Why Your Digital Transformation is Destined to Fail – Dr. Anita Sands

good morning ladies and gentlemen that band and Tanya are literally a hard act to follow but I'm very honored to be here and to kick things off today for us here at ThoughtWorks every one of us here in this room regardless of what country we come from what company we worked for or what role you have share one thing in common we each have 168 hours in every week for people like you every one of those hours is an investable assets with a high opportunity cost and therefore I don't take it lightly that you have made a decision to share a considerable number of those hours this week with us here at ThoughtWorks being here is a demonstration of your curiosity of your openness of your willingness to learn but it's also as Tonya said a vote of confidence in thought works for which we thank you our goal is that you will leave here after a couple of days with helpful learnings valuable relationships and answers to some of your toughest problems in short we see your success here over the next two days as our success now before I became a board member I spent a decade as an operator in financial services working in far in for large major banks in Canada and the u.s. there were years that spanned before during and after the financial crisis and for those of you in that industry you will know that it was as they would say the best of times and the worst of times my rose involves something similar to what each of you are endeavoring to do they involve driving change encouraging innovation and leading transformation now admittedly large complex banks are not exactly known as bastions of innovation they are not exactly wired for speed or designed for agility and I'm a physicist by training so every day literally felt like an exercise in what happens when an unstoppable force like digital disruption meets an immovable object like a large Swiss bank but back then I had a dream one which many of you will recognize I dreamed of a world where I would no longer be reliant on mainframes and batch processing I dreamed that I no longer had legacy applications and where my infrastructure wasn't brittle and expensive and were going in for budget didn't remind me of what a gladiator felt like heading into the Coliseum I dreamed of data that was structured and not siloed centralized and not scattered to the four corners of our organization data that was available and accessible not as hard to get your hands around as a freaking Pokemon go I dreamed of vendors who were real partners and not people who just showed up in my office six months before renewal and then to add insult to injury proceeded to pitch the men on my team even though I was the one writing the check I dreamed of contracts that were transparent and easily negotiated not deal terms and discussions that make the breads at negotiations look like a walk in the park I dreamed of a life without technical debt where agile was an actual methodology for us as opposed to an aspiration and for things like CI or CD or continuous anything quite frankly would be my existence instead of the months of testing and and checking that every one of our deployments involved every day yeah every day I had that dream but in reality every day was a lot closer to a nightmare now some of you may be lucky you may work for one of these bright and shiny digital native companies and if you do god bless you and enjoy but if you don't perhaps I can share a couple of hard-won lessons from my time as an innovation and change leader that will hopefully make your path towards transformation a little less arduous as cliche as it may be it is in those times of adversity when you're up against it that you really do learn the most and throughout the course of my career I always kept copious notes and journals because I was determined to learn as much as I could from the people that I worked with and for it's a habit that I continued when I moved into the boardroom where I've had the chance to see disruption and vendor relationships from the other side of the table and where I get to learn from some of the greatest CEOs and leaders in the world I've distilled all of these learnings down into what I now call my wisdom card this is a small sample but I have over 3,000 of these nuggets of advice and observations that I have accumulated over the past 20 years so for today I've selected just a small handful I promise that hopefully will help you navigate the choppy waters of change in your respective organizations put them as kind of things that I know now that I really wish I had known back then and I bucket them into three overarching themes I hope you can read my writing first of all respect the inertia of incumbency secondly understand the power of processes and thirdly build a culture of belonging so let's take them one at a time this was perhaps one of my favorite quotes the pace of change has never been this fast and it will never be this slow again as an innovation in executive I instinctively knew this to be true and I was anxious about how quickly our business model was being disrupted FinTech startups were just sort of spreading up everywhere nibbling at us in the payment space over here showing with Robo advisors in the wealth management space over there and yet I found it hard to instill a sense of urgency in my company's leadership then I realized how much truth there is to the old adage that he who does not move does not notice his chains large monolithic complex and yes successful companies aren't innately good a change why because they never had to be in the past in the past scale and market dominance gave you economics and reach that others couldn't rival size and footprints were part of the moat that you built around you to protect yourself from the competition