Throughout my IT career, I cannot count the numerous times, we have come up with the “perfect” technical solution. Allowing companies to digitally transform themselves, propelling them forward into a sustainable future.
Just to hit a dead end, because the current company structure and culture had no room for such transformations.
A little story
A very specific story comes to mind of a Fortune 100 company in Switzerland, whose main vision was and still is to become No 2 in their industry sector, through the means/differentiation of providing outstanding customer service.
In order to assist this company to undergo a needed digital transformation towards a customer-centric model, I put a team together of world-class experts, comprising of industry-and technology experts and consultants specialized in process re-engineering.
Very soon it became clear that their existing IT Systems, grown over the past 20 years in an organic and cumbersome manner, where not up for the job of putting the customer in the center of their companies universe.
The IT environment was comprised of many different applications, not really communicating with each other, requiring lots of manual data entry and duplication, full of custom code, patches and fixes here and there. A nightmare for any customer service person, needing to have to open many different applications to serve a client. No, this IT environment was definitely not customer centric.
But the worst still came. There was no way of making the existing environment customer centric. Due to the organic growth, and no proper implemented development methodology, nobody had an overview what those applications and its add-on really did. Meaning that any change required, ended up being highly risky and had a cycle time of over half a year. Agility and flexibility was out the window.
Nobody right in their mind would drive a car in such a condition. Held together by rubber bands and chewing gums. Such cars would not pass inspection. They would make the decision to scrap the car and get a new one. One that is fit for purpose, meets their current needs and is safe. Where they can predict operating, service and maintenance costs. But no… quiet often, when it comes to IT in organizations they keep on driving with this barely functioning car.
Also this organization, against any common sense, decided to keep on driving with this old car. Yet again they just applied some newer versions of their CRMs (yes you heard me… multiple CRM Systems), patches and quick fixes here and there. And today, 3 years later, they are still where they were 3 years ago… far away from a digital transformation with their customer needs at the core of their business dealings… and their vision to become Number 2 in their sector … well…
I have to add here, this story is just an example of so many companies I have seen over my 20 years career. I learned from the failures of huge corporations. Having had the opportunity to work as a consultant for companies such AIG or Exxon before their big crashes. Today I can predict with pretty good accuracy which company will make it to the top, stay mediocre or even go under based on their IT Systems, their company structure, culture and their leadership philosophy.
What happens with common sense driven approach in such organizations?
- Short Term mentality based on quick profit gains versus long term purpose and vision driven organization
Today most organizations are driven and led by short term profits. Responding only to annual dividends and the quarterly margin gain needs, demanded by the share holders. Executives of such organizations have no room and no time to develop a long term and sustainable company. Indeed, their whole focus constantly goes into urgent and pressing issues. It leaves no room for implementing a long term vision with a fit for purpose organizational structure and supporting IT Systems. Frankly, most of these organizations do not even have a vision. And if they have one, they do not base their actions and decisions on it.
- Self preservation versus a value creation driven organizatio
Executives of such companies know if they do not bring the results here and now, next year they will be history. So they do the only thing they can do. They apply everywhere in the organization quick fixes, like chewing gums to their IT Systems, to keep the ship barely afloat as long as possible. They keep on flogging the dead horse by any means. Well, I do not have to say what this mentality does for the company culture and morale. It surely is not conducive of creating value for customers.
- Cost cutting measures versus empowering employees
Cost cutting is at the core of those organizations. Decision power of financial budgets gets centralized even for the smallest amount. I know organizations where the MD can not even order a pencil. They drive on a reactive approach to meet yesterday’s financial goals instead of an active approach empowering their employees to increase their productivity/output. Even so numerous studies show that an empowered and intrinsically motivated employee produces in the range of 30% more profits or adds to the profits than their unmotivated and disillusioned counter parts. No, those cost cutting, short term driven organizations have no room to make a huge investment in a new IT System that has in average a 1 ½ to 2 years ROI. In many cases the Exec board cannot even make such a budget decision. And if you dig into it nobody can and will.
- Hiring and firing mentality versus talent retention and development mentality
In such organizations it is the norm to see a new CEO and a complete new Exec team in place in intervals of 1 to 2 years. These organizations go in cycles of complete stand still for at least 6 months, nobody making any decision until a new Exec team is in place. Followed by cost cutting measures and firing wave and then maybe after a year the organization has time to take the focus away from themselves towards what really counts… their customer. But by then loyalty based on trust of customers and employees is down the drain, knowledge has been lost etc. It is basically devastating, especially if this cycle keeps repeating it self. Yes, and the IT systems… in year 2 they may start to look at it but until they are finished with the analysis and ready to make a decision, those decision makers are already replaced again.
As I am writing this I am starting to be amazed that such organizations can sustain as long as they do. The only explanation I can think of; is that each single one of these organizations has some very good people, keeping it all afloat, doing their jobs relentlessly. Because they follow their own inner values and beliefs. They are resilient to the craziness at the top and they keep out of politics.
Knowing such individuals personally, what makes them tick, their values and beliefs, maybe they should become leaders of the organizations. They believe in creating value for others by serving using servant leadership principles. They stay true to their beliefs and values, no matter what is going on around them. They are the true authentic leaders in the organization. So maybe all we have to do to turn such organizations around, catapulting them into the digital transformation age is changing the leadership approach, to the one used by the people who keep these organizations silently afloat in the background.