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Is Your Organization Building Innovation Into Its DNA?

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Business
Is Your Organization Building Innovation Into Its DNA?

The following blog is a republish of an article appearing in Forbes written by Maureen Metcalf. It is a companion to an interview conducted with Tony Saldanha, author of Why Digital Transformations Fail, Innovating Leadership, Co-creating Our Future on Tuesday, August 20th titled Why Digital Transformations Fail.

Change is accelerating on all fronts across all industries. Each organization will be faced with different types of change and at different rates. The commonality is that everyone is facing opportunities and strains because of the current business ecosystem. Companies are regularly facing a broad range of risks, such as cybersecurity attacks, where the question has changed from “Will we be hacked?” to “When will we be hacked?” On the positive side, robotic processes automation, machine learning/artificial intelligence and a wide range of applications are making the tight labor market more productive.

With rapid change as the backdrop for the foreseeable future, it has now become imperative for leaders to build innovation into their personal leadership “operating system” as well as into the DNA of their organizations. Innovation is imperative for long-term survival and success.

While many people associate innovation with special people who come up with creative ideas, it is more accurately nurtured by building a company that embraces innovation as part of its core DNA. The real question is what does that look like, and how do you make it happen?

  1. Leaders’ beliefs set the tone for the organization, whether these beliefs are conscious or just habitual. They need to ensure they value innovation. To act with integrity, our thoughts and deeds need to be aligned. As a leader, this starts with evaluating what you prioritize. Do you value both delivering on current commitments and concurrently innovating to take advantage of new opportunities and approaches? Do you have a growth mindset? Do you value curiosity and appropriately paced change over stability?

Many leaders don’t take the time to look within and evaluate their values. When we are busy, we often run on autopilot. Now, it is time to schedule time to reexamine your views and see if the thoughts and beliefs that made you successful will support your future success.

  1. Leaders’ actions set an example for all employees to follow. As a leader, are you creating a culture and systems that support successful innovation as a way of doing business, or is it a one-off activity during times of challenge? Leaders who create an ecosystem where innovation is part of the organization’s DNA model behaviors such as participating in innovation projects with their time and budgets. They talk about the importance of innovation as a core competency of the organization, just like they talk about delivering products and services on time and making a profit. Leaders must be engaged in innovation! Lip service and delegating innovation to special people or an innovation department is no longer sufficient. Having worked in quality improvement programs for several years, I have learned that everyone can have innovative ideas. The value is only realized when the leaders and the organization align around supporting innovation as a key to business success.

 

  1. The culture must promote and support innovation as everyone’s responsibility. If we think of culture as our agreements within the organization, we can make deliberate agreements that explicitly indicate that innovation is key to our strategic success. It is a key part of everyone’s jobs. Additionally, the organization needs to define the specific qualities of an innovative culture that match your industry. For some companies, this can include ideas such as:
  • We continually test new ideas and learn quickly from these experiments.
  • Everyone is expected to contribute to innovation.
  • We share ideas transparently and openly and collaborate to enhance innovative approaches.
  1. Goals, systems and processes should all promote innovation as a key strategic objective and value. As mentioned, to truly build an innovative organization, it needs to be part of everyone’s jobs. People need to have time to invest. This can be a charge code for organizations that track chargeable hours; it can be a set time of the week, like Friday mornings; or it can be a periodic hackathon. The main point is it needs to be integrated into part of the job responsibilities. It needs to be measured and rewarded. Lack of attention to innovation must also be acknowledged. We understand that some people are more creative than others. That said, innovation also includes a very disciplined process of thinking and evaluation. I worked as part of an innovation team to design new stud welders. As a management consultant, my contribution was evaluating the business impact of the changes. I also got to use the welding tools, but my main role was not designing new circuits; it was contributing my expertise to the projects.

Organizations need to innovate. Some large organizations have budgets and staffing to dedicate to this. Others need to find ways to build innovation into their DNA and still meet ongoing business requirements. Being part of the DNA means addressing leader values and behaviors, culture and systems and processes and ensuring they are all aligned around the company’s key strategic differentiators and values, including innovation.