companies knew what their assets were and what their competitive advantage was and the best ones of course did realize that they couldn't let the grass grow underneath their feet but they never imagined that they would find themselves in the equivalent of digital quicksand but as you all know that's exactly what has happened over the past decade the game has changed and moreover the speed at which the game is played has really changed what makes things different this time around is that you have two forces at play at once digital disruption and demographic changes one is compounding and amplifying the effect of the other resulting in change that's happening at an unprecedented speed and an unprecedented scale this time around it's not just that customer expectations have changed it's that fundamental human expectations have been changed large companies are being forced to respond and that's when they realize the inertia of their incumbency and nurture comes in many forms and may include things like multi year product cycles in a world that demands immediacy a business model centered on ownership in a world that's increasingly valuing access a small number of well-defined partnerships in a world that's increasingly realizing value across a large ecosystem with a large number of players thick and conformist cultures rigid hierarchies industrial Europe era policies these are all forms of inertia the inertia of incumbency is driven as much by sunk costs as it is by sunk decisions and the first step in overcoming it therefore is having the humility to realize the dilemma that it presents the incumbents dilemma arises when the things that made you successful in the past not only won't help you succeed in the future but may actually cause you to lose it's when all of the things that you consider to be assets like a strong hierarchical culture are now anchors on the path to innovation it's a bitter pill for a lot of organizations to swallow but if they don't they run the risk of going from good to gone instead of from good to great as an operator I realized that our struggle against disruptive startups wasn't that they had low barriers to entry it was that we had really high barriers to exit it was super hard to change the way things had always been done especially when those products those policies those practices those processes were what made you successful really successful in the past one of the most potent forms of inertia is mindset after all how you think determines what you'll do I came to conclude that innovation is actually a mindset it's not a job it's not a department and let me share just a little story about the day that that this realization dawned on me I was attending a digital advisory board meeting at a well-known Silicon Valley enterprise software company and I happen to be sitting beside the head of IT and another well-known Silicon Valley startup let's call them a disruptor in the transportation space you can figure it out I'm pretty sure now we got chatting and he started telling me about the quest that he was on to become a fully digital company he said the thing I don't guess is that we're a digital native right so we don't take cash payments we don't have humans Manning our call centers and yet we still use paper and to him this was incomprehensible now bear in mind I was working for an old bank at the time where we were still faxing paper back and forth between our branches and our home office so a world without paper was a mind-blowing concept in my eyes and I was curious I asked him how are you how are you going about doing that his answer which really appealed to me as a physicist was friction throw some sand in the gears so he went on to tell me that he started out on his quest to become a paperless company by only putting one printer on every floor pretty radical he then said that what he did was he move the printer to the forest part of the floor away from as many people as possible meaning that if somebody did want to get a printer they had to walk across the office floor pick up their paper and then do this walk of shame back to their desk with their paper under their arm now I'm thinking if I tried to attempt something like that in my company I would have a riot on my hands and I asked him how did how did he get away with it what was the reaction he said you know I thought I thought it would be a similar reaction but he said here's the thing who really wants to be the person to stand up nowadays and defend the use of more paper plus he said I banked on the fact that I think people are inherently lazy they will get used to reading things online if it means they don't have to get up and and walk across the floor just to get a printer the more I thought about this idea of friction the more it made sense amazon after all have mastered the frictionless experience with one-click purchasing but when you think about it they introduced a lot more friction into the process of returning something in comparison so going back to my friend I kind of said this I said look I always thought about digital as being about reducing friction and he said yes it is in certain cases you introduce friction in certain cases you eliminate it so using his paper example he went on to say that he had put iPad stands at every seat in each of their main conference rooms thus making paperless meetings very frictionless for people and very quickly became the norm so that's the first theme understand the inertia of incumbency and then reframe your thinking to include friction as a design principle and an antidote to inertia on your path to digital so moving on to the second theme which centers around processes often as technology leaders we can get a little too fixated on the technology piece of the puzzle and where as technologies of course