Most executives agree that successfully implementing a business strategy is usually a lot more challenging than developing it. Unrealistic or overly-academic theories, while persuasive on paper, can be costly in practice and all too often lead to passive resistance or even ’tissue rejection’ by the host organisation. In these situations, advances in technology, increasingly software related, are frequently perceived as a ‘silver bullet’ that can ensure effective delivery of the anticipated change.
Undoubtedly, digital has huge potential: to fundamentally transform the business operating model; to unlock the ‘impossible challenge’; to greatly accelerate change; and to intimately connect a company to its customers in real time. However, digital can also expose a company’s inner contradictions, reveal hidden pockets of poor performance and even lead to perceived core capabilities be seen as critical weaknesses. Digital also adds more uncertainties, particularly around customer expectations, which are increasingly defined by the technologies they use in their day-to-day lives.
In our work with clients we see a number of commonly recurring pitfalls that all too often lead to failure in digital implementation:
- Specious certainty: Unrealistic expectations of technology
- Neglecting organisational alignment: Believing that a new technology system will fundamentally transform the organisational culture and employees will simply adapt
- The language we use: Creating a constrained environment by, for example, saying no or shooting down ideas; generating false certainty through over-simplistic or over-deterministic metaphors
- Underestimating behavioural issues: For example, failing to adequately consider employees before embarking on change; misapplying or failing to appreciate behavioural levers; mismanaging employee resistance; failing to communicate adequately.
How to make digitally-enabled change successful
1. Invest, pivot or stop?
One of the Rockefeller Habits, attributable to US oil baron and philanthropist John D. Rockefeller, urges us to ‘plan and prepare’. Only two time frames matter: a ten-year plan to align on a common vision, and a 90-day, data-driven plan focused on overcoming bottlenecks. Within 90 days, firms should be able to make a key strategic decision – invest, pivot or stop.
Companies can easily become focused on delivering large-scale, three-year plans (eg major enterprise IT projects). Invariably, this involves detailed, up-front programme specification and extensive ‘left-to-right’ planning, leading to outcomes that directly undermine the ability to turn strategy into successful execution.
The most successful companies use data analysis and insight from adjacent industries to continually assess and regularly revisit the decision whether to invest further, pivot or stop. Once a trajectory has been agreed, they adopt a ‘right-to-left’ planning approach with agile delivery. At ADL, our own internal manifestation of this approach is a short Phase 0 (rapid analysis focused on a clearly bounded ‘exam question’); Phase 1 (to prove the ‘art of the possible’); and a Minimum Viable Solution (MVS) to answer the exam question and build momentum through rapid iterative enhancements to the solution.
2. Design first, technology second
Putting technology before design, which is effectively setting the ‘how’ before the ‘why’, and failing to address underlying organisational and communication structures will simply widen the gap between strategy and execution, and between anticipated outcomes and reality. A ‘design first, technology second’ approach is much more effective: consider the underlying purpose of the strategy and then carefully design it, with the employee or customer in mind, to take into account the functional (ie technically required) and non-functional requirements (ie how people actually will use the technology) before defining how best to implement the solution.
3. Communicate for uncertainty
‘Soft Systems Thinking’ reflects how language can alter one’s ‘Weltanschauung’ (world view). Programmes and projects are typically defined by language and nomenclature that aims to set goals and targets, define activities, and identify and manage risks. The shared language used is an important factor in determining how the team perceives values and priorities, and how it behaves in relation to risks and outcomes. The language can also leave little room to move sideways, or explore new ideas, which in turn can lead to promising opportunities being discarded too early, and failing ideas persisting for too long.
4. Engage your most important asset
Implementing change is hard because organisations are composed of people, who have different perspectives, incentives and motivations. Often referred to as the ‘soft’ side of delivery, it is invariably the hardest. In our experience, companies that do not obsessively consider employees before and during each stage of strategy execution are likely to fail.
5. Use ‘Next practice’ rather than best practice
Digitally-enabled strategy implementation, especially in large companies, takes place in complex open systems. These open systems comprise interactions from a diverse range of individuals acting with a degree of autonomy and unpredictability. Trying to oversimplify such a system in order to implement a rigid, deterministic strategy is destined for failure.
Instead, companies need to identify and acknowledge when a system is open, with strategic plans assuming emergence and uncertainty. Management should maintain a clear view of the desired outcome and goals, but focus on delivering the next part of the plan rather than adhering to the longer-term programme, while providing ‘invest, pivot or stop’ decision points if new evidence challenges the initial strategy. This evidence should include internal data analysis combined with an external and forward-looking focus on similar and adjacent industries. This type of adaptive approach, which we refer to as “next practice,” has been shown to be far more successful than the traditional best-practice approach.
In the 1860s Helmuth von Moltke, the head of the Prussian army, postulated that ‘no plan survives contact with the enemy’. This observation has proven immutable over the last 150 years, and successful leaders, more than ever, need to constantly adapt in order to improve the chances of successfully realising their strategies, while staying aligned with the core mission and vision. In today’s digital age this fundamental truth still holds, because at its heart, strategy is a human construct that transcends individual technologies and structures.
This article was supplied by Greg Smith, Mandeep Dhillon, Laurie Guillodo, Xabier Ormaechea and Carl Bate of Arthur D. Little.