In a recent episode of his Digital Transformation People podcast Rob Llewellyn spoke to Professor Wendy Smith, Co-Founder of the Lerner Women’s Leadership Initiative about transformation paradoxes.
Wendy clearly knows a lot about transformation and the interview proved beyond doubt the complexity of the transformation challenge. It was obvious that to do justice to many of the questions Rob posed would take numerous dedicated podcasts, she did an admirable job of outlining a load of interesting issues.
When solutions bring their own transformation paradoxes
Throughout, though, there was a recurring theme. That of the new and different spectres we awaken as we search for the level of efficiency every business needs to transform or even operate day-to-day in the digital economy. In simple terms, much of the remedies we apply to our ailing business models introduce enough new transformation paradoxes to keep Ronald Heifetz’s “Adaptive Leaders” busy for the rest of their days.
When human traits collide
Human nature exhibits many contradictions, not the least of which is the conflict between our need to cooperate and our competitive instinct.
Mankind has been as successful as we have, due in no small part to our ability to work together. We realised very early on that by working in groups we could hunt more successfully and better defend ourselves against predators – two fundamentals of modern business that I acknowledge in my Brand-Led Business Transformation philosophy.
Maslow told us security is the most basic human need and the tribalism that facilitates this is part of our DNA. It is also manifested in many aspects of modern life. For example, our need to belong is the basis of the psychology of brands. The logos of our favourite brands are our badges of belonging. We wear them with pride to represent our allegiance to values and beliefs upon which the brand community is founded. Being a member both makes us feel secure and helps us express our individualism – another of those transformation paradoxes worthy of an article.
Brands are a bigger than most people think
Brands aren’t just an object of the relationships between organisations and end-users. A brand community is far wider than this, embracing disparate special interest groups such as investors, suppliers, distributors and employees too.
Each of these segments has its own objectives and needs that, to be successful, any organisation has to unify. And therein lies one of our transformation paradoxes, because the competitiveness within us and our need to cooperate are equally potent opposing forces. In fact competitiveness is often celebrated more than cooperativeness in today’s society and this raises one of the greatest challenges modern business faces. How do you get instinctively competitive factions to cooperate?
Consider football teams (or soccer teams to our American friends). Every football manager knows that working as a team creates synergy and gets results. A team of individual stars all looking to be the hero of the match rarely succeed. By the same principle we all know a frugal team with mediocre players that work well together can achieve results that bigger, more glossy teams envy. The key is the manager, just as in business it’s the marketer who makes the difference.
When business transformation means “survival of the fittest”.
It’s long been recognised that large, bureaucratic organisations don’t work in today’s fast-paced marketplace. They are unwieldy, cumbersome and inefficient. The antithesis in fact of what it takes to succeed in the digital economy. This was amply demonstrated by Percy Barnevik when he brought the Swiss/Swedish corporate ABB from the brink of collapse. Barnevik took a bath, as the accountants call it, and divided the monolith into numerous small business units.
In the case of ABB, Barnevik is said to have set a limit of fifty personnel in any unit. Once a unit grew to that number it was sub-divided. This strategy effectively saved the business by making the organisation more agile and responsive to changing market demands. Among other things, this shortened product development time from three years to three months. In an era when any business is only as good as its NEXT big idea this is essential, but remember the ABB transformation took place in the eighties and nineties, when the pace of development was sedate by today’s standards.
Dichotomies emerge when brands lack unity
When you create autonomous groups like this though you introduce a new issue – the risk that inter-group competition will neutralise the benefits. To overcome this you need a unifying element – something that turns-around the personal concerns of individuals or the objectives of groups and business units and plays it back at them.
This isn’t so much a case of “the greater good” because this suggests compromise on the part of the individual or group and that’s not what we are looking for here. Basically it’s about convincing individuals that the success of the community is intrinsic to their own and affecting a behavioural switch from self-seekingness to concern for the community.
This is EXACTLY what brand building is all about – creating a community that thrives by the mutual support of its members.
Greg Satell reveals in his book Cascades how the momentous political, social and commercial transformations of recent decades have been brought about, only when disparate special interest groups have been unified behind a single, clearly defined objective. This is the principle of Brand-Led Business Transformation.
Brand Modelling brings short term wins too
I recently found myself explaining this, for what must be the ten thousandth time, and in the process worked up a diagram that illustrates the way the Brand Modelling process plays-out for the individuals involved, the brand community and in terms of commercial benefit for the business concerned – The latter being really useful if you are trying to convince risk-averse business leaders to invest in brand development. I’m happy to share that diagram with you here. (click the image to download)
Another point that Wendy raises with reference to this is the concerns business leaders have for the continuance of their existing business, at least while the new alternative is being road-tested. This is an interesting challenge that has been approached in many ways by different people.
Creating a parallel universe
One of these was Tony Mooney who I worked with at Clarity Blue (Later to become part of Experian) who subsequently became head of Sky IQ, Sky TV being a client of ours at the time. He and I debated many times the principle of the “parallel universe”.
This approach to transformation left the existing business ticking over while building a second model along-side. For the legacy side, business remained pretty well as normal while new opportunities, processes and propositions were dealt with by a second team applying new technological solutions with a new structure and processes.
The idea was that once a solution was shown to work – these days we might refer to this as MVP (Minimum Viable Product) – it was transplanted to the transactional side of the business and woven into the fabric of the operating model. It’s a model for innovation adopted by consulting firms and incubators around the world these days. The parallel universe theory is that eventually the entire business would be transformed this way and emerge, shiny and new.
It’s not dissimilar to how switched-on businesses have been operating for decades, although the pace of life, until recently, has been sedate enough for it not to have been quite this obvious. The scary thing though is that from now on every business has to re-invent itself on the run. There’s little room for a discrete function like this. The operating model has to incorporate a continuous process of transformation.
Focus on the way people think not the way they work
This is another area where the Brand-Led Business Transformation approach scores, because its various modules encourage everyone to focus on the objective represented by the brand promise rather than perpetuating a redundant process or model.
25 excuses for business transformation failure – just one cause
Numerous analyses by some of our most revered consulting firms have been remarkably consistent in attributing reasons to transformation failure. There are about twenty-five commonly-quotes “reasons”. However, if you dig below the obvious, it becomes clear that there really is a single root cause and that’s absence of focus. This causes disengaged leadership, reluctant managers, silos, underfunding, wastefulness, the appointment of the wrong project leader and a whole lot more. You don’t get any of this if you start your transformation by creating a brand model.
Brands are powerful. I believe they are the driver of any successful organisation and they are certainly the antidote to transformation paradoxes.
Phil Darby
January 14, 2020