Why we need a Lean Enterprise transformation
The word transformation seems to scare people off. Many people associate the word with traditional, linear, multi-year programs that don’t take into account the speed of change, rarely test before deploying at scale, and expect significant investment of resources before any measurable business outcome is achieved. And I agree; those efforts scare me too!
You know the type of programs I am talking about — they cost millions of dollars, they are run by a vast team of consultants huddled in a war room somewhere, with very little visibility or transparency to the rest of the organization. They are rarely aligned to strategy. Even less frequently are there any KPIs in place that can tell the team whether they are going in the right direction. When asked about what the goals of those efforts are the standard answer is “We will know when we get there”, my favourite type of response. And to make matters worse, the majority (over 70% according to McKinsey survey) of those efforts fail due to: lack of alignment, lack of holistic approach with multiple and often competing efforts happening at the same time, lack of interest from the leadership team to maintain or invest in the effort over a period of time; lack of employee engagement . There is not much we should be surprised about in the data. Let’s face it when you hear the word transformation you immediately think “Am I going to lose my job?” or “Here is another effort I need to support, what’s in it for me?”
So isn’t it time we do things differently?
The organizations we work with may have different burning platforms, but they all understand that the days of status quo are over. Change is not easy, it’s not comfortable, the concept of “self-disruption” may not sit well with all executives, especially when it’s their businesses (and their bonuses) that are being disrupted. But I don’t think any of them are under illusion they really have a choice (and if you are reading this thinking “My manager or my CEO thinks we are going to be fine — we are too big, we are not going to be disrupted, this is just a temporary set-back” etc..just remind them of Kodak, Blockbusters, ToysRUs etc). So if we accept change is inevitable, we also need to accept that the change this time around is not about replacing one operating model with another (because by the time you make that change, the new model is going to be outdated too). The new approach and the key skills we all need to develop are focused on getting comfortable with continuous change, continuous learning and rapid adaptability. A friend recently said “The only continuity I accept is one of permanent change: It’s not always a comfortable position, but it’s a necessary one.”
And this is where the concept of Lean Enterprise comes into play. At Spinnaker we define it as: “Enterprises operating their core businesses at scale while simultaneously adapting to change through continuous learning, self disruption, focus on customers, and innovating to drive long term growth.” So if that’s the ultimate goal — enterprises that are so adaptable that they can change direction and adapt quickly to new market conditions, new competitors and generation z entering workforce, than it should be obvious that in order to achieve that goal the way we are running transformation efforts needs to change too.
Can you imagine a transformation effort that’s built on the same set of principles as the Lean Enterprise (continuous learning, small bets, transparency, embracing uncertainty, business agility, customer centricity etc)? Can you imagine a transformation effort that’s iterative and learning led, where you are expected to fail early on, run experiments, prove that something works in the organization before it’s rolled out at scale? An effort where we know over the 3–5 years of the transformation program, everything in and around the organization will change (strategy, competitors, employees) and so building that adaptability into our transformation efforts and modeling and testing behaviours that we ultimately need in the organization is really the only way forward. In this new world, there is no straight line!
So what does this mean? Can we leverage high level principles from Lean Startup and Agile and tactical approaches to implementation such as Google sprints on transformation itself? Is it possible to show real and measurable business outcomes in a week, in a month, in 3 months instead of waiting years to see whether the effort is going to pay off? What would a transformation experiment look like? Can we get a small, cross-functional team to agree a transformation roadmap of experiments that would prove a new incentives model, a lifecycle framework, new governance model or any other number of things we need to change in our organizations in order to achieve desired business goals (and agree a set of KPIs to keep our efforts honest)?
These are just some of the topics Jonathan and I are covering in our upcoming book Case for Change — Demystifying Lean Enterprise transformation https://www.senseandrespondpress.com/the-case-for-change and in a series of workshops and master classes over the coming months. Join us in Madrid, London or NY (with more locations tba soon www.myspinnaker.co). And keep the change going!
