Speed of Transformation


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“How fast should you transform your business?” . This is my favorite question to ask business leaders these days . I am yet to run into even one leader who told me that they have time on their side – every one wants to transformright now, which is absolutely great to hear. This is also totally in line with what my analyst friends have typically opined too over the past couple of years. And yet – there are very few “all in” transformation initiatives in the world of large enterprises. Many leaders choose incremental transformation even though theyreally want to take a more aggressive approach.

It’s catch 22 on many dimensions for leaders of large companies to jump in with both feet.

Planning can be scary: Change is hard even on good days. It is much harder if you do it in an unplanned way. Waiting for every i to be dotted and every t to be crossed via detailed planning is not helpful either – you will risk missing the market opportunity.

Rules for startups don’t apply to you :  You want to be the next Uber . But your investors have a different yardstick to measure you, even if they too want you to be Uber. A large public company taking risks get punished in the market by institutional investors for putting profits at risk . The same institutions will yell at startup CEOs for worrying about profits instead of growth. Larger companies with diversified portfolios can take on a lot of risk if markets favored the approach -but that is not how it plays out for the most part. So leaders shift to the safe approach – contain costs as way to manage profit, as oppose to invest for future growth. There are notable exceptions like Amazon etc – but they are exceptions.

Ring fencing only goes so far :  A popular large enterprise strategy is to ring fence an innovation team to help them incubate and grow a new business without the organizational antibodies killing it in the bud. The typical result is that a bunch of amazing “proof of concept” projects will come out in fairly short time and show tremendous promise in pilot implementations. Yet – most of them don’t scale sufficiently into a big business. This happens for many reasons. For example – scaling needs a different mindset from “proof of concept”. It is a lot of boring grunt work that the “innovation gang” feels is beneath them. They would rather do the next cool proof of concept. The larger organization feels no ownership of the new idea that got thrown over the wall to them, and finds faults with it from the get go and kills it at the first opportunity. Again , there are a few exceptions – like say IBM Watson, but again – they are exceptions.

So how fast can you transform your business ?

Hard to answer, but I think empirically we can say that it is a function of how fast you can transform yourself as a leader.

Grey is the new black : Perhaps Grey was always the black, just that we didn’t give it the due credit 🙂 . You need an extreme ability to let go of the world of black and white and work in varying shades of grey. It is not easy and does not come naturally to many of us . Early leadership roles in most companies are all about tweaking prescriptive policies already in place, with very little encouragement for radical change.

Communication is the biggest weapon  : Transformation typically fails by default – you need to nurture it on a full time basis to let it thrive. The main reason it fails is because you don’t talk about it enough. Although they are exceptions, successful companies who could convince investors to go along have all had leaders who are excellent communicators. At least in theory , Investors like predictability – if you feed more information to them to make their models work, they tend to like you. External communication is not really the big deal in my opinion – many transformation initiatives fail mostly because of an abject failure in keeping the larger organization informed. I know IT organizations who thought they have successfully shifted to agile getting upset when business does not give them due credit for their transformation. In almost every case – it was a failure to keep the business informed along the way on what is changing and what is the big deal. Hanging banners with clever slogans in office does not substitute honest person to person communication

Best persons for the job : Nothing shows the level of commitment to transformation like the people you put on the initiative. This is also where most businesses fail. If your most proven folks get to run established businesses instead of your transformation initiative, then the message you are sending the larger organization is that 1: you are not all in, and there is no need for them to be all in either and 2: you don’t have confidence in your leadership bench to backfill the current top leaders. This particular aspect is close to home for me – a big reason for my coming back to IBM after a gap of few years was the type of people investments that IBM CEO was making on Watson, Analytics and other new business units. The leaders – from General Managers, to their staff, and to people working for them – were all accomplished folks who had successfully run huge businesses before. That gave me tremendous confidence that IBM is serious about its transformation and that it is the right place for me.

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