Organisations are faced with many challenges in the digital age. Gary O’Brien, Principal Consultant and Organisational Designer, ThoughtWorks, explains how they need to evolve how they plan to be able to adopt new and emerging technologies.
Peter Drucker’s key ideas and predictions have largely stood the test of time and formed the foundation for how a modern business adapts. As one of Drucker’s most famous quotes goes, “if you want to do something new, you have to stop doing something old.” Therein lies many of the challenges for traditional organisations in the digital age.
Call it what you like: transformation, disruption or innovative new technologies but the bottom line is that traditional organisations are faced with a variety of new challenges. Businesses are being asked to understand the customer, to make numerous, smaller decisions on a tighter timeline, get to market faster and to adopt technology and extract value from it like never before. Responding to these new challenges with old systems of thinking and executing won’t suffice.
Instead, organisations must evolve how they plan, how they’re structured, how they budget and distribute money, what they measure, their ability to manage constant change in their architecture and their willingness to adopt new and emerging technologies. CIOs and CFOs have the financial and technological awareness that can unlock the facade of transformation and drive real, meaningful change. This evolution relies on the leap of faith that the more value you deliver to customers, the more profitable you will become.
In order to determine whether their organisation is ready to create truly meaningful change, CIOs and CFOs should consider these key questions as test points:
● Can you plan incrementally? While a multi-year view of the strategy is a great north star, the plan needs to be allowed to emerge incrementally and adapt as new opportunities, learnings and pathways are discovered. Leaders must come together regularly and be able to evaluate if their investments are having the intended impact and whether the strategy is achieving the desired outcomes. If not, it’s time to redirect or nudge the business.
● How flexible is your structure? If you have a talent scarcity in one area and someone leaves the business in another area, can you use the headcount on the scarce talent? Traditional firms unfortunately get tangled in a web of financial and headcount budgets tied to the bonuses and individual leaders. Being able to recruit for organisational wide needs, without fear or favour and without causing a leader to miss their targets, is critical to evolving business to maximise value delivery.
● How adaptable is your investment slate? If a high value opportunity comes up, are you able to move funds from one initiative to the new one regardless of where the funds were originally allocated? Having responsiveness and flexibility through the finding cycle means the funded work is being done incrementally, so value is being released often and resources can be reallocated along the way as needed. It also means that leaders are in it together and have no issues with funds leaving their budget to go to someone else’s. This way, the business is able to work on the most valuable initiatives.
● Are you measuring what matters? What ability does the organisation have to measure the value being delivered? Organisations regularly get caught up in lagging, internally focused financial measures as a way of prioritising, tracking success and performance bonuses. Applying the incorrect measures leads to incorrect behaviour and false readings of progress, which can lead to poor decision making. Understanding measures like profit, revenue and completion are not as useful for the short cycle. Incremental decision making on what work to do, where to invest money, when to stop or change direction, etc. is a key component of a responsive organisation. Businesses must be able to use customer value as the measure determining what work must be done and whether a particular programme or project is successful.
● Can your technology keep up? How ready is your architecture and technology platform for frequent change and regular deployment of small work packets? The ability to work in smaller chunks is how meaningful, long-term operational change can happen. Without these smaller workloads, the organisation can make regular decisions about scarce resources and continue to nudge the business, so it is always focusing on the most valuable thing. Smaller workloads give you faster feedback loops that help teams make the best decision to progress you towards your strategic outcomes.
Of course, not all of the questions above lie solely in the realm of the CIO and the CFO. But, without a CIO and CFO who are open to driving the changes needed and becoming sources of knowledge and design, it is hard to imagine meaningful change occurring. As Peter Drucker said, “No one learns more about a subject than one who is forced to teach it.” It is incumbent that CIOs and CFOs are consistently educating themselves on modern practices and then teaching others. This way their organisations can survive in a fast paced, ambiguous time full of new threats but also new opportunities.