The Four Battles We Have to Win: Fear, Ignorance, Guesswork, Diffusion of Effort

Laurent:

Hi Pascal. How are you today?

Pascal:

Hello, I’m good. How are you?

Laurent:

Very well. Today we’re going to talk about the four battles we need to win to succeed in our Digital Transformation Journey. We’re going to start with a brief definition of each battle, both for executives and middle managers, and then we will focus on the counter measures to win each battle. So, let’s start with an overview. What are the four battles we need to win?

Pascal:

Based on the work we’ve done together over the years with major multinational companies, the four ongoing battles are:

• Fear
• Ignorance
• Guesswork (due to lack of data).
• Scatter or diffusion of effort (largely because we lack the data).

Laurent:

Very good. Let’s start with fear. What does fear look like and why is it such an obstacle?

Fear

Pascal:

Senior leaders want to look like they’re in charge. They want to exude confidence and inspire their teams thereby. But technologies like BlockChain, Internet of Things, Data Analytics and Artificial Intelligence can be hard to grasp, and even harder to stay abreast of – even for a leader with a technical background. And even if you have a reasonable understanding now, things are so dynamic that in six months or a year you no longer understand it.

For non-technical leaders the fear can be even deeper.  Let’s not forget that even ‘basic’ smartphone technology can seem miraculous to a non-technical person. So here I am, a senior leader responsible for my team, company and community, trying to apply technologies I don’t understand very well in new ways to create completely new businesses.  That’s a tall order! And fear is natural. 

For middle and frontline managers, the fear is even more immediate. “Am I going to lose my job? I don’t understand these New Ways of Working. Design thinking, lean startup and growth hacking are all foreign concepts, and I certainly don’t understand the technology. Will I have the chance to level up my skills?” 

So both senior and frontline managers have serious and understandable fears that often amount too: Am I obsolete? Can I still make a contribution? Will I let my team, company and community down?

Laurent:

So, the fear comes from perceiving the emerging technology as a threat, instead of an opportunity.

Pascal:

Yes, and that’s the key mindset shift: Digital disruption as an opportunity for growth and learning, and not a threat. 

Laurent:

Okay. Let’s move to battle number two – ignorance.  Do you think it’s related to the fear? 

Ignorance

Pascal:

Ignorance is a major cause of fear. If I don’t understand something, I may well fear and avoid it. On an executive level, ignorance often entails senior leader lacking a background in technology. As we said above, even ‘basic’ smartphone technology can see miraculous and unfathomable to the non-technical person.  And it’s often hard to make the abstract concrete and apply it to your business. 

Even leaders with a technical background can struggle greatly when it comes to understanding new business models enabled by Digital technology. My manufacturing colleagues, for example, often struggle wrapping their heads around the implications of say, digital platforms.  Imagine you’re a senior production executive in a leading automotive, energy or aerospace products manufacturer.  You have spent your professional life mastering these complex and marvelous technologies and supply chains. You understand these pipelines and the underlying winning logic. The latter usually entails reducing waste, identifying and elevating bottlenecks and the like so as to reduce lead time and cost.

But your future growth depends on your ability to create usable data and to serve as a platform that connects your customers and their data with tech firms that know how to translate the data into useable knowledge.  Digital platforms require a very different winning logic that emphasizes connectivity, ease of use and Cloud capability. Does the leader have the motivation and energy to climb all these learning curves?

One of our biggest Digital transformation challenges is how to make learning as safe, easy and enjoyable as possible for leaders at all levels.

Laurent:

Thank you. Let’s move to battle number three: guesswork caused by a lack of data. Could you please clarify what we mean by that?

Guess Work

Pascal:

Digital transformation to a great degree entails putting together a portfolio of digital initiatives including a) digitizing existing customer journeys, b) creating new customer offerings, and c) new digital ventures. But how do we decide on this innovation versus that innovation, this partner versus that partner, this experiment versus that experiment? 

The data needed to answer such questions often does not exist anywhere.  And in the absence of data, we get anxious and this of course leads to fear and all the other negative consequences. How to provide leaders with the data they need to make these critical decisions?  We have to learn to develop our own data through Lean experimentation. Otherwise, we’re flying blind and fearful.  We struggle in the darkness and our efforts are usually unfocused and ineffective.

Laurent:

And so, companies make decisions based on opinion, instead of on data. This creates an opinion-based decision culture, and usually the highest paying person who makes the decision. Often the highest paid person without reliable data. 

Pascal:

Very good. In fact, we have a funny acronym, HIPPO, which reflects this form of management. Too often we don’t know how to create our own data. We seem to believe somebody else has to create it for us – a ‘data system’ or some IT group that miraculously provides the information we need.  That’s not how things work unfortunately.  

The root cause of poor or missing data and the subsequent guesswork differs by industry. In the Power industry, for example, customer journey data is often weak because people are uncomfortable running experiments.  The Power industry is full of frightfully dangerous equipment, rightly focused on Safety and frowns on experimentation.  But we’re not talking about experimenting with a critical piece of equipment or endangering the power source of community!  We’re talking about running social media experiments to improve the functionality of a customer app or website.  But the culture can have difficulty with it.

In Healthcare, people often wait for very slow central ‘data management systems’ that provide weak data a month or two after people need it.  We’ve shown that you create your own useable real-time data with much humbler and immediate approaches. Infections, for example, are a key measure of Safety and Quality, and we can get usable data by simply talking to the microbiology labs on a daily basis.  “How many infections did you find in the samples we provided yesterday?  Can you give us a breakdown?” Such raw numbers give you a good sense of whether a given intervention is working or not.

Laurent:

Very good! Let’s move to battle number four – scatter or diffusion of effort. What do we mean by that?

Scatter – diffusion of effort

Pascal:

We’ve talked about fear, ignorance, and a lack of data.  We usually buffer these by pressing as many buttons we can. Because we have no way of prioritizing initiatives, we hedge our bets. We thereby launch more activities than we can handle.   The result of course, is that at the most basic level, we exhaust our innovation budget. But we also exhaust our energy, and demoralize our team members.  We spend a lot of money, time and energy, and achieve very little. 

That’s what I mean by scatter or diffusion of effort. At the strategic level, scatter means that we have not defined our aspiration as an organization or the winning logic through which we will achieve that aspiration. Nor have we deployed our winning logic into focused actions plan. Why? Because we have not analyzed and understood the root causes at work. Our tactics are all over the place.

And so, there are two levels of scatter. The first one is strategic scatter, meaning the entire umbrella of strategic effort.  The second is tactical scatter, which means diffuse and unfocused activities.  And the cause is the same – a failure to get to root causes.

Laurent:

Thanks so much Pascal! That was really interesting, and I think it will help our readers a lot.

Pascal:

I hope so! Next time we’ll dig into countermeasures for each of these obstacles.