I hope you’re all staying safe and healthy where ever in the world you are. It’s a crazy time we are currently experiencing. We’re dealing with a new range of complexities, stresses, and anxieties due to this awful, awful virus.

It’s been a while since I’ve written to you all. 2019, in particular, was a challenging one. I dealt with a few personal bumps throughout the year. The death of a close relative late last year meant my side-projects all fell to the bottom of my priority list.

2020 & COVID19 has forced me to rethink a few things and has brought focus on what is important.

For business, now is also a great time to create alignment and focus. With a looming recession, organisations need to understand who they serve and why? What value are you bringing to the world? Are your current initiatives moving you towards your vision?

Some organisations are now forced to ‘go digital’ for the first time. But as fast as they come up to speed, we could soon see things flip on their head as we learn to live with COVID19.

Slow-moving organisations risk getting left behind. There’s no better time to rethink how you approach your work!

The 5 culture changes required to thrive in the digital age

The uncertainty created by the last few months has forced us to make changes at a pace never seen before. An increase in change is nothing new. Change has been accelerating for the last 150 years. The last couple of decades of ‘the digital age’ has really poured gas on the fire. Being able to adapt will be a key survival skill for organisations going forward.

Before the current crisis, many organisations still had team structures built around silos. Silos aid the command and control systems required for the physical labour of 100 years ago. Top-down systems benefited management seeking efficiency and predictability. They also came with many side effects which don’t work in today’s world.

Organisations are struggling to keep up. Rapid advances in technology, new competitive pressures, and the growing needs of customers. Things are getting less predictable. I’m sure no one had “infectious diseases” in their annual business plan!

The volatility requires new styles of leadership, communication, and adaptability. Some leaders are not equipped to deal with this, products of the old regime.

In his book ‘Brave New Work’, Aaron Dignan argues that our organisations are not machines with upgradeable components. They are “complex human systems full of potential waiting to be released.” Embracing a transformation of our organisations will enable our employees to do the best work of their lives.

So what are the hallmarks of a digital organisation? This year marks the 5th anniversary of the Responsive Org Manifesto. The Responsive Org Manifesto sets out 5 key culture changes required to thrive in a digital age. It’s never been more relevant!

1. Purpose over profit

One outcome of the modern-day stock market is a short-term focus on profit. Automated trading has resulted in the average shareholding time frame to plummet to around 20 seconds. Yep, you have spent longer reading this paragraph.

We regularly see stock prices increase during employee stand-downs regardless of their importance to business continuity. Then there are unethical behaviours like those discovered during the Australian royal banking commission.

Your customers, employees, and shareholders seek a company that focuses on more than making money. They want a strong purpose which galvanises, motivates and drives change.

A recent study by Ernst & Young found that 87% of consumers believe that companies perform best over time if their purpose goes beyond profit. Many traditional organisations are struggling with this shift.

When starting Nike, Phil Knight strived to create the best running shoe on the market. He knew that the market was much bigger than the traditional elite running crowd. Nike set out with a bold vision to create a sneaker that anyone could wear.

Bring inspiration and innovation to every athlete* in the world.

*If you have a body you are an athlete - Nike mission statement

Their purpose is a great GPS for guiding their decision making.

There are now several initiatives which combat short term profit-driven thinking. Eric Ries, author of ‘the lean startup’, launched the long term stock exchange. The LTSE is a new type of stock exchange. It creates an opportunity for 21st-century companies to thrive. Last year it received SEC approval to start trading.

“We are building a market where companies are rewarded for choosing to innovate, to invest in their employees, and to seed future growth.” - Eric Ries

It’s an exciting development to keep an eye on.

2. Networks over hierarchies

There’s a good chance you are reading this article on your mobile. You are definitely not within 10 meters of me. Our ability to communicate with people far and wide has never been easier.

Increased technology and improved ways of working have led to teams that self-organise. It’s never been easier to collaborate on work and make complex decisions.

In an industrial era, complex work required managerial oversight. With every extra layer of management, the cost of decision making and communication overhead increased. Too many layers became a hindrance to progress. Today we don’t need the same oversight, but it requires a level of trust many are not willing to give.

Complex decisions are rarely best left to individuals. A 2004 study by Scott Page of the University of Michigan and Lu Hong of Loyola University in Chicago found that in a theoretical model of decision-making, a diverse group of problem-solvers made better decisions than that of the best problem-solving individuals.

