There’s an old saying is that if you want it to work, it must start at the top. Never has this bit of wisdom been more appropriate!
If we say EXTRACT is about strategy, one can easily fall into the trap to say, ah, strategy; we know how to do that. The harsh reality is that even if your organisation is good at defining strategy, the rules have changed, and if you approach it the way you always did, you will most probably miss the mark.
All organisations have a strategy, whether implicit or explicit, whether fixed or fluid, whether dell defined or vague – some form of strategy exists. It’s the job of those at the top of the organisation to define this strategy.
If your organisation has a well-defined strategy, digital transformation will have a marked impact on that strategy, and if you don’t, defining a digital transformation strategy will give your organisation a well-defined strategy. In some ways, it may be easier if you don’t have a well-defined strategy to work through the steps outlined in EXTRACT because all of this will be new to you and you don’t have to unlearn methods and habits that don’t work anymore.
One of the most significant issues and most difficult things to get right with digital transformation is to get the organisational leadership to understand that everything that needs to happen starts in their domain – EVERYTHING!
The leadership have to define the strategic direction for the organisation operating in the digital age. That’s hard because if you are an incumbent organisation, the leadership of the organisation first have to learn that a bunch of things that you previously considered to be hard and fast strategic principles, may no longer be accurate, valid or even true!
We sometimes tongue-in-cheek say that your 10-year-old MBA would prove as much as a help as a hindrance when defining a digital or digital transformation strategy!
Successful transformation leadership starts with being open to learning new things and being willing to apply the new things learnt. It also means that the leadership in the organisation would need to become much more involved in continual strategic activities.
We would generally consider it a bad idea for an organisation to have two strategies, BUT…
We have however learned is that one way to get transformational projects to work and show results is to define a digital transformation strategy that will, for a year or two, run in parallel with the organisational strategy. Call it an interim measure until the organisation has gained enough digital experience to merge the two into one.
PLEASE NOTE:- it works well in some cases and others its a disaster to have this TWO STRATEGY approach.
Your natural tendency would be to say lest start with two and see if it works – our advice is JUST THE OPPOSITE! Start with one and if it really does not work, revert to two! Of the two, this is the much more effective and prudent approach. At a minimum, by following our advice, you will know exactly what the stumbling-blocks to are to have a single strategy!
Remember if you have two strategies, there will always be the problem of conflicting objectives and goals, and this is where organisational leadership has got their work cut out for them. Two strategies – regardless of whether you may think that it will be easier – is NOT. It’s much, MUCH HARDER – even to the point that it may be the reason your organisation decides not to transform at all!
OK, thats that for the strategy issue for now.
We keep on using the word leadership, but what do we mean by that?
We see leadership as the group of people in the organisation who drives the strategic direction and provides oversight to ensure that direction given is acted upon.
Leadership is a strategic role and not a tactical and operational role.
Organisational leadership are not only responsible for giving strategic direction but also have to ensure that the strategic direction is acted upon. The rest of the organisation can only act if they are empowered and able to act – part of the role of leaders is to ensure the availability of the necessary resources so that the organisation can achieve their strategic objectives.
The leadership of the organisation is also the governing body of the organisation.
To be successful in the digital age, the role of organisational leadership needs to make some shifts in thinking (and acting).
Two major shifts in behaviour need to be considered for future success. Some leaders have already made this mind-shift, many however have not.
The first fundamental shift is that organisational leadership needs to ensure an environment is created in which the organisation and its people can thrive rather than just survive. This environment must offer a high level of autonomy and be as unfettered by constraints as possible.
Note that we did not say without constraints but with limited constraints, implying that the organisation’s entire control regime needs to be re-evaluated and unnecessary stumbling-blocks need to be removed. Developing light compliance regimes needs to be accompanied by fostering an environment of trust, countered by commitment and accountability.
Defining organisational governance, structures and the systems it needs to operate should form part of defining the strategic direction of the organisation. Governance and governance systems and structures like strategy always remain subservient to the higher purpose for an organisation and the reason for its existence.
Executives in the past often played two distinct and sometimes even incompatible roles. Sometimes wearing a strategic ‘hat’ when dealing with board issues, and wearing a tactical/operational ‘hat’ when looking after the function they head up.
It is in this area that the most fundamental behavioural shift needs to occur in leadership behaviour and activities.
Organisational leadership should attempt to shift into an almost permanent strategic mode of thinking. The role of the board and executives are to focus on continual assessment of the organisations broader operating environment and continually ensure that the organisation’s (strategic) response reflects the organisation’s strategy vis-a-vis its position in the market.
When you first read this, it would sound like a stupid thing to do, as strategy is defined and then followed, and it is assumed that once set its OK to follow the strategy for some time before review and updates are required. Here’s the bad news – in the digital age, strategy becomes much more fluid and needs frequent evaluation and re-adjustment. Doing a yearly strategy session is a sure way of not being here in a year or two!
Shifting executive focus means that you also can move from short-term thinking to long-term thinking. Operational focus makes executives direct their attention and efforts towards the immediacy of today’s issues. You cannot “dream” a company’s future and define a meaningful vision and give strategic direction if you cannot see the woods from the trees.
The role of the board and executives is to focus on continual assessment of the organisations broader operating environment and to continually ensuring that the organisation’s (strategic) response reflects the organisation’s strategy vis-a-vis its position in the market.
The second shift in the role (and behaviour) of the leadership echelon will only be possible if the first is fully realised, for two reasons:
Unless governing structures are functional, and continually give active feedback to the organisation’s response of the strategic direction given, risk and organisational and financial performance, leaders will find it difficult to disengage from tactical and operational issues.
Unless people accountable for tactical and operational responses are empowered, enabled (given the authority to make decisions) to do their work and fulfil their role, with as little interference from the top (beyond the direction given and their wholehearted support and sometimes advice and guidance), the organisation will be unable to afford executives disengaging at these levels.
Empowering management to act means that organisational structures also needs to be transformed if organisational agility is to be achieved. Strategic direction must be just that – direction and not plans.
Doing detailed strategic planning in today’s fast-changing environment quite often strangles and stifles rather than allow for the liberation of ideas made reality at break-neck speed!
Stephen Covey said that “Leadership is a Right-Brain activity NOT a Left-Brain Activity.”
LOVE IT – THAT’S WHAT IT SHOULD BE!
Organisational strategy is not about building the future. It is about imagining and inventing the future, allowing our team to go out and build the future as the leadership sees it – and yes, we know this is a bitter pill to swallow – especially if the leadership are technically competent and used to doing the job themselves.
This by no means diminishes the role of leadership in the business, their involvement and the foundation they lay is more critical than ever. It does, however, change the role of leadership in the organisation. This is most probably the single most difficult transition to make!
Let’s explore this change, although difficult – it is liberating!
We will briefly define the role of organisational leadership, specifically within an ADapT context.
Non-executive directors tend not to engage in the day-to-day management of the organisation but are involved in policy making and planning. In addition, non-executive directors’ responsibilities include the monitoring of the executive directors and acting in the interest of the company’s stakeholders.
Non-executive directors are not directly involved in the running of the company; they are a bit more distant from operations and interactions with customers and other stakeholders. This detachment places them in a position to question and test strategic direction, to ensure it is feasible, and in the interest of stakeholders, rather than dictating to executive directors on matters of strategy and policy.
We propose that the role of non-executive directors also significantly change and that they spend much more time with customers and staff members in the organisation. Let’s give a term coined by Tom Peters a new name – we need to do Directing by Walking Around (as opposed to management by walking around – or as Toyota terms it doing Gemba-walks).