On Monday I attended a Harvard Business Review event with Kyle Nel (CEO & Co-Founder of Uncommon Partners), a very smart guy and one of the best presenters I've seen for a long time. He took us through a whirlwind of stories about his experiences enabling change (digital transformation) in large organisations.
I jotted down a couple of his points but thoroughly recommend you read his book, Leading Transformation: How to Take Charge of Your Company's Future or see him speak to get the full picture.
He started off pointing out that people have not changed much over the last hundred years but technology has. People and firms are inherently reluctant to change. Constant retrenchment is not a winning strategy. Look at Blockbuster. The CEO said people love running into their neighbour when they rent a film...
People are more scared of doing something wrong than excited about doing something right.
Sequential decision making means that people create blockages in their processes. Startups make multiple changes at once and large firms need to emulate that.
Nearly every large company about to embark on a transformation journey will set up an innovation lab and staff it with millennials who are able to think differently and embrace change. They pay them lots of money to flaunt the dress code & blow loads of money on experimenting with all sorts of tech. They all have a 3D printer, even finance companies have them and nobody can tell you why.
After a year or two, they tell you that they discovered some whacky new product/ service offering that the board dismiss as too left field. All the Millenials leave (and probably start up a competitor with the ideas they came up with). The thing every company misses is that it’s not the sparkly tech that drives innovation, it’s the people. They need agile thinkers able to innovate and break down accepted norms. It’s not rocket science but neither is it easy.
For companies, the only risk is not taking risks.
Leaders know that their job is to transform their organizations to keep pace with technology and an ever-changing business environment. They also know that they are bound to fail in doing so. But this discouraging prospect is not because they won't be able to solve a technological or strategic problem. Leaders will fail because of intractable human responses associated with change--responses such as fear, ingrained habits, politics, incrementalism, and lack of imagination.