling Company Wide Agility and Navigating the Tsunami of Digital, organizational experts Brad Murphy and Carol Mase show how companies can leapfrog the competition by transforming not only how they develop products and services but also the organization itself around the digital paradigm.

“Leaders need to nurture a new value system that says your value to the organization should no longer be anchored to your job title or role.” -Brad Murphy and Carol Mase

 

How to Use Surge to Your Advantage

What is “Surge” and how do you use it?

SURGE is a framework that provides the tools for navigating complex adaptive challenges in large corporate businesses. The digital marketplace continues to be highly disruptive to the ways that companies engage with customers, innovate, and remain relevant. The traditional approach to navigating disruptive change has been to seek out a prescriptive formula and apply it to the whole company. The journey of transforming to a digital enterprise, however, is not a process upgrade or best practice adoption problem.

In our work with large companies, what we saw as a consistent point of failure is them seeking a paint-by-numbers formula—agile process frameworks being a classic example. Despite making significant financial and organizational investments, they’re still not producing the customer experiences we expect from digital native companies like Amazon, Netflix and Google. We saw a clear need to help leaders recognize that this is a journey, not a reboot. Digital has changed the dynamics of the marketplace forever.

 

“Digital has changed the dynamics of the marketplace forever.” -Brad Murphy and Carol Mase

 

How do traditional companies versus digital native companies differ when they view impending change?

The most profound difference is that digital native companies are designed for change. Traditional companies are not. If you are Amazon or Google, one of the fundamental principles is that the space you are seeking to deliver products and services into is subject to continuous change. Therefore, the organization itself needs to be competent in enabling this change to occur. Companies can no longer accurately predict the future. They must learn to co-create products and services with their customers by evolving rapidly with them.

Contrast that with most traditional companies that have built a legacy based on a physical experience. Banks have branches, car companies have manufacturing plants, retail stores have buildings. Physical things take a long time to plan, build, and establish. As consumer preferences have increasingly shifted to adopting digital platforms, these companies have bolted on the veneer of a digital experience. Their preference is to avoid change. So you have a conflict between consumers who have gone digital and the fundamental structure of the business, which was built for a physical world.

 

“The ability to role shift is essential to a successful business in a digital world.” -Brad Murphy and Carol Mase

 

Thrive in the Midst of Uncertainty

Build a Powerful Culture of Freedom and Responsibility

powerful

Powerful

Sheryl Sandberg of Facebook called the Netflix “freedom and responsibility” deck “the most important document ever to come out of the Valley.”

The document is 124 pages and it outlines the principles behind the unique corporate culture at Netflix. It has had reverberations far outside of Silicon Valley and way beyond Netflix itself. The principles have been debated and adopted by organizations throughout the world. It has been viewed over fifteen million times.

Patty McCord helped write the document. She worked at Netflix for 14 years as the company’s Chief Talent Officer. In her book, POWERFUL: Building a Culture of Freedom and Responsibility, Patty shares what she has learned about building a high-performance culture. I recently asked her to share more about her experience.

 

Challenge the Rules

You challenge many of the existing HR rules with new ways of thinking. What advice do you have for leaders that will help them embrace these changes?

It begins with questioning, literally, everything we do in HR: policies, procedures, guidelines, practices, permissions. What is the purpose of each of these activities? Do they achieve the desired result? If you started from scratch, would you embrace these methods?

 

“People can handle being told the truth, about both the business and their performance. The truth is not only what they need but also what they intensely want.” -Patty McCord

 

Many people think that compensation rules the day, but you have a different philosophy. What’s the “greatest motivation”?

I truly believe the greatest motivation is to be part of an amazingly talented team that gets real work done that matters to our companies and our customers.

 

“Be selfless in debating. That means being genuinely prepared to lose your case and openly admitting when you have.” -Patty McCord

 

Hold Rigorous Debates

Why Pixar, Netflix, and Others Succeed Where Most Fail

Build an Extreme Team

 

Teambuilding.

It seems easy enough. Hire talented people who are motivated to achieve something and together the team is formed.

What could go wrong?

Most of us who have been in leadership positions realize that building a team is far more difficult than hiring talented individuals.

It’s a process. From understanding individual styles to improving communication, it’s a constant effort.

That’s why nearly every leader I know is constantly working on the team.

One of the experts I follow is Robert Bruce Shaw. He’s a management consultant focused on leadership effectiveness. He has a doctorate in organizational behavior from Yale University and has written numerous books and articles.

He’s also an expert on teams and has a new book out: Extreme Teams: Why Pixar, Airbnb, and Other Cutting-Edge Companies Succeed Where Most Fail. After I read his new book, I asked him to share some of his research with us on teams.

 

“Extreme teams realize that tension and conflict are essential to achieving their goals.” -Robert Bruce Shaw

 

Elements of a Highly Successful Team

What are some of the elements of a highly successful team?

I assess a team’s success on two dimensions.  First, does the team deliver the results expected of it by its customers and stakeholders (in most cases, more senior levels of management within a company).  Does it deliver results in a manner that builds its capabilities in order to deliver results as well into the future?  Second, does the team build positive relationships among its members as well as with other groups?  This is required to sustain the trust needed for a team to work in a productive manner over time.  These are the two team imperatives:  deliver results and build relationships.

 

What’s an extreme team?

Teams that continually push for better results and relationships are what I call extreme teams.  Most teams work in a manner that emphasizes either results or relationships – and fail to develop each as an important outcome.  In addition, some teams settle for easy compromises in each area in striving to avoid the risk and conflict that can come when pushing hard in either area.  For example, a team that pushes hard on results can strain relationships.  Or, a team that values only relationships can erode its ability to deliver results.  Extreme Teams push results and relationships to the edge of being dysfunctional – and then effectively manage the challenge of doing so.

 

“Results + Relationships = Team Success.” -Robert Bruce Shaw

 

Foster An Extreme Team Culture

How do leaders help foster a culture where extreme teams thrive?

My book examines five practices of cutting-edge firms that support extreme teams.  These firms are unique in how they operate but do share some common practices.  I will mention three of these success practices:

1) They have a purpose that results in highly engaged team members.  This purpose involves the work itself but also includes having a positive impact on society.  Pixar, for example, attracts people who are passionate about making animated films that emotionally touch people.  Patagonia attracts people who love the outdoors and want to do everything they can to protect the environment.

2) They select and promote people who embody their core values.  Cultural fit becomes more important than an impressive resume.  Alibaba looks for people who fit its highly entrepreneurial culture.  The firm’s founder, Jack Ma, describes this as finding the right people not the best people.

3) They create a “hard/soft” culture that works against complacency.  In extreme teams, people realize that they need to be uncomfortable at times if they are to produce the best results.  This need is balanced against the need for people to feel they are part of community that supports them and their success.  Each firm I profile in the book does this to a different degree and with different practices.  Each, however, is more transparent and direct than conventional teams.

 

“Cutting edge firms have a critical mass of obsessive people and teams.” -Robert Bruce Shaw

 

Deciding what not to do is an important challenge. What do the best teams do to focus?