complex and difficult sometimes it turns out to be actually the more easier part of a digital transformation in large organizations processes build up like scar tissue often around a place where someone has made a mistake and therefore they are very hard to break and the process piece of your digital transformation then becomes a more important part of your agenda looking back I took two major lessons away when it came to processes firstly I learned how important it is to think to separate the process from the outcome and secondly I learned to watch for small indicators of far bigger process problems taking the first of those this is one of my all-time favorite wisdom cards just because you drove home drunk and didn't get in an accident doesn't mean that you made a good decision nor does it imply that the way you got home was optimal or that you might get the same good outcome next time around so how does that translate to transformation and innovation in the companies where I worked we would gather innovative ideas from all of our employees and as head of innovation I was fixated on how many of them went into the top of the funnel versus how many of them came out the bottom end and ultimately went into production but therein lay my mistake instead of focusing so much on the outcome I would have been far better off examining each stage of the process ensuring that we had the optimal conditions to deliver the highest likelihood of success in a repeatable and sustained fashion put another way focus on the quality of your processes that you have in place for driving transformation and less so on the outcomes because they will take care of themselves if the processes are right so think about it what is your process for recruiting the team that's going to help you drive innovation what is your process for funding projects what is your process for assessing projects what is your process for empowering teams on the front end what is your process for selecting partners to connect and collaborate with how often do you think about these processes as opposed to just the outcome you're trying to derive and how consistent are these processes across all parts of your organization sustained and successful transformation initiatives need to be pursued in an environment where every part of every process in the company is optimized around making them work moving on to my second learning about processes look for the Canaries in the coal mine what are the indicators of broken or bad processes in your organization let me share a story about how I discovered ours so back when I was working in one of these banks we had a technology investment committee where teams would come in and pitch for funding for their respective projects so one day the operations team which also reported to me came in and asked for $50,000 to make changes to forms now you may say $50,000 that's a drop of in the ocean but I was still as curious I said forms which forms what changes to which forms who decided that we needed to make these changes and they explained well some of them are regulatory changes that we have to comply with and some are request from the field but by and large we've been asking for 50 75 thousand a hundred thousand dollars every quarter to make changes to forms so I asked well how long has this been going on for I got crickets and then eventually this lady piped up and said well look I've been working at the bank for 27 years I've been in this group for 15 years and as long as I can remember we've been making two changes consistent forms changes two forms consistently over that period of time now I'm sitting there I'm kind of doing the math on my head and I'm going huh well that's like just three million bucks we've spent making changes to forms without anybody giving it a second thought and again I know that three million bucks may not sound like a lot in your budgets but bear in mind this was right after the financial crisis there wasn't a single extra discretionary dollar to be found to spend on technology every single decision really really mattered so I turned back to the team and I said look I'm curious just how many forms do we have around here anyway do we have like a forms are like who wakes up every day and thinks about forms and how we use them to run our business so after a couple weeks I got my answer we had 1275 forms in our business we use on an ongoing basis now imagine that's 1,200 forms that were being filled out just to get things done and to me that seemed like an outrageously large number because I was thinking about a client service associate we call them CSAs in one of our branches how was she ever supposed to know each of those like 1,200 forms in order to get work done so he's decided to dig a little deeper and forms as it turned out were the hot door-handle that warned us that our house was on fire so we put a cross-disciplinary team together locked them in a room for six weeks fed them pizza under the door and we asked them to work through each of these 1,200 forms after the six weeks they had reduced them to 375 percent of our forms were eliminated in six weeks why because a lot of them were old versions of forms things that should have never been out there in the first place others of them were really duplicate of right there would be three pages long of a form but differ only by one or two fields from another form that was out there and of course as you can imagine if a CSA happened to fill out an old version of a form or the wrong version of a form and submitted that to the back office it would get rejected and the process would kick off again forms were our proverbial Canaries in our very inefficient coal mine and they were indicative of where we had bad and broken processes which turned out then to be the source of hidden factories of