Culture Shows Up Again as the Thing Driving Agility

Forbes Insights and the Scrum Alliance have got together to publish a recent report on Organisational Agility, drawn from interviews with over 1,000 C-suite executives from around the globe.

A key theme which runs through the whole report is how important Culture is to Organisational Agility. (Something which I emphasised in "The Way of DAU"). Additionally, there are some compelling findings about the benefits of organisational agility. Over 50% of respondents identified benefits in the areas of:

• Time to Market
• Speed of Innovation
• Employee Morale
• Ability to Attract Talent
• Competitiveness
• Financial Results
• Ability to Manage Across Geographies

To re-inforce these findings, the report focuses on the performance of leading Agile Organisations and Laggard Organisations. Whilst they represent similar proportions of the overall survey population (16% and 19% respectively), twice as many Leader Organisations enjoy annual growth of over 20% as Laggards do.

In all probability, the CxO community that the authors consulted, probably included a pool of organisation most interested in Agility, as an earlier report by McKinsey suggested that only 4% of organisations have completed an organisation wide Agile transformation.

The report looked at a number of things, including whether organisational agility was End-to-End or siloed in functions. Based on the opinions of the respondents, it appears that Operations and Technical Functions tend to be the most Agile (79% and 75% respectively), followed by the usual suspects in Sales and Marketing. Interestingly enough, Finance achieved a credible 64% vote of confidence, but HR was amongst the laggards with only 56% of respondents considering it an agile function. Considering that HR is often thought of as the "Guardian of Culture" this is a worrying gulf and should be a wake up call to HR to re-vitalise its mission.

One area that I would have liked more analysis on, was whether Leading Agile organisations already had positive innovative and collaborative cultures before they embraced Agile or had to focus on it as part of Agile Adoption.

Anyway, the take away is that all CxOs, irrespective of function, need to work on fostering the right culture.

Digital Experience (DX) And the Re-invention of Marketing

The Post War World of the '50s and '60s saw a massive explosion in marketing as companies tried to force feed Baby Boomers mass produced electro mechanical goods, encased in plastic. They did this by trying to create desire and brainwash people into needing their brands. This was the last hurrah for the Henry ford approach, "they can have any colour they like, so long as it is black" and the Taylorist School of management which focused on productivity and costs, whilst paying lip service to quality.

It took the massive economic melt down of the late seventies and early eighties for the Quality led management, pioneered largely by Japanese companies to gain acceptance in Europe and America, which at the same time was accompanied by the angst of Punk, as Generation X turned on mass consumerism and the break down of "A Job for Life". Customer Care, based on the concept of listening to and delighting customers, came to the forefront. New technologies like CADCAM and philosophies like Flexible Manufacturing made it possible to design, prototype and evolve products to meet customer needs and gradually Design Thinking came into being.

At the same time, the '80s saw the birth of the PC and take up of lower cost client server technology, which usurped proprietary mainframes whilst Rapid Application Development (the forerunner to Agile) sparked the first steps to evolving the Digital Ecosystem that we see today. This has pushed marketing evolution to the extent that the modern marketing function is digitally obsessed with Customer Behaviour Data, Customer Experience and Agile Marketing. So much so, that most digital conversations inevitable involve talking about Customer Experience and the Customer Journey.

So it was great to see Nimbus Ninety publish "The CX Manifesto" which sets out over 30 recommendations under the 5 headings of Personalisation, Experimentation, Trust, Data and Loyalty in its latest  quarterly publication of the Chief Disruptor magazine. This is well worth a read as it has been compiled by practitioners from London's vibrant digital scene over the first 6 months of 2018 and is based on sound experience.

Lessons on Innovation

Apparently Singapore has been ranked the 6th most innovative county in the world. Recently 8 innovation leaders in Singapore were asked to share their thoughts and secrets on what works.

One of the strong themes which came out was how much the culture, perceptions and mindset of business leaders affects the ability of a business to innovate.

They used a number of approaches to over come this, e.g. by trying to adopt a learning culture, by evisioning the "bank of the future" or focusing on key objectives and KPIs the business wants to achieve and working out strategies to "move the dial". One company tries to find a unifying principle by exploring key leaders aspirations, fears and "journey" to find something that they all agree to be the guiding principle for their strategy.

The other key theme which came across was how much they relied on experimentation, prototyping and piloting to help align people and test hypotheses, proving what works and learning from failures.

This is a great vindication of the approach set out in the Way of DAU or Digital as Usual,

Has Big Data Lost its Mojo?

A number of surveys were published during 2017 which suggested that Big Data has lost the CxO mind share that it had.

The overall impression gained was that business leaders are putting their emphasis on Artificial Intelligence (in particular Machine Learning) and IoT, whilst CIOs and Technical Leaders are worrying about Security and Lean (Agile and DevOps). 

At the same time the consumer and gadget end of things are focusing on wearables, voice and VR/AR based devices (implying other types of AI are getting important). 

Somewhere in the mix, people are worrying about culture, product management and marketing, and organisations designed around empowered product teams.

