Wednesday, January 15, 2014

CEO agenda for 2014 : build the management dashboard for your soon-to-be digital organization

The digital technologies that are slowly invading each step in the value chain of our corporations will transform what it means to lead and to manage them. Incumbent leaders would do well to take a deep, hard look at how digital technologies are transforming their corporation and then understand what new breed of talent they should develop to master this revolution.

The digital disruption and the talent shortage

You have probably already faced parts of it. Whether it is the transformed client relationship management through social media, the upheaval in procurement and alliances in multi-sided platforms or the increased part of revenue now coming in through your internet channels, your organization hardly bears any resemblance to what it was a mere two or three years ago.

Well, you haven’t seen the best part yet. Digital technologies are poised to impact every single element of your value chain, achieving the transformation of your pop-and-mom organization into a vibrant, agile, high flying digital organization.

Expect a few surprises during the ride. These technologies will continue to transfer large parts of your revenue generating operations to the virtual world. McKinsey, for instance, expects that consumer finance internet operations will account for more than 40% of revenue by 2017. (Finding your digital sweet spot, October 2013). More generally, the cost base of all industries will decrease through the use of digital technologies and incumbents will be hard pressed to reorganize their operations to keep pace with more agile new entrants, that do not have the burden of legacy systems.

But let’s take a closer look at this change in your organization’s DNA. It is brought about by a complex combination of technologies that are already mature but which are gaining mainstream status at a quicker pace than we were used to. Most of these are digital technologies (like cloud computing, big data, facial recognition, 3D-Printing or social technologies), even if corporations should also be on the outlook for unexpected breakthroughs in life sciences or environmental sciences.

You could argue that the transformation made possible by these technologies is already under way and some leaders might even boast of important successes. That might be true but it only tells half the story: the most important element to understand is that these first successes have been based on process or system changes, like automation of processes or improvement in automation of processes and improvement in data management and insights.

To move further along the digital transformation path, companies need to change the way their employees collaborate internally and externally. A specific breed of digital technologies, social technologies (best known as corporate social networks) are at the forefront of this change. According once again to McKinsey, social technologies have the potential to increase knowledge worker productivity by as much as 25%. To reach that prize of productivity improvement, much deeper changes that the ones that drove the first wave of digital transformation are needed. We think that, to engage in the way of success, organizations should manage a triple evolution, an evolution in their ways of working, an evolution in their management practices and an evolution in their organizational design.

The evolution in ways of working will take time as it entails new computer and IT skills, new real-time and contextual awareness and new collaborative behaviours. It will demand new learning and development strategies, and therefore will be long in the making.

In management practices, there will be a need to expand on much needed “command-and-control” practices by designing and implementing new governance practices at all levels. These government practices will aim at bringing operational and functional managers together in new collaborative decision making practices. The objective will be to develop a culture in which contextual decision making by any manager takes into account the complexity of the organization she is in, and not only its own functional or business unit priorities.

And finally, as organization design is concerned, there will be a double challenge: to experiment with new organizational structures that are made possible by the use of digital technologies, as many companies have already started doing with professional communities; and then, in a more fundamental way, to rethink the way in which work positions are designed and linked together.

Enhancing talent development for the digital workplace

Having quickly gone through the changes that are needed to bring about the digital workplace, how difficult it is to define the new managerial talent that will be needed for that purpose! It is difficult because the skills, the mindset, the ethics and the passion that define them are an evolution from the ones that we usually associate with managerial and executive talent.

Before briefly discussing these talents and some strategies to develop them, a very important point needs to be made: the new organization will need more, and not less, managerial talent, as is sometime argued by the gurus of “social business” or the “digital organization”. As digital technologies push operations and decision-making towards real-time, complexity reaches new heights; and as technology transforms the competitive dynamics of most industries, more and more decisions are made at the edges of the organisation. As a result, it is safe to argue that a higher number of talented managers is needed to understand and act on the new business context. But not all organizations are ready to develop this new generation of managerial talent.

There have been discussions about this new managerial talent these past few years, often uncovering some paradoxes: the skills needed for execution might not suffice for successful innovation; the focus on results that defines great general management might be a hindrance for visionary leadership; the excellence at managing control systems might prevent IT or HR leaders from expanding their leadership scope; …

How, then, to fire-start the talent management evolution that will drive the digital transformation? We would like to suggest a strategy based on two principles: “Engage and Let go” & “Make Everyone a CIO”.

Why “Engage and let go”? Well, to be sure, the digital transformation should bring innovation much higher in the leadership agenda. It can be argued that the focus on innovation should be as important as the focus on efficiency that has been every organization’s overarching goal for the past century.

It is why, Learning and Development programs should aim at engaging managers to be the main drivers in the digital transformation, and making them responsible for developing the skills and abilities that are demanded by the particular digital context of their organization. Engaging first, to make managers responsible for their own and the organization’s evolution; letting go then, an even more important step for Learning and Development programs, that should carefully listen to and monitor to managers as they learn and evolve, in order to identify next practices and skills with which to craft their own programs.

Engage and let go, or Open Learning and Development with a beta mentality.

The need to “Make everyone a CIO” is probably more obvious as digital technologies continue their invasion of the organization’s operations. The not-so-obvious aspect is how to reach this goal. We propose a number of easy steps to get you started on this :

a) Focus basic and entre-level training activities on developing common ways of working (a “collaborative way”, as it were). The following topics could help to start a curriculum:
  • Using the technology (learning to collaborate through social technologies and with digital technologies);
  • Managing collaboration (learning to manage the collaboration of one’s team taking advantage of these technologies’ features);
  • Framing collaboration (real-time design of collaboration spaces, like virtual communities, circles of workspaces, as explained in “From Push to Pull” from John Hagel and John Seely Brown)

b) Develop a “slow learning” university that focuses on developing an awareness of the larger digital context of your organization for all managers. This university should include courses on topics such as:
  • Identifying and learning the main technological trends impacting one’s industry, in the context of the competitive dynamics in the new digital world: cloud, consumerisation, socialisation, automatisation, …
  • Understanding the impact of these digital technologies on one’s industry, at all levels, both internally and externally;
  • Understanding the competitive dynamics of the software industry and how it impacts current and future development of applications within one’s industry;
  • Understanding new governance and decision-making practices that take advantage of social technologies features;

c) Finally, develop a pipeline for development opportunities that focuses on IT projects (developing a social website, upgrading IT infrastructure, building a mobile application, …), and in which IT managers and business managers collaborate to learn from each other.

This is just a beginning, but it should help you start moving your best talent in the right direction.

I would like to conclude on these thoughts on managing the digital corporation with a last idea on management dashboards. Social technologies have just begun their integration with other digital technologies, both new applications and legacy systems. This trend should continue in the years to come, if you follow the strategic moves of such giants as Microsoft or SAP.
There’s a fair chance that these players are looking at their own breed of social technologies as their Trojan Horse inside your IT operations. To be sure, social technologies will soon gain center stage in the Employee-experience of your organization and therefore become a key asset for development and retention purposes.

Corporations moving towards mastery of their digital strategy should think of social technologies as the opportunity to build a collective dashboard for their digital enterprise, a dashboard not for command and control purposes but for collective decision-making. You could imagine a fractal dashboard in which every employee would have access to all the data, assets, knowledge, applications and people of the corporation depending on his context.

And there’s no science-fiction here: Isn’t Google already building such a personal dashboard in the consumer space?

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