Adapting an Organisation for Growth and Innovation

The skills and structure that got you to one stage, won't take you to the next stage. Going from 0-1 and 1-10 requires recognising biases and empowering new leaders to drive the next stage of growth.

The Path to Failure is well worn - Doing the same thing, expecting new results. 😩

Companies who want to become digital, enter new markets, build new products will often fail because they hire and empower the same skills that got them to where they are now.

Vision for new product

The leaders that got you 'here' have a skillset and perspective that influences their decision-making. This is an implicit and often overlooked form of bias, disguised as a strength. So they hire for what they know as it seems safe. To the point that wrongly empowered people will hire ex-colleagues which leads to repeated cycle of waste.

They don't realise that these internal biases will not take you to the next stage. It will an all likelihood lead to limited transformational change, failed innovation programs, and poor return on investment.

Delivered product

Examples of these types of failures:

1 - Digital Transformation without Digital Leaders

Empowering project managers incentivised to own and deliver milestones without digital backgrounds leads to not being able to envisage your future state because you lack an understanding of the power of digital.

Instead hire Digital Product Managers who understand how to innovate with new technologies, see through a customer lens, accelerate ways of working, create nimbler cross-functional teams, and org structures with fast-decision processes.

IKEA did this well by hiring a Product Leader from Google who started by updating navigation, search, site hierarchy and cross-region consistency. This proved several use-cases for digital investment by addressing low-hanging fruit and generating ROI for the business.

2 - Market Entry with Delivery Product Managers

Feature delivery PMs or order-takers do not necessarily understand market entry and GTM strategy. Often PMs are hired as delivery leaders who drive project plans to deliver features instead of understanding and validating customer needs in new markets. When this happens, market entry efforts get derailed and fail.

When they cannot make the switch to thinking through GTM and Channels strategy, market-entry will fail. This skills to drive demand, sales, and revenue in new markets are like a startup where many core business model assumptions need to be re-validated.

These include questions of what segment, persona, firmographics, local competitive, compliance and regulatory environment, religious and cultural customs, budget ownership and decision processes that define the ICP. From there crafting the value proposition is important to align to the needs of that particular buyer.

Introducing a product to new markets requires rethinking messaging, product design language, advertising campaign strategies and KOL influencing strategies to acquire customers.

One may refer to blunders by Nike, Givenchy or Vuitton in China here. Even when cultures are fairly similar, assuming one product works in one country may not work in another. Take the example of Starbucks failing in the Australian market where local coffee culture is extremely popular.

Therefore companies need to hire outbound Product Managers, or ex-Founders, who have tried to take a product from 0-1, who tried to sell new products and can iterate on market feedback, who understand value proposition and pricing levers, who speak the lingo of the market and understand the buyer-persona in that market to craft a product that generates demand.

3 - Innovating by Copying Competitors, Not Disrupting Yourself, or Not Experimenting

Incentivising revenue-generating projects, copying competitors or not having experimentation and evidence to guide strategy leads to failed innovation attempts. Take Google+ for example that tried to recreate Facebook.

Instead create skunk-works with nimble stage-gate processes that are market/customer-led, validate ideas by being embedded with customers not sitting behind email / sales / support teams. Leverage idea inboxes, incubators, and startup ecosystem development to generate an idea pipeline.

Most importantly create a safe environment to fail with executive endorsement for employees to test new things. Free up time for experimentation by creating milestones to validate an idea works even if it means stepping outside an employee's ‘job description’.

4 - Going from Services to SaaS

Continuing to prioritise sales-driven feature requests over a consolidated segment based product strategy leads to building customer specific solutions that do not scale. When revenue generation from Services is rewarded vs repeatable Product revenue, it never truly becomes a scalable SaaS solution.

Companies even claim to be SaaS when they are actually only deploying to cloud. Simply using marketing buzzwords, but not changing their business model, pricing and revenue management practices.

Instead, restructure and hire Product Managers who understand SaaS business models, product strategy and marketing, and the GTM motions required to scale SaaS revenue.

The result of these failures are half-hearted attempts to change, low return on investment and an executive team that shell-shocked and risk-averse to try anything new. The status quo remains and the “organism” pushes out anything that looks threatening from the outside. Something like frankenstein products remain that are never truly executed and completed to excellence.

Frankenstein of the underlying organisation, products and technology

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How to successfully transform, innovate and grow?

Identifying biases to drive this change internally is really tough. Here are some strategies to help go from internal discovery through to driving business outcomes.

1. Learn who was successful in a similar strategic initiatives to benchmark operating models and skills.

1. Benchmark the operating models, roles and titles, skills, incentives, and GTM motions of exemplary companies. It is not about the technology or product, that comes later as an outcome.

2. Use product innovation and experience as a guide to discover leaders selected domains. They may not be in your industry, that doesn’t matter.

   Say you are in industrial parts, and you see a supply-chain or FMCG company that has innovated, they may have relied on a similar path of learning through failure, before bringing in the right leaders, skills and mindsets to drive their strategy forward.

2. Discover your own organisational strengths and biases.

1. Evaluate your competencies, structure, risk profile and decision criteria in relation to the benchmarks and external role models. Dive within to your organisation to understand the history of similar innovative or transformational projects.

