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Why does it take so long for big corporations to change? Reaktor’s Peter Lindberg shares practical tips for speeding up transformation.
Have you ever heard a company state that they want to be more bureaucratic, stagnated, or focused mostly on internal matters? Me neither. Instead, there’s a lot of talk about agile transformation, innovation programs, new digital leaders, and even trainings for employees to feel more empowered. Still, the results of these agile transformations tend to fall short. New products and services take years rather than weeks to come out of the oven.
A representative of a large retailer was speaking at our event a while ago, and something he said truly opened my eyes. “We ran a five-year transformation program before scaling up our eCommerce by 1000 percent,” the eCom chief said. He spoke about breaking down silos, looking into incentives and structures, and being autonomous and directly market-driven. The company was able to put in the time and investment, so they succeeded. However, I feel like those five years equal to like a hundred million years on Internet time. Who can actually afford that? And why does it take so long for big companies to change?
Ever since The Wealth of Nations by Adam Smith, we have been exposed to a certain kind of business logic: things proceed in a one-way flow that you want to compartmentalize endlessly, sub-optimize, measure, and control. Everything we’ve seen in business is by some means based on that.
Now that logic is gone, however, because of automation, artificial intelligence, and such. Pouf! No need for organizational pyramids, endless middle management layers, or even ROI calculations based on historical numbers anymore. Everything on a corporate level is built for the old world and mostly useless in the digital age. That’s why there’s a transformation program in most of our large customers – and that’s why they are so tedious and often fail. The task is enormous, and every cell of our cultural DNA is against it.
Spearhead projects create a positive demand for change
Business owners tend to have a mindset of merely buying whatever they need: strategies and supporting organizational plans, talent acquisition roadmaps, brand renewal programs, and whatnot. There’s no time for that anymore, however – say goodbye to hours of board interviews and piles of slides. To accelerate transformation, we need actual impact.
While there’s no silver bullet to fixing this, there’s a bunch of things companies can do to speed up change. For starters, it’s essential to combine strategy work with execution by, for instance, defining horizons, finding priorities within the digital strategy and creating end-to-end MVP’s first and then iterating the perfect solution directly towards market demand. This means that the team is autonomous and responsible for the whole value creation process. It also requires business owners to be part of the team, and ideally 100 percent committed to one service or product.
However, if you think of this as a separate spinoff project, you can end up creating more silos and adding to the legacy problem (you can read my previous blog post about technical debt here). So instead, you should plan these spearhead projects to act as showcases of the new world, feeding back to the big transformation program. The projects can serve as “hero examples” and create positive demand for change in other parts of the organization.
What does a team with a change mindset look like, then? Insourcing is often on the agenda, and you should be open about it. You should try to find critical competencies within the organization and build large mixed teams with inbuilt training and coaching. Having senior experts from your consultancy partner can then offer practical examples and mentoring to help your own employees start running critical functions. Acquiring the right talent in an overheated market can be challenging. Hence, it’s crucial to make sure your brand supports the recruitment of top talent. What if you connected the spearhead transformation projects to HR and marketing?
Getting the incentives right is also something worth looking into. They could be connected to a corporate level ambition, shared by the whole team and a 100% equal between the team members. Tying the incentives to one common goal (online growth, for example) could help you eliminate silos, individual optimization, and separation of support functions.
IT and DevOps can turn into a purposeful collaboration
What’s the IT department’s role in this, then? Having worked as an IT manager before, I remember that people expect everything to work, and they only contact you when they aren’t happy. There’s a constant flow of new and conflicting demands: the business people need new speedy solutions and results while the IT is also trying to keep the corroding legacy systems running. All this while also managing cloud transformations, creating common services, and keeping complex external threats at bay.
Collaboration with IT is vital in enhancing the transformation process. Wouldn’t it be simple to plan new things together so that new digital projects would help modernize the legacy systems? Each project would help pull the plug from some old systems, and things would be smoother and cheaper to maintain. I know this can sound like a utopia since this is where two different realities collide. While it’s possible to force the different parties to prioritize the development and IT budget, it can still be a painful process.
Having the IT in the same train with DevOps thinking could help. The same team would be responsible for both developing and maintaining the tech. The critical part is letting the team, including IT, plan a purposeful way of delivering business impact. Planning processes for processes’ sake isn’t enough – everything the team does should support the business.
How do these spearhead projects and teams differ from a big transformation agenda? Taking a meaningful and strategic initiative and using it as a small-scale “magic bullet” to connect all the dots of transformation can be quicker than overhauling everything at once. The spearhead project is a pilot of how things could be – kind of an accelerated version of transformation. Once it’s done, you can build the next end-to-end spearhead team to replicate the success. And then another one, and another one. At some point, most of the organization will be rather directly market-oriented and able to adapt to new situations.
What do you think? Combining the development of critical digital assets with the broadest possible strategic agenda could be just crazy. Or it could speed things up and transform the way corporations change. The first step in making an impact is believing in it.