Digital
transformation halts, or fails, for many reasons—but most often it’s
because minor changes at the surface level do nothing to affect the
fundamental operations of a company. Real digital transformation
requires transformation at a deeper level—transformation of the
leadership team’s core beliefs. Changes of belief percolate throughout
an organization. This is why most digital transformations are a lot of
talk, a little action, and very little real effect.
Every
industry is built around some traditional assumptions, behaviors, and
beliefs about how to create value. These beliefs about value and how to
create it drive the strategies that leaders deploy, the people they hire
(and their competencies), and most importantly, the measurement systems
that they use to gauge performance and guide decision-making. In most
industries, the core beliefs are unassailable cannon—until the day that a
venture-backed startup comes along to upend them. Today, the list of
disruptive new entrants is expanding and the primary differentiator is
clear: they bring new mental models to existing industries and create
new business models that customers and investors love.
In
a world that is transitioning from physical to the digital and from
firm to network, maintaining a traditional focus is a sure-fire strategy
for failure. The ability to adapt is more important today than it ever
has been.
So
how do you evolve an outdated business model to one that offers better
revenue growth, greater profit margins, and lower cost? Start with
yourself. Changing your mental model is a prerequisite for changing your
business model. We have seen incumbents play catch up in the digital
age—even incumbents with decade-long legacies in asset-heavy business
models. But doing so requires leaders and organizations to upend their
core beliefs. The process usually looks something like this:
- Identify how your core beliefs manifest themselves in your business. Consider your guiding principles, time and capital allocation patterns, and the key metrics that you track.
- Uncover the core beliefs that motivate these behaviors. This step usually takes some ongoing reflection, and industry best practices likely influence your thinking. Focus on your beliefs about assets, value creation, and business model.
- Invert your core beliefs and consider the implications. Find an inversion that resonates with you—one that you think might actually be true—and consider how this new belief would change your behavior.
- Extrapolate what implications these new core beliefs would have on strategy, capital allocation and key metrics. Reflect on whether others in your industry are operating under these different core beliefs, and how they might lead to disruption. Consider the implications these beliefs would have for your customers, employees, suppliers, and investors.
- Act on your new beliefs and share them with your peers. Consciously change your actions until new habits form.
The
key step is inversion—taking on new thoughts and beliefs that will
likely conflict with those traditional in your industry and business.
Changing mental model is the important first step. The next is to
actually allocate capital differently.
What
about you and your organization? Are you willing to examine your
underlying beliefs? Are you willing to understand and invest in the
technology that supports new and more scalable business models? And, are
you willing to collaborate and share value with the networks around
you? If not, take the time to review our research and ask yourself, how
long do I have before network orchestration infiltrates my markets? We
think the answer is self-evident. It’s time to stop talking and start
doing.
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Developing
processes, programs and solutions to keep good employees on board
should be a top priority for business leaders. The more a company can
keep high-performing employees in their positions, the less it has to
worry about the time and money required to recruit, hire and train
replacements.
If
you want to ensure your best employees stick around for a while, focus
on employee engagement and happiness. Cultivating satisfied, motivated
employees will help you build a strong, experienced team.
So how are we building and maintaining a strong team? Here are three ways to lay the foundation:
1. Make a good first impression with employee onboarding.Getting employees off to a great start with your company can have a positive impact on employee retention. Create a robust onboarding program that helps new hires get to know your company, other employees and notable products and services. Offer formalized training to get new employees up to speed on software systems or tools they will be required to use.Your first impression can be a lasting impression, so it’s best to shoot for a good one if you want employees to stick around long term.2. Prioritize employee engagement.Keeping employees engaged with the business and each other is extremely important when it comes to employee retention. Those who feel disconnected or undervalued will be the first to jump ship.You can prioritize employee engagement by building a strong corporate culture, giving employees open opportunities to ask questions or voice discontent, establishing positive working relationships among employees and offering rewards or praise where merited. Most importantly, don’t forget to check in with your employees. Issue an employee satisfaction survey periodically to gauge employee happiness and find out how engaged your workforce really is.3. Create opportunities for employee growth.If you expect your employees to stay at your company for the long haul, you need to have plans in place for their growth and advancement. Very few people will be content to stay in the exact same position for years on end. You want to hold on to employees who are interested in contributing to the forward movement of your company.
Encourage
your employees to seek opportunities to gain new skills. Budget for
annual conference attendance, offer tuition reimbursement for advanced
education and allow time for personal growth projects. Make sure your
employees know you value both personal and professional
self-improvement. Making growth and advancement priorities at your
company will help you develop strong leaders in-house. You’ll be able to
create new leadership roles that existing employees can fill.
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Chris
Anderson, the curator of TED, has a new book out that demystifies what
it is that all those TED talkers have gotten so right. And it’s probably
not what you think. He insists that what is at the center of a good
talk is a good idea. Now that might sound obvious, but in the times
we’re living through, I actually think it’s close to radical.
An
idea behaves differently from a “message.” It’s not the kind of thing
you can wrestle down or order like room service. It’s more organic than
that, more mysterious. Ideas flash and pop and escape and build. They
intoxicate and then scurry. Sometimes they evade language. Sometimes
they stalk you. Ideas, after all, have to travel the complex
architecture inside of your own mind: 100 billion neurons, 1 to 10,000
synapses attached to each, all sending information through a chaotic,
elegant ocean (the brain is 75 percent water!).
Journalist
Ariel Levy, editor of The Best American Essays 2015, compares essays
(akin to talks in so many ways) to waves that a writer must catch, the
kind of act that requires a paradoxical mix of patience and readiness,
strength and serenity. At the heart of a great essay, she believes, is
always a great idea.
