Insights are Talk-Back!
Through my work in change and transformation, I have met many struggling companies. Two myths are failing them:
- The belief that technology and data will magically create value and save them
- The belief that customer value can be created with classic governance and decision-making
The first one does not recognise that technology itself has no value. Even though we know, it has always been an enabler for both good and bad. A more straightforward way to understand this is that all digital systems, including agile working, are garbage-in-garbage-out systems. If you put harmful ideas in, you get wrong or damaging solutions out of it. So I won’t discuss this much as it is too easy to fix.
The more critical question then is, why does classic governance hinder value creation so effectively?
If I compare the failed to the successful transformation projects I have seen from the inside, then the one thing that created success is simple: Redistribute who makes which decision. Yes, that includes communicating differently and a mix of people and data.
Governance’s purpose is to help make better decisions. A good business decision is a mix of business, customer value and the ability to create both at a sustainable level of effort. Different views help to make the most de-risked decision as it helps to remove bias. Business bias is unsurprisingly highest at larger organisations to the detriment of customer value and creating things.
This bias stems from Henry Ford’s de-skilling days, who locked the ‘smart’ decisions in the upper management department to fit our complex and wicked problem world.
What type of governance should we choose?
In classic organisations, leadership gets a reduced and filtered version of the insights and then applies this abstracted knowledge to prioritisation models to decide on a team’s work.
Modern problems have complex and sometimes contradicting insights. Creating abstraction or only relying on quantitative insights misses an exponential amount of understanding and value opportunities. It is one of the main reasons innovation often dies in organisations and creates billion-dollar companies in the startup world.
We must shift decision making to where the sense-making is happening, the teams close to customers and reality.
Old governance is not sustainable!
Leadership can not increase its time to understand a complex world. The world has a few billion ways to do this every day. As a leader, you must forget about Moore’s Law and start putting Ashby’s Law on your wall.
As General McChrystal says, the only way to fight an ever-evolving enemy is to evolve yourself at the same or more significant pace.
If Youtube had to sign off every video, where would it be today? Yes, likely dead. No data or innovative dashboard will solve the fact that leadership has limited time to engage with all the pieces that reality throws at them. So stop ‘micro-managing’ because that is what you are doing when you set up steering group after steering group and review board after review board.
The only way forward: TeamOps!
It is easier than you think, BUT it is scary for an old mindset. I wonder if it is the equivalent of having your kids go out late by themselves for the first time.
What did we do on the successful side of projects?
We trained teams to be able to do business cases. We showed them clear and straightforward ways to assess value and supported their financial skills. They came back with millions in business benefits.
We trained them and let them get as close to the customer as possible. They found new value and did prove a lot of leadership assumptions wrong; they pivoted and saved millions in mixed investment.
It sounds like magic, but it is not. You can start doing this tomorrow. You can do this with the people you have today.
Governance and decision-making should not sit somewhere where data has been abstracted and simplified. It should sit as close to reality as possible.
Running 1,000 experiments a year to out-pace your competition and grow your organisation needs this shift.
Teams obviously won’t decide on multi-billion acquisitions. Still, they can create the organisation’s future growth if you let them do research, teach them business casing and enable them to do so without interference.
Christensen and Peters have advocated this for decades.
Let me know what you think.
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