As an engineer, I’ve often had difficulty with the somewhat touchy-feely language used in leadership literature and HR departments. Rationally, I know that humans are irrational beings that excel at post-rationalizing their decisions and actions. And to reason about our irrational or pre-rational side, we need to use language that seeks to model that part of us. It’s just that it seems so incredibly hard to operationalize and turn into action.
Having said that, over the years and while working with dozens of companies, I’ve started to develop a gut feeling about the key challenges they experience. And often, their rational, clear and explainable limitations are driven by deep patterns in their culture and the personality traits of their leaders.
In most organizations, the leadership consists of people who excelled in the technology that was important one or two decades ago. We see in automotive and other industrial companies that most senior leaders have a mechanical engineering background. Although these skills were incredibly valuable at the time and often the basis for the careers of these leaders, the education and experience come with a lens that makes people almost unconsciously reject alternative viewpoints.
During the transition to smartphones in the mobile phone industry, many senior leaders were unable to imagine the importance of apps and a rich ecosystem of apps for their user base (I worked for Nokia at some point in the past). Currently, I meet many senior leaders, especially in industrial companies, who find it difficult to imagine how data can be valuable and an asset that can be used and monetized.
After the fact, it’s really easy to recognize what we should have done. As the saying goes, hindsight is 20/20. The hard thing is to recognize what’s happening and act accordingly in the moment as the disruption is unfolding itself. And even if you can see how the future will unfold, the next challenge is to get the company to follow along. In many cases I’ve been part of, by the time the organization gets in motion around a change, it’s so obvious to everyone what needs to happen that we’re way too late to play offense and all we can do is play defense and hope we don’t get disrupted.
Many moons ago, I worked with a manager at Philips who often said, “We can’t get it done faster, so we have to start earlier.” This is all the more true in a digital transformation: we need to start building new capabilities and skills long before it’s obvious that we need them. For most companies, it means bringing in data scientists and AI experts, but for a fair share, it also means hiring many more software experts as the company was stuck in an ‘atom-centric’ rather than a ‘bit-centric’ world view.
The reason for bringing in these skills earlier is that the ‘lens’ through which digital natives view the world is fundamentally different from those with a mechanical or electrical engineering background. One small example is the start of production for a new product. Traditionally, the view was that everything is done and over with once we start manufacturing. In a digital world, things are just starting when we have the product in the hands of customers as only then can we start the feedback loop with software and model updates to the field and data coming back from it.
The new viewpoint brought by these new digital natives will collide with the current company culture and it takes a long, long time for cultures to change. Initially, the new views are rejected, then grudgingly accepted on the edges of the business and slowly, over time, become a more and more integral part of the company. Hence, start early as it’s hard to accelerate the pace of change.
Digital transformation requires bringing new skills into the company. These skills are especially concerned with software, data and AI, but they bring with them a fundamentally different culture and lens on reality. Initially, the company culture tends to reject the ideas and it takes time to absorb the new skills and their implications. So, you better start early to make sure you’re playing offense, rather than defense with the fear of being disrupted. Remember, as Steven Case said, the pace of change and the risk of disruption create tremendous opportunities.
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