The Technology Fallacy: How People Are the Real Key to Digital Transformation (Management on the Cutting Edge)

by Gerald C. Kane

To differentiate this process from agile methods, we refer to it as strategic agility—an organization’s ability to adapt to a changing market environment that occurs as the result of new or evolving technological developments. Because digital threats and varying rates of change are unpredictable, companies must constantly scan the environment for strategic threats and opportunities posed by technology. For example, few imagined that the ubiquitous adoption of smartphones would lead to a competitive challenge to the taxi industry through the rise of Uber.

Some of these changes to industry structure take many years, while others seem to happen in the blink of an eye. As former secretary of state Condoleezza Rice has observed, the timeframe and inevitability of change are much easier to understand retrospectively than prospectively. Responding too quickly and aggressively to

changes may leave companies adapting to the emerging technologies prematurely and potentially squandering time and resources that might be best utilized responding to more imminent threats. On the other hand, failing to understand the urgency of a threat can leave companies in the dust and unable to recover. Although the impact of additive manufacturing (a.k.a. 3-D printing) has yet to be felt by many industries, it has completely disrupted the hearing aid industry in a matter of months.4 Additive manufacturing of hearing aids uses laser scanning to map the patient’s ear, producing a customized product more quickly and with higher qu...

Cross-functional teams can act more quickly than a bureaucratic organization can, making decisions without the lengthy approval or socialization processes that are common in larger companies. Because these teams are made up of people from different functions within the organization, communication and socialization are faster and more continuous across the company. And within reason, these teams can act as they see fit in response to a digital threat. Teams often share knowledge with one another through “open house” meetings, where teams share their results and challenges with other teams.

Different teams can tackle separate initiatives and pursue various options simultaneously. Managers do not need to decide which digital threat to respond to; they can simply determine which of the available options for responding should be exercised at a particular time. Teams that are tackling more pressing strategic threats can be provided with more resources, while teams that are dealing only with potential threats can continue to explore options to leverage when needed.

Cross-functional teams also encourage employees to think differently. Because the teams are made up of people working in different disciplines, they bring in various perspectives and expertise to tackle a common challenge. “People have been focused on business capability delivery but just within particular segments of the business,” says Freddie Mac’s Christine H...

agility means that teams are able to adapt their approach to a changing environment. Cross-functional teams are not likely to achieve agility unless they have some degree of autonomy. While it is critical for senior management to keep its finger on the pulse of the competitive environment, these cross-functional teams must be given a certain degree of autonomy to adapt their plans to the environment. Part of the reason some digital teams do not act strategically is that they are not permitted by their companies to do so. Many organizations’ strategies are locked up in the board room and the c-suite, with the average employee unaware of—or unable to act on—the bigger strategic vision. Instead, digitally maturing companies are working at pushing decision making to lower levels of the organization.

Decide how much you are willing to give up. Agile shifts power from executives to others in the organization, which can be difficult. Executives must decide how much control they are willing to cede.

Prepare stakeholders for the leap. Agile is a different way of working, and you must prepare people for the change.

Build the structure around customers—and keep it fluid. This shift does not just focus on customer needs but reor...

Give employees the right balance of oversight and autonomy. The need for top-level oversight doesn’t disappear—it just changes. Figuring out the...

Provide employees with development and growth opportunities. One risk to agile is that employees become too task-oriented and don’t develop their skills. Effective mento...

cross-functional teams are a type of organizational modularity. She argues that organizations are actually designed to match the dominant technology of the day.9 Just as technological modularity allows for computer technology to innovate faster by allowing different aspects to evolve at different rates, so organizational modularity helps companies respond more quickly. Cross-functional teams can be swapped in and out or repurposed to different tasks as needed.

Teams work on specific projects, with a certain degree of autonomy. They can be repurposed or swapped out to deal with different objectives as goals are accomplished or the purpose of the team is no longer relevant to the organization’s objectives.

Modular organizations will likely look quite different from the so-called flat organizations, with relatively few levels of hierarchy, that were ...

A key aspect of modularity is the ability to source talent quickly and reliably as needed.11

The first step may require that organizations partner with or cultivate on-demand talent markets that sources and integrates talent across networks so that specialized help is available as needed and on demand. Talent markets can be maintained via platforms that monitor, evaluate, and support the talent pool of on-demand contractors.

Some members of this talent market may remain full-time employees of the company, while others may be part-time employees or contract workers. While talent markets have typically been used to manage part-time freelancers, some companies have also begun experimenting with these markets as platforms for assigning full-time employees to projects as needed.

Many people who are not in the market for full-time employment, however, still have valuable skills (for example, student workers, parents of young children, and people at or near retirement age). The crowdsourcing site Innocentive, based in Waltham, Massachusetts, has found that retired workers with specialized expertise are among its most valuable and regular contributors.

Many organizations treat contractors as second-class citizens, but companies that want to attract great talent can’t afford to do that. On-demand talent with valuable skills can choose to work for any project or company. To ensure that they’re able to get the best, organizations should cultivate an environment and incentive structure where on-demand contractors are valued as integral contributors to the company’s strategic objectives. Providing desirable work experiences and environments, opportunities to work on interesting projects, and exposure to different teams can help drive engagement.

Companies that increasingly rely on these talent markets may also need to rethink the nature and roles of the employees who will assemble and lead these modular teams. Core employees are not just full-time employees. They are the people companies will invest in to build and guide the long-term strategic direction of the organization.

Effective

delegation requires knowing how to source critical skills, how to assemble teams and get them up and running quickly, and how to use decision support tools effectively to meet the goals. These skills can provide the organizational agility and the collaborative environment that characterizes digitally maturing companies.

Core employees, even those who are relatively junior, should have a certain level of strategic autonomy to accomplish ...

It is no accident that a key differentiator of digitally maturing companies is the way they intentionally work to develop, maintain, and strengthen employee engagement. Keeping core employees engaged for the long term involves providing more than a paycheck. For employees to want to stay and contribute, many say they need to feel that the organization is willing to invest in them and will continue to offer opportunities for growth.