“The problem with ideas is that you can’t decide to have them. Searching for an idea is like resolving to have a dream.”
Another
journalist, Stephen Johnson, offers a different slant in his book Where
Good Ideas Come From. The trick to getting from a hunch to a great
idea is to let yours bump up against other people’s — particularly those
as unlike you as possible. Think scientists and poets, designers and
doctors, preschool teachers and presidents, all in generative dialogue.
Though we may lament what the internet is doing to our brains in so many
ways, it’s never been easier to find hunch-bumping buddies. Johnson
argues:
“Chance favors the connected mind.”
Author
Lidia Yuknavitch recently gave a deeply revealing talk where she argues
that for some of us, life is more akin to a “misfit’s myth” than a
hero’s journey. It’s the kind of idea that a dozen of the smartest minds
in advertising couldn’t write in a lifetime of brainstorming. It’s born
of one person’s hard-fought journey, and the wisdom is wrought.
For
me, ideas behave in all of these ways. I do experience an idea, at
first, as a hunch. So then I start looking for the patterns of that
“something.” This is where it gets more cognitive. I start connecting
dots between various newspaper articles I read and letting those
connections provoke questions.
“What does the exploding interest in tiny houses and communal living mean about the moment we are living in? What does this have to do with the American Dream and how it’s morphing?”
Then
I’m riding the wave — at least on my best days. I’m having my own
soul-searching moments about what I think success really is, and what
that has to do with how much money I make or whether I own a home or how
I spend my time. I’m seeing confirmations and complications of my
increasingly coherent idea everywhere I look. I’m asking smart friends
about it; or, even better, versions of it are coming up in conversations
naturally, helping me feel even more confident that I’m on to
something.
Eventually
I’m putting language to it. I’m pinning it down. I’m taking the risk to
humbly but confidently say it out loud and claim it as my own.
I’m
a fairly comfortable and effective public speaker, but much more than
being on the stage, I absolutely revel in the journey of idea formation.
I love the noticing, the connecting, the pattern keeping, the asking,
the wandering, the wondering, the languaging. There is a lot of struggle
and risk in it, but also such wildly huge rewards.
Chris Anderson, the curator of TED, writes,
“An idea is anything that can change how people see the world. If you can conjure up a compelling idea in people’s minds, you have done something wondrous. You have given them a gift of incalculable value. In a very real sense, a little piece of you has become part of them.”
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Tom
Peters. You know the guy. He branded himself with an “!” after his
name. He and Bob Waterman wrote one of the best-selling business books
of all time, In Search of Excellence: Lessons from America’s Best-Run
Companies (Harper & Row, 1982).
Peters
is one of the handful of people who helped transform the business book
genre from a staid backwater into a mass market — with 1.8 million
titles in print, it’s the fifth-largest book category on Amazon. He has
written 29 of those titles and sold more than 10 million copies of them.
In the process, Peters helped define the term business guru and
inspired more wannabes than Madonna. At age 73, he enjoys an engaged,
multigenerational audience, including 135,000 Twitter followers.
Peters
proceeded to debunk the premise of our call. For me, the whole reading
thing is about triangulation,” he said. “I like to think I’m a half step
ahead of the pack. But about three years ago, with all the crap that’s
going on, particularly with technology, I realized that I was 25 steps
behind. Since then I’ve probably read 200 books on this
[technology-related] stuff that’s going on around us. I could give you
50 good ones — including Rise of the Robots [by Martin Ford] and
Automate This [by Christopher Steiner] and, especially, The Second
Machine Age, by Andrew McAfee and Erik Brynjolfsson.”
Peters
doesn’t pretend that he’s on top of everything. But, he said, “I’ve
read my way to the point where I am willing to say confidently that (a) I
am not that far behind; (b) because I am reading, I am ahead of a lot
of people who ought to be way ahead of me; and (c) I can talk to people
who are kind of famous in this world and give them six things to read
they haven’t read, which gets me through cocktail parties. There is a
strategy, and the strategy is to read. If you read 100 books on a topic,
you’ll get a lot smarter.”
Peters
particularly loathes cognitive biases that lead us to overestimate
ourselves. “I really liked Fooled by Randomness,” he said. “[Author]
Nick Taleb explained that if you are lucky enough to have been born of
intelligent parents and if you work your ass off, you are statistically
likely to have a pretty good career. If your career is any better than
pretty good, it’s luck. There is no statement in life that I believe
more than that. And the set of people on earth who I most hold in
contempt are successful people who believe they deserve it.”
Peters
loves these books not because they deflate our egos. “I love them
because they help us understand that we are not the brightest people in
the world, and there are 80 million things to trip over when we’re
making decisions,” he said.
How
can we become better leaders? Unsurprisingly, Peters had some
suggestions. “I think the people who run things ought to read a lot more
psychology and social psychology and a lot less finance and marketing,”
he said. Although many books highlight the success of large, well-known
companies, Peters believes we should look to midsized companies for
guidance. “I think they have the answer to all the world’s problems,” he
said.
Finally,
Peters said we shouldn’t limit ourselves to real-world case studies or
carefully constructed arguments based on social science studies. “I
think that our friends who we want to encourage to read ought to spend
40 percent of their reading time on fiction,” he said. “I don’t usually
make it through 1,000-page novels, but I finished Haruki Murakami’s
1Q84. It’s about people; it’s about relationships; it’s about the
nonlinearity of life. I think if you understand that kind of stuff, you
can navigate the world a whole lot better.”
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