Overheard:
“I want people to be more accountable for their work.”
“I need my employees to work harder and be more committed.”
“Our people must be able to understand how we all work together to create value for our clients.”
“We need our teams to adopt and drive innovations through the business.”
“Why can’t get the big picture of our business?”
While we hear the above utterances often, the reality is that only 3% of companies have completed true digital transformation programs and some 54% of companies have no programs in place to build the skills of the future.
We have found two reasons:
1) The time horizons people are paid to think in focus on short-term gains, not the transformational longer-term gains that can be achieved by applying digital technologies. Combine that with the siloed organizational structures that keep people far away from the customer, and it becomes clear that the ways of work are not helping. Employees are not positioned to think like owners.
2) The way we think about technology is often quite simplistic. Many people still think of technology as a mobile app, a silicon chip or a magic black box. Technology has a long history of being abdicated to the IT division or the techies, when in fact it has become a critical business skill. Every professional has to build Tech Fluency.
This article unpacks the thinking horizons and ways of work that directly impact people’s ability to take more accountability and see the bigger picture. While this article unpacks the second point.
The ability to ponder about the future is a defining characteristic of being a human being. “What best distinguishes our species, is an ability that scientists are just beginning to appreciate: We contemplate the future. A more apt name for our species would be Homo Prospectus, because we thrive by considering our prospects. The power of prospection is what makes us wise.” – Seligman wrote in a New York Times an Op-Ed with John Tierney.
Except, we don’t use that talent enough. In the aggressive push for day-to-day operational efficiency, we have designed our organizations to focus on the next step, the next transaction and the one after that, in order to meet operational targets. Many professionals think in hourly or daily increments. Performance and ability are rated per project or annual performance appraisals, at which point the numbers must balance, in order to maximise annual bonuses. This is not the thinking the horizon of owners.
If the world was going to continue in predictably the same manner as history suggests, then all could be well. But in today’s world, companies must be able to explore new business models, while extracting the remaining value of their existing models. To build something big, as any entrepreneur and business owner knows, is not a one-year feat. At best it’s a 3-to-5-year play, but more likely to be 5-to-10-year play. Now and again, we see Group CEO’s incentives be in accordance with timelines, but it takes way more than one person to reinvent a business for long term value accretion.
Digital transformation is the ultimate Marshmallow Experiment. In 1960, Stanford professor Mischel assessed hundreds of children of about 4 to 5 years of age for what is now considered to be one of the most important characteristics for success – the ability to delay gratification. The kids were given the simple choice: eat the one marshmallow in front of you now, or if you can wait, you will get two later. Despite the clear benefit of delaying the benefit, most children chose the short-term gain. The kids that could imagine and cling to the benefits of the future, ended up, later on in their lives, having achieving greater success across a range of life measures.
Do your teams focus on the marshmallow of today, or the exponential number of marshmallows tomorrow that owners seek?
The other spanner in the works, is how siloed structures, undermine people’s ability to connect the dots between their daily decisions and actions with the P&L of the company. There was a time when the siloed structures made sense. The world of before, taught us to split complex problems into manageable bits and have separate departments and specialized functions working on their own. Digital transformation demands the opposite – for solutions cut across IT, marketing, finance, sales etc. Instead of hierarchies where the CEO is ‘boss’, people need to be thinking along value chains that lead to the real ‘boss’, the customer. It requires people who are willing to deeply understand the inputs they get to do their work from the various stages in the value chain before them, how they come to be and how they manifest in value for the client. People who act like owners.
The separation of cause and effect has a debilitating impact on the human mind, as parents and teachers who have observed the rise of children who grew up with minimal consequences, can attest. The lines between optimal performance and weak performance become blurred; learning doesn’t happen without a feedback loop; poor decision-making is repeated and gets worse over time and undesirable behaviours and values are normalized. People working as cogs in a machine become unable or unwilling to link cause and effect since that becomes someone’s problem.
In a startup, the separation of cause and effects means the company won’t deliver enough value, and it dies almost instantly or when funding dries up. There are several ‘come to Jesus’ moments on the entrepreneurial journey telling you that have not delivered value to the client. In a large corporate, historical profits, comfortable profit margins and monopolistic positions can keep the boat sailing for a long time, before the impact of the disconnect is felt.
Turning employees into owners requires a shift in culture. New company branding, renovating offices, providing free food or announcing a new strategy won’t change a culture. The only things that truly change culture are changing:
- How you work
- How you make decisions
- How you reward performance
FFWD Sprints enable you constitute teams in different ways – cross-functional, collaborative teams that disregard hierarchy to solve the challenge at hand. People are forced to consider the end-to-end value chain to get things done, like owners. Decisions in a sprint are not made by the HIPPO (the highest paid person’s opinion), but rather informed by data obtained from customer engagements and market feedback. That distributes accountability and empowers those on the front line to make decisions, like owners. Instead of tying performance incentives to arbitrary financial year ends, incentives should be linked to milestones or stage gates, achieved through validating, launching and scaling new initiatives. Teams should benefit more, when the client has benefited, like owners.
