Risk aversion, weak customer focus, and siloed mind-sets have long bedeviled organizations. In a digital world, solving these cultural problems is no longer optional.
In a survey of over 2000 people, the number one answer to the question “Which are the most significant challenges to meeting digital priorities?” was “Cultural and behavioral challenges”. Imagine that. Or just look around. You see this all over the place. I was looking through a catalogue I had received in the mail, recently, and actually discovered something that I wanted to buy. I went to the website of the company and … no way to order it. What I needed to do was fill out the paper form included with the catalogue and then either mail it to the company or fax it to them. Yes, mail or fax. No digital input mechanism. Ouch.
I was looking at plastic packaging for my daughter and her artwork that she sells and found exactly what she wanted. But what I needed to do was call them in order to get the order done. I could fill out the form online and even submit it online, but because I’m Canadian, I needed to fax them a copy of my drivers license and a photocopy of the front of the credit card used in the transaction. This was for “my protection“.
I was on a website recently that asked me to fill out a bunch of information, including the reason for the inquiry and a credit card. Everything was submitted properly, I think, but there was no email notification of any sort until the following day. Oh, wait, that was a GoA website.
The ability to change, to morph, to become something other than what you have always been, involves a cultural shift. A risk. A calculated risk. The McKinsey article states:
Leaders hoping to strike the right balance have two critical priorities that are mutually reinforcing at a time when fast-follower strategies have become less safe. One is to embed a mind-set of risk taking and innovation through all ranks of the enterprise. The second is for executives themselves to act boldly once they have decided on a specific digital play-which may well require changing mind-sets about risk, and inspiring key executives and boards to think more like venture capitalists.
But when talking about an appetite for risk, the authors of the article state some heretical advice:
Building a culture where people feel comfortable trying things that might fail starts with senior leaders’ attitudes and role modeling. They must break the status quo of hierarchical decision making, overcome a focus on optimizing rather than innovating, and celebrate learning from failure. It helps considerably when executives make it clear through actions that they trust the front lines to make meaningful decisions.
Have you seen an example of hierarchical decision making in the government? No, perhaps that’s the wrong question. Have you seen an example of non-hierarchical decision making? I took a look at a “governance” model recently that had five levels of decision making in it. But those five levels missed out on at least one more level, more likely two or three. In order to get something approved you theoretically needed six or more hierarchical approvals. That is not a model for calculated risk or an appetite for risk, it is a model of fear. A model whereby the fear of making the wrong decision is forcing the decision making ever higher into the hierarchical chain.
Does it show that the executives trust the front lines to make meaningful decisions? No, it doesn’t. Does it demonstrate a mindset of risk-taking and innovation? No, it doesn’t. Does it show a desire to meet the needs of the customer? Only if the customer is young enough to survive while the decision-making process trudges along in government’s glacial pace.
There are spots within the government where rapid decision making, pushing down the chain the ability and responsibility to make decisions and where risk-taking is acknowledged and condoned. But pockets are not enough, it needs to be part of the cultural fabric.
Cultural changes within corporate institutions will always be slower and more complex than the technological changes that necessitate them. That makes it even more critical for executives to take a proactive stance on culture. Leaders won’t achieve the speed and agility they need unless they build organizational cultures that perform well across functions and business units, embrace risk, and focus obsessively on customers