There almost appears to be an assumption that big data has been cracked and apps are easy. Also, data governance is not really getting the attention that it should do and vendors are pushing APIs for integration.

This suggests not just a gap between business vision and technical capability to deliver, but also that the consumer led boom in exploitation is going places which don't necessarily fit well with classical business environments. Open plan offices are not the place where people should all be talking to their digital assistants.

The lessons I draw from this are than business management teams need to start thinking holistically about what is needed to deliver their new business (i.e. digitally augmented) strategies and models, but also about what the future workplace looks like. Is the office finally dying?

They also need to get real about data. It needs to be managed using lean data principles. Integration and security are vital to get right. IoT and other exploitation approaches are going to emphasise Big Data's importance further. So it's vitally important to develop data specialists who understand your business and are networked with the right people. A recent article in the Harvard Business Review suggests that most organisations have focused on technicalities and need to look at a more immersive approach and organisational issues too.

IoT Adoption Drag

IoT Makes Slow Progress

Despite all the hype and general acceptance of its possibilities, IoT is making slow inroads into enterprises and can still be regarded as being in the early period of adoption in many businesses.

I have talked about CxO behaviour and culture in previous blogs as well as security and other issues, so what is holding IoT back?

Business Leader Perspective on IoT Adoption

A recent survey by the Economist Intelligence Unit (sponsored by IBM and ARM) involving over 800 executives around the world looked into the issue. This suggested that fewer than 10% had extensive IoT implementations, although many had dipped their toes in the water.

More positively, around 25% stated that IoT adoption was sparking innovation within their organisations with 22% indicating that IoT offered new opportunities, 20% saying it was changing business models and 16% believing that it was enabling entry into new markets and initiatives. So the overall picture is quite positive about its transformational potential.

Only 15% believed that IoT would significantly reduce costs, suggesting that IoT adoption is more about re-imagining their businesses than old fashioned cost cutting.

Interestingly enough, few executives saw technical issues as blockers to adoption. The key constraints cited were the Size of Investment needed (29%), Security and Privacy concerns  (26%) and lack of CxO Knowledge and Commitment (23%). 

This points to a smoking gun around Cost and Executive Behaviour / Team Buy In.

IT Leader Perspectives

Interestingly enough the British Computer Society's (BCS's) survey on Digital Leadership shows some mismatches.

Over the last 4 years the principle concern of IT Leaders in the Digital Space has been Security (averaging 60% of responses, plus or minus 2% over this period). The second most important concern has been Cloud (at 50%). In the last 2 years, Governance has moved into third place at 35% followed by Agile and Big Data at around 25-30% each. IoT was only cited by respondents as a major interest by 18%. Although Cloud, Agile and to some extent Big Data are involved in IoT adoption.

This suggests 2 things. Business Executives are over confident about implementation issues and that IT Leaders have a mismatch in alignment and understanding with business aspirations.

IoT Success Factors

So it appears that CxOs need to get together and agree a common vision and set of priorities. IT Leaders need to build IoT into their plans and there is a need for education and collaboration to get a coherent approach in place.

Are You as a CxO The Real Culprit?

Digital Impacts on Business

In a recent article in the Sloan Management Review, it was mentioned that 87% of executives think that Digital will affect their market place. Yet out of the 75% who thought that their enterprises are adequately prepared, only around 10% saw it as a potential threat to their business.

This is only one symptom of the many aspects of CxO behaviour which are affecting the success of organisations which want to adopt a digital business model. Overall, there is often a lack of realisation that the CxOs themselves are inadvertently sabotaging their organisations' efforts.

Executive Behaviour Can be a Problem

In many cases, in the same manner that many executives don't understand what it means to be a project sponsor, CxOs have failed to actually engage with the issue. They don't seem to think that they should spend the time to get involved in deep market analysis and identify real game changing opportunities. They just want to automate yesterday with some sexier technology.

Additionally, they don't get the need for acting as a joined up team or building a positive culture which supports experimentation and innovation. In fact, many executive teams don't seem to understand that innovation means doing something that no one else has done before, so there are bound to be a few issues along the way as a product team discovers what works and what does not.

David Snowdon provided a great framework with the Cynefin model to explain what is involved with emerging practice and chaotic conditions.

This is why the DAF (Digital Adoption Framework) places significant emphasis on cultural change as promoted in The Way of DAU. Culture is a known inhibitor to strategy implementation, as witnessed by the well known quote that Culture Eats Strategy for Breakfast. Culture change starts with the C-Suite and ripples down. So any CxO looking for digital success, should be asking whether he or she needs to reach out work with C-suite peers to build a better team. Otherwise, failure beckons.

Executives Need To Learn How to Promote Innovation

On another tack however, a research based article on innovation and executive behaviour published in the Harvard Business Review, outlines some personal behaviour characteristics of entrepreneurial CEOs and other top executives: 

• associating, 
• questioning, 
• observing, 
• experimenting, 
• networking.

Their observation was that CEOs in successfully innovative companies take more ownership of innovation, look outwards and provide leadership to the innovation process and get personally involved.