Without taking a systematic approach, innovation will be sporadic and the probability of remaining healthy long-term declines. These elements are interconnected. What can you do to make a small change in each area that will move you toward building an innovative DNA into your organization?

To become a more innovative leader, you can begin by taking our free leadership assessments and then enrolling in our online leadership development program.

Check out this and past episodes of Innovating Leadership, Co-creating Our Future, via iTunes, Google Play, TuneIn, Stitcher, Spotify and iHeartRADIO. Stay up-to-date on new shows airing by following the ILI LinkedIn.

About the author

Ms. Metcalf – Founder, CEO, and Board Chair of the Innovative Leadership Institute (formerly Metcalf & Associates) is a highly sought-after expert in anticipating and leveraging future business trends to transform organizations.

 

 

 

 

How Leaders Can Prepare Themselves For A Digital Transformation

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Business
How Leaders Can Prepare Themselves For A Digital Transformation

The following blog is a republish of an article appearing in Forbes written by Maureen Metcalf. It is the companion to an interview conducted with Mark Kvamme, co-founder and Partner at Drive Capital on Innovating Leadership, Co-creating Our Future on Tuesday, August 6th titled Business Disruptions: Are You Disrupting or Being Disrupted?

Many leaders have likely been hearing about the “rate of change” in a variety of ways. The World Economic Forum, for instance, published its 2018 report on global risks and trends to analyze where the world could be heading. This past year, the Harvard Business Review also published a piece about the importance of digital transformation. Both suggest that the rate of change is accelerating, and we need to be aware of the changes so we can take action. I’ve seen many companies adopt new technologies to automate tasks. For many, this is no longer a change of the future; it is happening now.

To be prepared for a transformation, I believe leaders must update their mindsets and behaviors. Below are my suggestions for getting started:

  1. Focus on what’s best for your organization.

As change accelerates, focus on getting the best outcome for your organization above being right. When facing challenges you have not previously mastered (and, in some cases, have never faced), evaluate, gather data and input from others, and plot a course of action you can experiment with. You likely won’t have the perfect plan, but this way, you can have a rough direction of where to move, which can, in turn, help you correct your course when necessary.

  1. Be prepared to make tough decisions.

Sometimes, leaders have to make tough calls to ensure the organization thrives. Implementing innovative tools can help keep your company competitive, but they will also impact your workforce. This is why it is critical that leaders balance the organization’s values with mission and profit.

Ask yourself the following questions if you’re feeling stuck when facing tough decisions:

  • Is my decision aligned with my values?
  • Am I willing and able to take the action required by this decision?
  • Does this decision align with our cultural values?
  • What system and process changes will be required to implement this decision?

I often see that leaders put forward proposals that meet one or more of these criteria, but when they look holistically at the implications of that proposal, they see flaws in the plan. An example was a restaurant I worked with that proposed limiting the amount of food employees consumed during a break. When examined further, this policy change made eating too much became grounds for termination. Managers were unwilling to terminate employees for eating too much during a shift because it conflicted with their values as a company.

  1. Think critically.

Complex thinking is also an important skill. As a leader, it’s critical that you understand any extended systems in your organization and how your decisions will ripple through the entire system. But I’ve observed that sometimes, this information is limited, which requires you to make quick decisions while thinking critically.

When this happens, determine the smallest decision you can make, given the information you have. What are the first, second and third level impacts this decision will have? By shifting the decision process to small decisions during times of uncertainty, a leader can break the inertia caused by uncertainty and gather important information from the small action. This approach reduces the risk of making incorrect large decisions.

  1. Stay curious.

From my perspective, leaders are now impacted by tangential forces; they need to be intellectually curious to ensure they are sufficiently informed to make strong decisions. Leaders must be open to the fact that they don’t always know everything. Ask yourself:

  1. What do I need to do to stay informed as a leader?
  2. What do I need to do to get more comfortable within myself being a continual learner?

Once you ask yourself these questions, remember to be open as you’re learning. Seek input from others and consume different forms of media to keep learning.

