Michael Wade – Part 2: The Key to Fast Execution
The first question that the companies need to ask themselves is: “Why transform?”. And understand whether the transformation needs are intermediate, medium, or something more in the longer term.
It depends completely on the company, the industry, and their current level of maturity and how they need to transform. We have found generalizations and key things that organizations need to think in any type of transformation.
The first one, the guiding principle of any transformation initiative, is that companies need to be a lot more agile than they have ever been before. Only, because the speed of change and unpredictability of change demands that they are agile.
The old model favors having a very well defined strategic direction with milestones and clear deliverables. This is not as it should be. The reason is that the landscape changes so much. Those milestones that you set a year ago or two years ago maybe completely inadequate and not valid any more.
”Organizations need to constantly redefine and rethink where they are going based on the changing landscape. That is what we call: agility” Michael Wade
Agility consists of three things: hyperawareness, informed decision making, and fast execution.
The first one, hyperawareness is the ability to see clearly around the corner and notice the trends. Even companies in the traditional industries need to be much more aware, not just about their own companies’ ecosystem, but also look outside of their traditional ecosystem for potential opportunities and threats.
The second thing is informed decision making, which is taking the information that was obtained by being hyperaware and then making informed decisions. The digital foundation of this is big data, data analytics, and collaboration tools. So you not only see what’s on going, but you are also making informed decisions.
The third one is fast execution, which is being able to move quickly. Much more quickly than ever before. It’s about testing and learning, and about experimentation – “Thinking big, but acting small”. It’s about learning from failure. That is the foundation of all companies and how they transform to be more agile.
If we look at these three things: hyperawareness, informed decision making and fast execution, they are like cog wheels. They all feed into each other. Transformation is not so simple, because organizations are doing all of them at the same time. You try to be hyperaware, you are making decisions, and you are acting quickly.
We also have data and tests to measure organizations’ agility. There are often elements that organizations do well and elements that they don’t do so well. Overall the data proves that fast execution is the most difficult one . Second one is informed decision making and the least difficult one is hyperawareness. But that is not to say that hyperawareness is easy or fast execution is impossible.
The change required is bigger in the second two. Hyperawareness is kind of an independent thing and you can, in person, go out there and collect market and competitor data. Or you can have an independent unit that goes out there, does social media scanning, uses competitive intelligence, or anything that helps you to be hyperaware.
Hyperawareness is more difficult internally. How are you hyperaware of what’s going on in your organization or workforce. What people are thinking and saying in this business unit, or in this customer facing group. It is little harder, but hyperawareness is not the challenge.
Informed decision making is hard, because the organization needs to break down the mechanism, by which people make decisions.
But then there are industries, where the physical product cannot be digitalized very easily, like oil and gas, energy, health care, pharmaceutical, and manufacturing. These other industries, which are more towards the edge of the Vortex, are not as vulnerable and the stress to transform is not so visible.
”In many companies the higher you get the more intuitive the decision making is. And that’s a dangerous thing” Michael Wade
If the data is analyzed correctly, it gives you very clear insight as to what is going on. Which it is often ignored by senior managers completely. Informed decision making is tough, because it requires taking information, analyzing it, and sharing it, and that is very hard for legacy organizations.
Overall, the hardest one is fast execution. For big companies that goes against everything they are used to. They are careful by nature. They have governance around decision making, which is of course important, but in traditional environments governance is actually a barrier against moving fast. They don’t often have the freedom to fail or the willingness to experiment. That goes along with fast execution, and why it is extremely difficult in many traditional companies to manage.
“A while ago I was teaching a group of people from a pharmaceutical company. A very successful company, by the way which is a part of the problem, that is trying to set up a digital unit. The lady running the digital unit was in the room, and she was really frustrated, because half of the time she was fighting internal bureaucracy and making PowerPoint presentations for senior management. She felt that she is not given the freedom, not given the autonomy to move quickly enough and make decisions on her own. “
Leadership best practice: Organizations need to break down the decision making model and rethink it in a way that enables fast execution.
Actually, it requires breaking some of the internal processes and bureaucracy to make that happen.
Michael Wade IMD Professor of Innovation and Strategy and Cisco chair of Digital Business Transformation
I define digital business transformation as organizational change through the use of digital technologies to materially improve performance.
It is a simple definition, yet difficult to master.
Certain industries have been on the vanguard of this changes. Other lag behind.
Eventually, digital will become the ‘new normal’