“We’ve been talking about change for 20 years. Why will it be different this time?”
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Q&A WITH SCOTT ANTHONY and Michelle Mahoney
How does the information action paradox fit with your earlier poll question about having the right talent? I am with a large corporation, and I hear the comment a lot that we don’t have the right talent, my view is different and focuses more on how much untapped, underutilized talent we have in the organization.
Innosight’s “house view” largely agrees with this. In our article, “How Leaders Delude Themselves About Disruption,” we make this exact point. There’s a great story from DBS Bank that helps to illustrate the opportunity. As part of its transformation journey, DBS was visiting Netflix. An executive said something along the lines of, “You at Netflix have it so easy. You just hire young talent from Silicon Valley. We have old, tired bankers.” Netflix asked DBS how old its engineers were. It turned out the average age of the engineers was about the same. Then, Netflix said something that transformed DBS’s perspective. “Many of our engineers come from banks like yours. We just get out of their way.” That’s the innovation opportunity for many large organizations!
It is challenging to convince an organization to change an existing business model to address new entrants when there are major competitors who are not changing and there is a real/perceived risk that changes in the acquisition model will provide an opening for them to aggressively steal share. How can you balance the old with investments in the new?
This is the essence of the idea of our book Dual Transformation. There are two reasons why companies fail. One is missing a big disruptive shift. The other is by taking the eye off its existing business. You really do have to do both. Our colleagues Alasdair Trotter and David Duncan have done an excellent series of reports about what it takes to create and manage innovation portfolios that bring good rigor to this exact discussion.
“Be informed, not driven, by data” sounds a bit confusing.
Think about this analogy. Imagine you are in a car and you want to get somewhere. Would you stare only at your rearview mirror? Of course not. But if your decisions require perfect data, that’s what you are doing, because perfect data only exists about the past. If you are informed by data your eyes are looking forward. You might glance at your GPS or your dashboard to get a piece of information to inform what comes next.
How broad is the scope of “transformation” and “innovation” in this context? I often see leaders thinking that people-centered changes, such as improving the employee experience or being more client-centered, are the transformation they need, i.e. not structural transformation. I think that’s off-track — you?
I think in most cases we would view that as table stakes. The question is are you really changing the essence of the business model, how you create, capture, and deliver value. You might need to do what you have described in order to do that, so it very much could be necessary but not sufficient.
I really like the assumptions vs. beliefs method. Any tips on how to make it happen?
It’s really quite simple actually. What you are trying to do is avoid battles of beliefs, where people start arguments by saying “I think” or “I believe.” Notice both statements start with the word “I,” so you have immediately connected the person and the idea. The discussion becomes instantly personal. A battle of assumptions starts with a statement, “the critical assumption is.” You have de-personalized it. So, if you want to make it happen, repeatedly ask a simple question: what critical assumptions are informing our decision?
How do you ensure alignment remains balanced as you change and new people come in?
This is a great question. One thing you can do is to make sure you share the story of how you got here. Let people feel like they have come along the journey. Of course, you also have opportunities during the hiring process to make sure that people are bought into the future direction of your organization. Our experience is generally that top leaders, who have the ability to step above the fray, typically get the need to do something different. New hires or people at the grassroots do as well. It is the middle of the organization that presents the greatest challenge. Not out of malice, simply due to the middle of the organization is busy running today’s business, which makes it harder to see the signs to do something different. They also grew up in today’s business, so there’s a lot that becomes engrained. That’s where people really should focus their efforts.