  1. Develop yourself and others.

As business ecosystems change, new tools and technologies emerge, and the competitive landscape can morph as well. This is why developing yourself and others is key. What are you doing to build your own skills and abilities, based on your current and emerging landscape? How are you developing your team? Building on the recommendation to stay curious, leaders should stay informed in order to continue their development, such as through reading publications outside your foundational content toward tangentially or loosely connected publications.

  1. Inspire others.

During times of uncertainty and change, I’ve found having the ability to inspire others is extremely valuable. In my experience, people often look to leaders they trust during times of change to ensure their safety and security. It is important for you to be keenly aware and sensitive to this need. Assess how well you relate to your team, and try to understand their goals and stressors. To build this strong rapport, communicate openly and honestly with your team and follow through on your commitments. I believe being trustworthy is now more important than ever.

  1. Learn from other perspectives.

When facing new situations and opportunities, it is critical to gather input from a diverse group of people. Encourage others to share candid input, which you can then utilize to craft solutions that accomplish the collective objectives of your organization and align with the company’s mission and values. Four important questions to ask yourself include:

  1. Have I included all critical perspectives to work through this issue?
  2. Have I created an environment where people feel encouraged to give open and honest input?
  3. Do people feel valued for their differing points of view?
  4. Do they see how their involvement created a more robust solution?

Leaders must ask for input, act on it, give feedback and recognize contributors in order for their team members and employees to feel confident in voicing their opinions.

While there is no magic solution to the challenges leaders face, I believe we are also at a point in time where leaders can make a huge impact on the world. From my perspective, your impact is possible when you are willing to develop yourself and learn how to navigate the personal discomfort of changing yourself and your organization to better navigate new opportunities.

To become a more innovative leader, you can begin by taking our free leadership assessments and then enrolling in our online leadership development program.

Check out this and past episodes of Innovating Leadership, Co-creating Our Future, via iTunes, Google Play, TuneIn, Stitcher, Spotify and iHeartRADIO. Stay up-to-date on new shows airing by following the ILI LinkedIn.

About the author

Ms. Metcalf – Founder, CEO, and Board Chair of the Innovative Leadership Institute (formerly Metcalf & Associates) is a highly sought-after expert in anticipating and leveraging future business trends to transform organizations.

Photo by Pixabay

Managing Organizational Headwinds in Digital Transformation

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Business
Managing Organizational Headwinds in Digital Transformation

This blog is provided by Tony Saldanha, extracted and exclusively adapted from his book “Why Digital Transformations Fail,” as a companion to his interview on Innovating Leadership, Co-creating Our Future with Maureen Metcalf. This interview aired on 8/20/19.

Organizational change management is treated as an afterthought for digital transformation as opposed to being proactively planned for. That’s troubling because based on my research, more digital transformations fail due to organizational change related reasons than technology. Most reliable process systems, such as say aircraft flights, plan for headwinds. Digital transformation can learn from them. Unfortunately, organizational headwinds are often dismissed in simplistic terms like change resistance or the frozen middle. That’s a mistake when planning for success in digital transformation.

The Science of Immune System Management

A corporate immune system is not necessarily a bad thing. Like its counterpart in the human body, it plays a vital role. In our bodies, the immune system protects us from disease and keeps us healthy. It is true that immune system disorders can be problematic (i.e., an immune system deficiency leaves the body susceptible to constant infections, while an overactive immune system will fight healthy tissues). However, on balance, a healthy immune system is desirable.

If that’s true, then why do so many change leaders blame the corporate immune system when things go south? Shouldn’t disciplined change leaders understand the strength of the immune system within their own organizations and prepare for appropriate handling?

At Procter & Gamble, when leading the industry disruption ecosystem, which included the biggest five IT companies and startups from the top ten venture capitalist firms, we took a different approach. For each of the twenty-five experiments (projects) that the ecosystem, called Next Generation Services (NGS) executed during my three years, there was always a proactive immune system conversation and plan. It made a huge difference versus historical trends on disruptive change acceptance.

