Digital Transformation: The 4 Shifts of Corporate Culture

Corporate Digital Transformation is about Entrepreneurship. What needs to change in Organisational Culture to make it happen ?

One of the things I love about working at NUMA is that we don’t need to scout for clients and partners. Every week I meet between five to ten Managers and Directors from private and Public Companies that are looking for ways to bring Digital Transformation and Innovation to their companies.

The key question is often the same: How might we innovate like a startup ?Some are looking to innovate with startups but they are aware that without changing their Organisation Culture they won’t have fruitful collaborations.

At NUMA we believe that Digital Transformation is more a matter of Entrepreneurship than Technology. It is even more a Cultural transformation.

Loosely defined Culture is the conundrum of habits that define a living society. It sets apart what we judge acceptable, nice and expectable from what we judge ugly, misplaced or unattended. This set of habits is mostly implicit: You don’t need to be an expert to behave according to the culture of your country: some habits are learnt but most are “absorbed” through living with others.

Culture (and law) is what synchronises behaviours in a group so that each member act coherently to reach a common goal. The same happen in Organisations: a complex living organisms where Corporate Culture implicitly dictates what’s possible and what is not.

For most Organisations, putting Innovation at their core requires a Cultural Change.
As living organisms, humans are naturally adverse to change.

The problem with change is that by definition living organisms are adverse to change: their most fundamental goal is to establish equilibrium through successive mutations. No equilibrium means chaos, but no change means stagnation which is not only dangerous but impossible.

Change is painful: remember the “transformations” of growing as a teenager ? Change is perceived like an illness, something that put your equilibrium at risk and that you need to heal. That’s why it’s hard to change on purpose and that’s why tons of books have been written about changing your habits.

Unlike other living organism, the chance we have as humans is that we can purposefully seek for situations that force us to change.We can explore unknown lands and embrace serendipity.

We can go out of our comfort zone trying not to jump back in right away.

That’s exactly what entrepreneurs do: they put themselves at risk by experimenting solutions to unsolved problems in unknown territories.

Being Lean means putting yourself out of balance and forcing yourself to always make that next step.

To evolve, Organisations must regain their Entrepreneurship spirit and create the conditions that put them out of their comfort zone. After all, Evolution is the history of a dance between a changing Environment and organisms that transform to survive in the new environment.

There are two ways for an Organisation to change:

Change by changing the Environment

Changing your environment is a perfect way to push yourself beyond your limits.

Changing your environment is a perfect way to push yourself beyond your limits.

In a new environment you will feel uncomfortable and will need to acquire new skills and learn to use new resources.

Organisations have many ways for doing this: Enter a new market, work with startups, work with accelerators, embrace Open Innovation.

Change by supporting Internal Mutations

Internal mutations helps to introduce diversity

Internal mutations happen all the time. The question is wether you should prevent it or support it. Some mutations can look like rebellion but if you stop them all you need to accept the status quo.

Introduce diversity, Encourage entrepreneurship, question existing business models, break hierarchies, mix teams.

Changing the environment or supporting internal mutations are both more effective than Strategic Roadmaps because they induce long-term Cultural changes at the individual level instead of dictating new Rules that should govern the Organisation.

In order to make Change durable, Organisations need to shift at least four habits:

#1 Shift: From Politicians to Entrepreneurs

Experiments are the only way to move from a political mindset to an entrepreneurial one.

“We need this idea to be successful, it’s the only chance we have” is a phrase that you can hear from a team of corporate entrepreneurs.
If you want to create entrepreneurs, you need to give anyone the right to experiment and promote a scientific approach to testing business ideas.

As Brad Smith, Intuit CEO put its:

When you have only one test, you don’t have entrepreneurs, you have politicians, because you have to sell.
Out of a hundred good ideas, you’ve got to sell your idea. So you build up a society of politicians and salespeople. When you have five hundred tests you’re running, then everybody’s ideas can run.
And then you create entrepreneurs who run and learn and can retest and relearn as opposed to a society of politicians.

(Intuit CEO,Brad Smith quoted in “The Lean Startup”)

#2 Shift: From Departments to Teams

It takes a lot of effort to move stuff across silos.

“We need to sell this to the other department” is another sentence we often hear when working with corporate teams.

If your project is good it will involve marketing (new product) sales (new customers) IT (technology) and legal (new revenue model, customers data, IP). That’s why to be agile, teams must be cross disciplinary.

#3 Shift: From Inside to Outside

Without customers feedback opinions win over facts.

The idea that Innovation should be protected before a new product is launched on the market is the heritage of a time in which the way to measure a Company innovation was by counting the number of Patents it filled.

Today, everyone agrees that Customer Development is the key to developing products that people actually want.

The market is outside market reports and talking to people is the best way to understand it.

Giving teams autonomy to do Customer Research and letting them work in an Open environment where they can quickly connect with new skills they need to move forward is the best way to accelerate an Entrepreneurial Transformation.

#4 Shift: From measuring execution to measuring outcomes

Instead of drawing red lines why not drawing green lines and invite people to cross them ?

For entrepreneurs to thrive inside an organisation, the role of Managers must change. Instead of monitoring Execution (how closely an employee sticked to the plan) they should monitor Outcomes (what’s the impact of an employee’s work).

Setting “enabling constraints” that push employees beyond their limits should be the new goal of Managers.

Simply put: instead of drawing yellow lines why not drawing green lines ?

© Dilbert 2015
At NUMA we apply these rules to ourself

In 2013 when we were the best known Innovation space in Paris we decided to go out of our comfort zone, we changed our name and moved to a space that was 3 times bigger. We raised 100k$ in crowdfunding.

Two years later, In 2015, when Numa was doing very well as a non profit organisation we changed again: we decided to go international and transform our model with a Equity crowdfunding campaign that raised 1M$. Four months later we completed a 3.4M$ investment and opened in Moscow and Bangalore. We will be in 15 cities by 2019.

Today, we work with entrepreneurs from all kind of industries, we accelerated 85 startups, our Corporate Innovation activity had a growth of 300% between 2014 and 2015 and we worked on more than 60 Innovation projets with Public and Private Organisations. Each year we organise 1.400 Events that connect communities in all fields.

We believe that Entrepreneurs are Everywhere.
We believe that Taking Risks is called Doing things.
We believe that Now is The Right Moment.

The power of NUMA is it’s community.
If you want to share your experience on Digital transformation, Corporate Innovation and changing Culture please get in touch!