Archive for the ‘Strategy’ Category

Speech to the Independent Colleges and Universities

February 10th

I was asked to speak about “Democratizing Transformation” at the National Association of Independent Colleges and Universities (NAICU) last week. I appeared in a general session and was introduced by a lifelong friend who has worked as a marketing strategy consultant for many institutions. He described himself as my Sherpa – there to help get me down from the mountain that I was about to climb.

NAICU

NAICU

Without a doubt one of the most interesting experiences of recent memory. The most interesting question from a college President “The things that you are discussing are viewed as “risky” on my campus. What do you recommend that we do?” Seeking to maintain a tone of respect – “if you find it valuable to come to a talk about transformation, haven’t you already seen risk in the status quo?”

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The Growth of Global eCommerce Projected to Double to $2 trillion

January 16th

FedEx recently published a study to highlight the growth of cross border shopping. The study, conducted by Forrester, interviewed 9,000 people in 17 country and small businesses with cross border operations.

Online buying now represents $1 trillion per year and it’s predicted to nearly double in the next 4 years. Clothing and apparel, books, electronics and cosmetics are the largest categories of purchases.

The growth varies around the world. But the picture is nonetheless a compelling one of a world that’s being transformed by new commercial flows.

Screen Shot 2015-02-16 at 8.11.43 PMThe study found that 82% of those interviewed made a purchase outside of their home country. This varied from 90% of Canadians to 59% of Japanese spend an average of $300 per year.  The major exporters today are the US, Great Britain and China.

With a projected doubling of global eCommerce, the dynamics of change will be interesting to watch.

As FedEx no doubt intended, the Forrester map of the world shows the possibilities for the small and medium companies who are online sellers today

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Strategic Inflection

October 7th

What makes this a conversation about fundamental transformation is the recognition that there is a need for change.

This may seem to be simple. But it’s deceptive. Transformation begins with the  of the need for change. Inevitably there are those with interests in the traditional way and they are likely to perceive change as loss.

When transformation has become an imperative, the trend lines that define the future of the business model demonstrate that the status quo will no longer be sufficient to ensure the future viability of the enterprise.

Andrew Grove, the former Chairman of Intel has devoted a significant amount of his career to studying this concept that he has called “strategic inflection.” “A strategic inflection point is the time in the life of a business when its fundamentals are about to change”, Grove has written. But at the same time, there are often simultaneous opportunities to invest in the future and in doing so to guarantee future viability in a competitive marketplace.

“Strategic inflection points do not always lead to disaster,” he wrote in his 1996 book “Only the Paranoid Survive” “They also create opportunities for those who are adept at operating in the new way.”

Grove wrote that he focuses on those fundamental variable that keep him up at night because he knows that if they were to change it would imperil the future. He wrote that he monitors these critical variables looking for 10x changes.

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The Mountains are High, The Emperor So Far Away

August 19th

The Emerging Dynamics of the Integrated Digital Enterprise

Triumvirate

A recent report on Being Digital (versus merely Looking Digital) from Accenture’s Institute for High Performance, presents a vision of the future of decision-making and organization that will challenge many traditional expectations about leadership.

With emerging technologies, we are poised on the edge of a second digital revolution. Market leaders have moved from experimenting with one-off digital applications to creating integrated digital enterprises. But while the new style of digital enterprise is going to be vastly more efficient and more effective in identifying and serving customers, the dynamics of the new enterprise are going to change the agenda for future leaders, at least the successful ones.

We are all being spoiled by the experience of being customers of Apple and Amazon. We expect service to be omnichannel, seamless and swift. Ubiquitous data streams are becoming routine and advanced analytics and modeling combined with rich data representations, the authors from Accenture anticipate, to create a new kind of enterprise.

One of the most striking differences to be seen in the emerging Integrated Digital Enterprise will be the way that the new technology can empower individuals by augmenting their natural human capacities.   The augmented cognitive, physical and collaborative worker of the future will be supported by mobile intelligence, 3D printing and robotics among other new capabilities. The future worker will operate in organizations where such crucial questions as “who” makes decisions, “where” decisions will be made and “how” work will be structured and located are going to change.