rework and shadow functions that had sprung up everywhere to deal with them and ours and errors of rework that was costing us multiples of $50,000 every quarter to fix orders of magnitude more in fact so we embarked on the second phase of the project where we looked at how we might digitize these processes and the need for the forum in the first place if we could or at a minimum automate some of the processes so that we could make life easier for the CSA's so what we did was we put every form that we could into a digital workflow where we could we pre-populated them with data to reduce the data entry time on the part of the CSA and we introduced East signatures to make things more convenient for them and for our clients so the moral of the story here is that processes really matter it also thought me that you don't necessarily have to launch this big top-down process reengineering initiative in order to start tackling the problem instead look for the Canaries in your coal mine and remember that at the end of the day it's optimal processes that will ultimately lead you to optimal outcomes and now on to my last theme perhaps the hardest lesson I learned but unquestionably the most critical I know that nobody in this room this morning needs to be convinced of how important it is to have real cognitive diversity on your team with the pace of change being what it is organizations simply don't stand a chance in dealing with disruption if they do not have the range of skills and experiences and perspectives around the table as a board director my job is to protect the long-term interests of shareholders and that is why I am such a vocal advocate for diversity and inclusion you see it's not I don't see diversity as a nice thing to do I don't even see it as the right thing to do I must don't you advocate for diversity because in an era of rapid change it is the only way you survive for any organization in any industry in any country you have to have cognitive diversity in order to tackle the unpredictable unpredictability and uncertainty of today's changing world but after years of working and speaking about this topic I've reached one vital conclusion which is this as much as diversity and inclusion are necessary for survival they unfortunately are far from sufficient the holy grail in all of this is belonging think of it this way diversity is a fact the numbers are what the numbers are for you inclusion is a choice you choose whether you're going to include somebody or not but belonging is a feeling and therefore it Trump's D&I every single day of the week the reason it's so powerful is because it's a fundamental human and psychological need we are all wired to belong it's something every one of us can relate to it's a word that transcends all cultures every one of you today sitting here can think of a moment in your life when you felt you didn't belong when you think back to that moment you can actually be teleported back to that that feeling in the pit of your stomach it's a time when you wanted in you wanted to fit in you wanted to belong and it didn't happen and it hurts maybe you were bullied as a child maybe you were the last one to be picked for the sports team maybe you weren't seen as one of the cool kids maybe you're gay and struggled to come out maybe you were embarrassed by the circumstances in which you grew up or your parents maybe you felt it when you went away to college or when you move to a new country maybe at work you feel it's easier to just change your name or change your accents or not talk about your sexual orientation or your religious beliefs ironically the opposite of belonging is fitting in whenever you have to check a big part of your life or your story or your personality at the door just to make a living that hurts it's exhausting you lose your mojo and you don't flourish I always described it as a feeling of being smothered from the inside out in my mind belonging at work is when there's no Delta between your home self and your work self when you can be your full authentic self at work every day it's when you do you feel truly valued for everything that you are and when everything that you are is seen as an ASUS that is when you are at your best and that is when your company will get your best no matter what people will try to conform to the dominant culture in an organization and if they don't feel they belong they cover or mask a study by Deloitte of 3,000 people found that 61 percent of us cover at work on at least one dimension if you're gay or an ethnic minority that percentage goes way higher when you think about it how can we as leaders expect to get the best out of our people when they're only bringing a fraction of themselves to work every day how can we harness their creativity when they're burning up so much energy just trying to fit in how can anybody how can we expect anybody to stick their neck out and really share a radical innovative idea or more importantly perhaps a really controversial idea if they don't feel they belong when your team members feel unsure they self-censor they give only a fraction of their mind or their energy or themselves to the job when you're trying to drive change and transformation having employees who don't feel they belong is pure kryptonite you simply will not get out of the gate think of the downsides of having people sitting there who have great ideas or have a great question they want to ask but they're afraid to voice them for fear of being judged or criticized or embarrassed what a waste of talent and potential even worse is when your employees are too afraid to say what they what they think so they just actually say what they think management wants to hear have any of you seen that happen I know I have and taken to extremes that phenomenon can be really really detrimental