There were three key truths that drove our approach:

–        The immune system is not necessarily a bad thing. Anticipate and prepare for immune system responses.

–        Immune system responses can originate at all levels in the organization, but the toughest ones occur at middle management.

–        The bigger the change, the harder the immune system response (i.e., digital transformation will be tough).

Having covered the first item, let’s zero in on the issue of middle management reaction. In most organizations, it is easy to get senior executive leadership excited about change. Similarly, the younger generation gets quickly on board. It is the middle management layer that’s on the critical path and has the potential to slow down or even block change. The term “frozen middle” has been associated with this phenomenon. This concept was published in a Harvard Business Review article in 2005 by Jonathan Bynes.[i] Bynes’s point was that the most important thing a CEO could do to boost company performance was to build the capabilities of middle management.

For corporate immune system disorders at the middle management level, the term “frozen middle” is accurate, but it comes with the risk of being pejorative for seeming to blame middle management for recalcitrance and inertia. In reality, the responsibility to bring middle management along on the journey resides with the change leaders and their sponsors. Consider this—the so-called frozen middle protects the enterprise from unnecessary distractions and change, just like the human immune system protects the body from harmful change. Middle managers are rewarded mostly for running stable operations. Is it fair to criticize them as a whole for doing what their reward system dictates? We must separate immune system disorders from normal immune system responses.

At NGS, we paid special attention to identifying, by name, the middle management leader for each affected project. We identified the middle management leaders affected by each project, involved them in the initial “fun” of designing the disruption, and jointly designed the risky roll-out of disruptive projects that could destabilize ongoing operations.

In the worst case, where despite the enrolling of the leadership the change resistance continued to be high, the project was quickly killed. That idea of selectively killing a few projects worked well because of the portfolio effect of having several other projects available in the pipeline.

Though the concept of a frozen middle is applicable broadly, overcoming it has never been as critical as it is with digital disruption. The amount of change necessitated by a systemic and sustainable digital transformation is massive. This isn’t just a technology or product or process change but also an organizational culture change. The middle management will need to lead the rest of the organization in learning new capabilities (i.e., digital) as well as new ways of working in the digital era, including encouraging agility, taking risk, and re-creating entire new business models and internal processes. Retraining middle management on digital possibilities is not sufficient. Entirely new reward systems and organizational processes will be called for.

Planning for headwinds during digital transformation isn’t just prudent, it’s a necessity given the high stakes of digital disruption. Emphasizing on “transformation”, more than on “digital” is a strategic imperative for success. For this, understanding and acting on the three truths of immune system management is critical i.e. it isn’t willful bad behavior but a rewards issue, it can happen at all levels in the organization but is toughest in the middle layers, and digital transformation by nature needs solving the toughest immune system challenges.

To become a more innovative leader, please consider our online leader development program. For additional tools, we recommend taking leadership assessments, using the Innovative Leadership Fieldbook and Innovative Leaders Guide to Transforming Organizations, and adding coaching to our online innovative leadership program. We also offer several workshops to help you build these skills and system to create a regenerative, inclusive and thriving organization that will have a positive impact in the world.

About the Author

Tony Saldanha is a globally recognized expert in Global Business Services (GBS) and Information Technology. He ran Procter & Gamble’s famed multi-billion dollar GBS and IT operations in every region across the world during a 27 year career there. Tony has over three decades of international business expertise in the US, Europe, and Asia. He was named on Computerworld’s Premier 100 IT Professionals list in 2013. Tony’s experiences include GBS design and operations, CIO positions, acquisitions and divestitures, outsourcing, disruptive innovation, and creation of new business models. Tony is currently President of Transformant, a consulting organization that advises top companies around the world in digital transformation and global business services. He is also a founder of two blockchain and AI companies, and an adviser to venture capital companies.

.[i] Jonathan L. S. Byrnes, “Middle Management Excellence,” jlbyrnes.com, December 5, 2005, http://jlbyrnes.com/uploads/Main/Middle Management Excellence HBSWK 12-05.pdf [accessed December 19, 2018].

 

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