Critically, there will be an opportunity to move decisions to the edge of the enterprise, closer to the action.  The authors argue “Information and decision-making authority formerly the exclusive domain of a centralized authority will increasingly be pushed out toward the boundaries of the firm.”

In some sectors such defense, military planners who are now concerned with fighting in anti-insurgency conflicts, have been talking about decision-making at the edge for some time. And these ideas are important. In an information rich workplace there will be a growing need to grant greater autonomy to local decision-makers. They will demand it.

Of course, such devolution of authority flies in the face of centuries of tradition. Strategic decision-making from the time of the Ancient Greeks has made strategy the work of generals. Strategy has determined the deployment of resources against long-term competitive threats in war, in government and in business. A central concern of future leaders in a world where edge centric decision-making is possible will be how to reconcile the traditional top down and the new bottom up.

Even in the best of worlds where the leaders from the provinces cooperate in aligning their actions with the Emperor’s central authority, their independent, empowered decision making is not always going reach the conclusions that are the same as the ones that would be reached in the capital. The top down vision of the central leadership may be prescient. Yet the world often looks different closer to the action and pushback is going to become a common occurrence. There are going to be a growing number of instances reminiscent of the ancient Chinese proverb. When the Emperor is far away, you can often do what you think is best.

If adopting new technology were all that mattered, there might be little news to report here.   But in fact, in organizations that have moved decision-making to the edge, the local leaders are going to demand a role in shaping policy rather than merely implementing it; and where these democratic impulses are suppressed, the dynamics of the future enterprise will create problems.

No one should miss the fundament challenge that this shift is going to pose to traditional governance structures. Once the decisions are moved to the edge, there will be a need to recognize the democratic impulse and to respect it.

One of the principle challenges that this view of the future is going to represent comes from the fact that “Boards still don’t see the value of digital” writes Walter Frick of the Harvard Business Review Press. Boards will need to see the significance of the tipping point and the emerging integrated digital enterprise. Embracing the implications of the new dynamics of the democratic enterprise will challenge future leaders ar to think top down and bottom up simultaneously.

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Notes:

  • From Looking Digital to Being Digital: The Impact of Technology on the Future of Work Robert J. Thomas, Alex Kass and Ladan Davarzani, Accenture Institute for High Performance, April 2014
  • Strategic Principles for Competing in the Digital Age, Martin Hirt and Paul Willmott McKinsey Quarterly May 2014.
  • The Seven Habits Of Highly Effective Digital Enterprises. Tunde Olanrewaju, Kate Smaje, and Paul Willmott, McKinsey Quarterly, May 2014
  • The Digital Tipping Point, Results of the 2014 McKinsey Global Survey. McKinsey Quarterly.
  • Digital Transformation, Creating New Business Models Where Digital Meets Physical, IBM Institute for Business Value, Saul J. Berman and Ragna Bell, 2014
  • “Boards Still Don’t See the Value of Digital”, Walter Frick. HBR Blog Network citing the results of the McKinsey Global Survey, July 3, 2014.
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The Stakeholder Constituencies

April 23rd

 

Stakeholders

If the moral of the story here were to “adapt to new technology” it would still be a worthy discussion.  But there would be little news. Organizations throughout the economy have had to adapt to survive and many haven’t been successful. The Internet and the technologies that are associated with it have undermined the fundamental business models of many of the icons of the American economy. The impact of new technologies is a story that has been told many times.

But in fact, there is an even more important and interesting story that is unfolding in every sector of the economy. The implication of the new communications modes that have made global communication instant, ubiquitous and free have had brought implications for the way in which companies communicate with one another and within themselves. The classic model of communications for the firm is one that emphasizes the employees and management. Many of the key conversations that take place are therefore thought to take place within the box outlined above.

Even before there was Internet communication facilitating global connections, the boundaries of organizations were becoming less important and connections between the traditional organization and its customers, its shareholders (in the case of public at organizations this is taxpayers, and their representatives), suppliers and even host communities describe the multiple dimensions that describe the stakeholders in a representative manner.  The pressures that they supply are easiest to see and understand.