quick story the 2003 space shuttle Columbia disaster I don't know if if you remember it at the with that particular disaster the engineers at NASA knew that there was likely going to be an issue with foam strikes when the shuttle re-entered the Earth's atmosphere and in a critical meeting where the top brass were there the top management team they felt that differences between their statuses and who really belongs in that meeting precluded them from speaking up it's a story with the tragic ending a failed mission but moreover the loss of eight lives the after accident report which I've I've read was damning around the whole idea of culture and belonging it said and I quote cultural traits and organizational practices detrimental to safety were allowed to develop and that organizational barriers prevented effective communication of critical information I know some of you work in industries that directly affect people's lives so how much thought have you given to whether anyone is sitting in any of your meetings doing a risk calculation in their head as to whether or not they should say what they think they want to say if they're sitting there tallying up whether they should share their brilliant or contrarian idea you are not on the right Road after purposefully going to the effort of recruiting a diverse team with differing views and perspectives what a shame for it all to go to waste just because people don't feel they belong belonging has the power to liberate ideas think of it as if diversity is a seed and inclusion is a crop belonging is how you harvest them belonging is the gateway through which your employees have to pass in order to bring 100 percent percent of themselves to their jobs opening that gateway unleashes their creativity and tells them it's safe to take risks here it's safe to be who you are and as you know that's a prerequisite if you're really trying to drive innovation and change and different kind of thinking belonging leads to better communication and collaboration because you're not sitting there worried about picking and choosing your words so you can actually focus on the team's goal and you feel confident that you could have direct and yeah even you know confrontational conversations belonging enhances learning opportunities for everyone because people aren't afraid to talk about their mistakes so that everybody on the team can learn from them I look back now and I realize just how more effective I would have been as a change leader if I'd understood the power of belonging and it's not a hard thing to do on like a big DNI strategy that's driven from the top down anybody on your team no matter how junior can help to make other people feel they belong it starts with you as a leader tell your story of origin tell your team who you really are don't be afraid to reveal your vulnerabilities talk about your mistakes display an openness to hear ideas no matter where they come from display curiosity and an insatiable desire to learn because that will encourage it in all of your people belonging happen in the small moments of everyday that leave people feeling yes I am valued by my boss and yes somebody at work here cares about me so if you really want your digital transformation not to fail them by all means surround yourself with the best and most diverse team you can but don't stop there work hard to make your team a place where people genuinely feel they belong if you do you will have their unwavering loyalty and they will be all in on the transformation journey you're trying to take them on and that immensely stacks the deck in your favor in terms of your prospects for success so to conclude if I were to leave you with one word a one concept that runs through each of my three teen themes its mindset without the right mindset around inertia around processes around belonging you may are you may be destined to fail but with the right mindset anything is possible you all know that the answers to your problems are not going to be found within the four walls of your organization which is why coming to events like this is super important because you get to see what others are doing you get to learn from other industries you get to learn from other companies it challenges your own thinking it challenges your own mindset I joined the board of thought works for two reasons beyond the fact that it's just an amazing company I joined because they truly bring cutting-edge thinking and thought leadership to the table and I don't know about you but when I was in a change leadership seat I desperately wanted somebody to walk into my office with something different than what all the other shops were saying with differentiated thought leadership and that's what thought works bring they challenge my mindset in every encounter the second reason I joined is because this is Anna is a company whom nobody can touch when it comes to diversity inclusion and belonging it is genuinely core to the thought works DNA you see it visibly palpably in every office that we go to for our board meetings all around the world and it's one perhaps the most important reason why I'm proud to be on the board and proud to be part of the thought works family we consider all of you to be part of our family as well thought works expertise along with your leadership are like strands of a rope stronger when woven together so on behalf of us all as thought works we thank you for being here and I thank you for spending at least one of your 168 hours this week with me thank you all very much enjoy the rest of the day I look forward to chatting [Music]

Channel: Thoughtworks

Views: 5,737

Rating: 4.878788 out of 5

Keywords: Thoughtworks, Technology, Business, IT, Consulting, Programming

Id: kjVPFxtBCdc

Length: 36min 35sec (2195 seconds)

Published: Tue Nov 19 2019