One example of this is the “wisdom of the crowd” technique used in software development. It’s used to estimate the complexity of requirements. Each member of the group votes on the required effort to build a feature. Outlying team members debate their differences and align on a compromise. The conversation encourages deeper thought by the group and achieves more accurate estimates.

It’s not perfect. The wisdom of the crowd can fail if there is an over-confidence/pessimism of the group. A 2011 study by the Yale school of management found that group predictions about American Football results skewed away from the real outcomes because of a bias towards the league ‘favourites’.

3. Empowerment over control

I recently read that the former CEO of Netscape, James L. Barksdale once said to his team, “If we have data, let’s look at data. If all we have are opinions, let’s go with mine”.

I like that. In a world where everyone has an opinion, it’s often hard to determine the signal from the noise. Back opinion with evidence, and it’s a whole different conversation.

Data-driven decision making is one way that we can change the empowerment of teams. Some organisations will still enjoy a command & control style leadership. Knowledge work requires a different model.

Creating empowerment is the hardest principle of the manifesto to put in place. That’s kind of strange right? Why is it so hard for us to let go of control and let our teams make the decisions?

We can only create empowerment by following the previous two principles. Creating purpose and removing hierarchy.

Without purpose, your team will become unmotivated. They will orientate around the strongest voiced individuals. Create hierarchy and you will take decisions out of your employee’s hands. The higher in the pyramid, the more power. A great structure to suppress ideas and stifle innovation.

Both situations result in less autonomy to make decisions based on the information they hold. The system works better when information can freely flow. The people who can make the best decisions are the ones closest to the information. Those who give the best insights from customer complaints and requests.

You need to inspire and empower. Allow others to pursue the work they think will make the biggest difference.

Steve Jobs summed it up nicely. “It doesn’t make sense to hire smart people and tell them what to do. We hire smart people so they can tell us what to do.”

4. Experimentation over planning

“Plans are useless, but planning is indispensable”. —Dwight Eisenhower

The principle behind this still rings true today, yet a plan remains valid for an increasingly short period. Exponential change is affecting all aspects of life. Organisations can no longer rely on the execution of long-term plans.

There is still value in long-term thinking. Instead, the way we approach long term thinking needs to become more malleable. We need to build mechanisms and rituals which allow us to sense change and adapt.

Advancements in technology, customer needs, expectations, and creative business models mean we cannot rest on our laurels. We need to treat strategy like a flourishing garden. With constant care and attention.

Organisations need to seek learning and evidence over predictability and efficiency. Progress through iteration, as opposed to perfection.

Break down your plans into small skirmishes. Create bets and hypotheses. Test, Test, Test. It will lower your cost and effort, but also maximise your chance of success.

5. Transparency over privacy

I’ve been lucky over my career to work at organisations where information sharing was the norm. Wiki pages, SharePoint sites and search tools have resulted in information being readily available. If I couldn’t find the information itself, I could at least find the person who knew where it was.

But that isn’t always the case. In many organisations, information is still a source of power. Information hoarding may be the key to getting a promotion before the guy next to you. Important decisions are made behind closed doors without explanation, and communication on a needs to know basis. Ugh.

Equally, organisations no longer have a shortage of data. Quite the opposite. Instead, the challenge is now identifying who can leverage the data to create new revenue opportunities.

Information sharing between organisations is changing as a result of increased transparency. Intellectual property and patents have lost their worth as a competitive advantage. Models are now appearing where traditional competitors are instead collaborating. New business models are forming where everyone wins.

This has lead to a new set of challenges where no single organisation has formal control. It requires a fundamental shift in thinking and leadership skills.

There is a silver lining in the fight against COVID19. It has created the opportunity for us all to unite against a common enemy and find a cure. We are seeing many of these new skills on display. The mission is clear, stop the virus spreading. Information sharing between academics and within the medical profession has never been stronger.

I wish you all good health and good luck in the next period. The virus will likely have a lasting impact on our economy and society for the next decade.

If you are experiencing a tough time due to the current crisis, please do not hesitate to get in touch. I’ll do whatever I can to assist.

In the words of the great philosophers’ Bill & Ted, ‘Be excellent to each other’.