What has become important in the modern era has been that the economics of communications have made it so dramatically easier that there are new voices seeking to express their views and to defend their interests.  Even more importantly, there is growing recognition that the stakes really do matter.  Transparent enterprise and the abundant self-publishing sources of analysis have made it easier to see strategic issues as they appear on the horizon of the leadership.  The types of products, the location of tomorrows jobs, all of these issues and more are being contested in the new, increasingly competitive market.

If the Internet Age has brought a new era of challenge, the scope of the issues have moved far beyond adapting to the new technology and now include the Democratic Impulse that has awakened the stakeholders. √

Strategic Inflection

April 22nd

Andrew S. Grove, the former leader of Intel, wrote a book in the mid-nineties in which he sought to help leaders “exploit the crisis points that challenge every company.”  In 1996 when the book (Only the Paranoid Survive) was published, not even the head of Intel might’ve guessed the true scope of the revolution that was underway.

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In the short term, virtually every institution, both public and private, was forced to contend with the impact the creation of a global Communications system that was immediate, global, ubiquitous and virtually free. Harvard held two conferences, one in 1998 and one and 2000, and sought to involve the entire university in thinking about the Internet and Society.  There was wide recognition at the time that the Internet would have a dramatic impact on concerns that range from business to learning to global diplomacy.

The question was asked “Was this a revolution that was more like Gutenberg or Luther? the invention of the printing press or the Reformation?”  This may sound like Harvard. But the point should not be lost that there has been a recognition for some time that a revolution was taking place and that it would have wide implications for the economy, security, knowledge and much much more.  But whether the Internet would be a call to action for a given organization or not, it was the perfect illustration of the challenge for leadership in seeking to deal with pending change.

How was one to know that a downturn was actually a lead up to a strategic inflection point? Grove defined strategic inflection points as the place where a business or public institution recognizes that the fundamentals of the traditional business model were about to change. He described his own practice of looking for “10 next change” among the critical variables.

And he emphasized that change did not have to signal pending disaster.  For those who can become adept at anticipating strategic inflection and operating in a new way, these moments of transformational change can offer opportunities.

Sustaining the Gain

February 28th

PART V:

SUSTAINING THE GAIN 

Triumvirate

One of the most powerful insights of recent years has been the growing understanding that transformation is a continuous process. The dynamics that have eroded traditional business models are likely to work again to undermine future transformed models as well.

To anticipate the need for continuous transformation there will be a need to anticipate future cycles of change and, in the case of democratic processes, to track the way that the very concept of democratic management is changing. In coming times of change, there will be a challenge to the legitimacy of decisions and a need to find sources of shared value. For boards, there will be a need to create structures and processes that can reinforce the values of democratic enterprise.

The governance challenge should not be underestimated. Boards will be slow to come to recognize the need to share power that they have traditionally enjoyed. Yet without opening decision making, the legitimacy of any democratic process will be challenged.

➢ Is your governance process ready to sustain continuous and open transformation?

➢ Seeing the resistance to change should be a warning flag for the future as this demand for transformation may not be the last. Are you ready to create a continuous transformation that positions each cycle of the process for the next?

The Epilogue: Finding True North

For future leaders, the need to make decisions that require trust from constituencies that have not been active in strategic decisions will become increasingly important. To sustaining the legitimacy of decisions will require that future leaders find the means to become the authentic leaders of values-driven organizations so that leadership can increasingly foster an open, trusted dialogue among stakeholders.

 

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Managing Implementation Dynamically

February 21st

PART IV:

The Implementation Process

Triumvirate

In achieving results, implementation can be as important as the strategy itself. The classic concept of implementation has attracted so much management attention in recent years when information technology made it possible to create powerful performance management systems.