2. Conduct a post-mortem by interviewing key personnel to identify what characteristics led to the outcome, both for failed projects and successful ones. This will help identify the causal relationships and biases that led to the outcome. This includes decision processes, skills, incentives and structures.

Understanding your own biases and gaps is crucial, similar to diagnosing symptoms in a patient before the right treatment can be prescribed.

3. Get executive endorsement to address skill gaps with the right leadership hires.

By this stage you have a picture of what worked externally and the biases of the company. This should provide some clarity in identifying the knowledge gaps and structure that would support successful initiatives.

1. As a next step, it is important to prepare the organisation for change and get endorsement to hire new skills. This process is generally run by executive leadership, hence their involvement is crucial to bring in new job roles and structures.

2. With endorsement, create new role profiles and hiring criteria to bring in the right talent, ensuring they have been vet by an objective process designed to meet the new skill categories and mindset shifts required.

3. These new skills, role profiles and structures should be more widely shared for input and to gain support from cross-functional leaders, even when this leader does not report to them. This is critical for the future success of these incoming individuals and their teams.

4. Create advisory board to navigate the path ahead.

Using the industry research, identify key external leaders in the new skill categories who can influence the leadership team. The advisory board can work closely with leadership to evaluate structuring, hiring and investment decisions.

This independent external committee is important for two reasons:

• Objectivity: They are not on the internal payroll and do not need to agree to current management thinking for fear of repercussion. Therefore they can remain objective and share their opinion.

• Reference Decisions: They are domain specialists with external experience who can identify patterns and decisions that have been successful elsewhere, thus hastening the process to guide delicate trade-offs.

In case there are sensitive matters to deal with, the advisory board can be managed through an anonymous proxy.

5. Update JDs and define hiring criteria to source the right talent

1. Once skills and structure are reasonably well understood, this is a good time to create roles with updated job descriptions that aim to encompass what is required by the organisation. Recruiters themselves need to be briefed on the type of candidates to select to prevent excluding the right hires, as these candidates may be against the norm for the organisation.

2. Many executives are not as deeply involved in shaping this role, adapting the responsibilities and meeting candidates to transparently share the organisational strategic needs. The job description should not be prescriptive about day-to-day tasks, but should share the organisational context, business objectives, set of similar experiences, influencing capability and core principles that the candidate should bring.

3. The role itself should have sufficient ownership, control and budgets in place to develop teams and strategy in line with the candidate’s suggestions. This is crucial to enable the investment in a new capability to succeed. It costs the organisation more than one FTE salary when this goes wrong.

4. The hiring process should seek to be adaptive to incorporate suggestions from candidate, working as a learning process. Say the first 5 candidates all suggest budgets for investment in the program, team skills, technology stacks, and market salaries for the role, let it be a guide as to the executive team on assessing their budget and strategy.

A key attribute in larger organisations for transformative leaders is to have experience in driving change and influencing cross-functional stakeholders. Driving change is much harder than initially conceived, as there is an organisational cultural barrier and natural reflex to reject ‘foreign ideas’.

Executive endorsement is a determining factor for all change to be successful. However, new leaders who have never ‘fought the resistance to change’ elsewhere may not understand what they are up against if they have never done it before.

6. Setup ‘Governance-Lite’ with measurable business objective

1. With these steps in place, the next is to identify a range of test use-cases where a new teams can develop POCs and garner insights to influence further internal adoption.

2. This should be bounded within a governance process that includes executives that provide input to the organisational context and goals, and guide the leaders on how to move to the next stages of delivery. Often new initiatives will fail, but the learning will be crucial for the Governance Committee to adapt the initiative based on evidence gathered to steer it in the right direction. Rationalising the approach and working in partnership as a team will be crucial at this stage, as the combined efforts of executives as well as sharing depth of cross-functional perspectives will be required to drive changes.

   Governance should be carefully developed not to be burdensome, but to be a mechanism for learning and rapid adaptation. The governance committee helps to create an inclusive environment for leaders involved.

3. Learnings should be shared widely to help bring 2nd-3rd line managers and key staff up-to-speed. They will need to know the context of decisions so they can also provide input to objectives at their level and ensure alignment to overall vision. Designing key communication mechanism and lines is important to avoid mixed messages, duplication and redundant efforts.

   Regular Town-Halls or BrownBag meetings on topics are helpful, however, many people are afraid to ask hard, counter-intuiative or challenging questions in these forums. For this reason a shared webform or similar anonymous poll should be used to gather input and questions.

7. Scaling and Embedding

Finally the exercises of designing new capabilities, products and strategies is not complete without scaling the capability, and embedding it in the organisation.

Each organisation will consider how widely this needs to occur based on a range of factors. Some capabilities are core for the entire organisation to adopt, while others will remain isolated to a new business unit.

A similar process of evaluating the right skills and roles for scaling, re-training and redesigning processes is required. Naturally the initial leader who drove the change may be better suited to other strategic priorities that require innovation and creativity over designing change, communication and training programs that tend to require more repetition muscle.

Final innovative product after organisational change and adaptation

I hope this article shares some perspective on why change is hard, why it fails and what to do about driving new initiatives.

Wishing you the best on your future endeavours!

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