Yet implementing a transformation strategy with activist stakeholders will require a dynamic approach that can select the right tools to democratize decision-making and fit them to the situation. In an age of social media, “democratic” processes are abundant and are multiplying. To the traditional mechanisms of opinion research and town meetings, there are now the added features of social media and collaborative decision tools. These democratic tools will all be demanded by the stakeholders in future years. This is a vision of implementation that is much more bottom up. That there will be tensions between top-down implementation and bottom-up democratic enterprise will be inevitable.

In coming years, there will be a need to balance top-down performance management and metrics with the inherent sloppiness of grassroots democratic processes. Creating dynamic processes that can adjust strategies to changing contexts will be critical to success.

➢ Does your vision of transformation include mechanisms to implement strategy and manage for results?
➢ Will your management of performance stir resistance from the grass roots?
➢ Do you have dynamic processes and institutions in place to encourage flexible implementation?

Build a dynamic implementation process to balance the forces of top-down performance management and bottom-up democratic impulse. Empower the constituencies so that they are part of the solution, not a source of new problems.

NEXT: SUSTAINING THE GAIN

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Leading Transformation: Timing the Launch

February 7th

Triumvirate

LEADING TRANSFORMATION 

PART I:

TIMING THE LAUNCH

A common theme among would-be leaders of successful transformations is the need for crisis to spur action. And veterans of managing change initiatives will concede that indeed it is sometimes useful to have a larger compelling event to encourage acceptance of change. But what is even more important to successful transformation than having the stimulus of crisis-driven urgency is the need to understand context.

The need for transforming both public and private organizations often begins with recognizing that there is a decline coming, a place where the traditional growth path that has sustained the institution turns downward. But it’s too easy to assume that every case that requires transformation should be treated as if it were a crisis, or that every transformation requires immediate action. In some cases immediate action would come none too soon. In others there may be time to build capabilities, to develop new programs and introduce orderly change.

The problem with jumping the gun is that it creates confusion. Especially in an age of activist stakeholder constituencies, the perception of the timing of a coming downturn in finances and the prospects for the future will have a different meaning for different groups. You need to start by understanding where you are or stakeholder reactions will confound even the best-crafted plan of action.

You should ask a number of basic questions:

➢ Is there a turning point coming?

➢ Is change necessary?

➢ Do you know how much time you have?

➢ Do the key actors in a transformation understand and support the need for change?

In the end, the leader will still have to decide that the time to launch new initiatives has come; but now, in the age of activist stakeholders and transparent enterprise, you will have to build consensus and bring the crowd along.

NEXT: CENTERING TRANSFORMATION WITH INNOVATION

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Leading Transformation: Introduction

February 1st

DSCN3535

LEADING TRANSFORMATION

INTRODUCTION

There are five questions that inevitably must be faced by any leader who seeks to lead enterprise transformation. Difficult challenges involve the timing of the launch of the transformation initiatives, the role of innovation in defining the future vision, the best way to formulate successful strategy, the best way to manage implementation dynamically, and to how to institutionalize the process of sustaining the gains. No matter how the need to transform presents itself, these five core topics will be at the top of the list of the challenges that future leaders and their boards must face.

In the past two decades, and particularly in places like the Postal Service, newspapers and the telephone companies, technology has played a critical role in forcing the issue. But it’s important to recognize that critical moments of strategic inflection, when transformation becomes an imperative, are being driven by many different causes from technology to risk to financial crisis. Technology change that has created a global marketplace, transparent enterprise and collaborative work styles serves here as a valuable illustration of a broader dynamic. Transformation will not only mean adapting to technology change, it’s going to change the way that we have the conversation about the future, even who gets to participate and how.

If the moral of this story were just “adapt to new technology,” there would be little news here. Instead, the new dynamics of transformation will be shaped both by new forces for change and by the rising democratic impulse among the stakeholders who have recognized that their interests are at risk. Their voices will increasingly be heard in guiding future transformations and they play a central role here.

 NEXT: Timing the Launch

 

As I came to the end of the process of writing about the course on Leading Transformation that I taught at Georgetown’s McCourt School of Public Policy a friend who has been exceptionally successful in working with small and independent colleges and universities on transformational leadership asked me to tell him about the course.  The conversation led to this introduction and 5 brief sketches.  

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