Davos 2016 - developing the corporate values for the digital future
- The digital transformation panel at Davos is the second most-oversubscribed of the annual gathering, with panelists advising on the importance of culture change, communication and trust.
It says a lot that a panel discussion on digital transformation is the second-most oversubscribed session at this year's World Economic Forum in Davos. (Only Kevin Spacey is a bigger draw it seems!)
The session set out to look at the topic from a number of perspectives including the cultural change requirements and need for speeed. In fact, the one thing that no-one on the panel really wanted to talk about was technology.
Or as HP Enterprise CEO Meg Whitman put it:
Technology is actually the easy part. Getting the organization to move to adopt the new technology and the new business models is in many ways the toughest component.
We have had experience internally at HP where if we don’t manage the process of change as effectively as we manage the technology change, then the projects are not as successful as they otherwise might be.
Everyone wants to blame the technologists, but often it is the culture change that hasn't had the right attention paid to it.
It’s essential to pay close attention to internal communication she stated, citing her experience running for Governor of California:
Often I feel like I’m giving a stump speech at HP. We say the same thing over and over and over again. You’d be surprised, after you’ve said it 57 times, that people say, 'I never knew you thought that'.
When you are communicating with large groups of people, it is not about the facts and the figures, it is the stories that you tell. No-one remembers the facts and the figures; they remember the stories that you tell. That’s part of the way we’re driving culture change.
But the importance of this internal communication can easily be overlooked in the drive towards digital transformation, observed Bernard Tyson, CEO of healthcare provider Kaiser Permanente:
I’m heavy on the technology. I fully embrace it, building a whole digital platform. I’m into it. What I’m hearing back from the organization is, ‘What you’ve excluded from that is our role in that and our role in the future of the organization’.
It was an ‘aha’ moment for me because I just assumed that everyone would know that we still need people to take care of people. I’ve discovered that what people are starting to look at is. 'Is this replacing all of us in theory, or is it in fact this is enabling us to be more effective in taking care of millions of people?'.
This can be a learning process at the very top of the organization, he added:
One of things I’m finding out as CEO is that the cultural change is about me also. A leader without a follower is just a person taking a walk. So I want to make sure that there are people with me on this journey. That means I need to tap into the value-system and find out how to engage with them in the change process.
The physician culture, the nurse culture is that they are there to take care of the patient. It’s very important to me that as we make the technology and the cultural changes that we keep that centrepiece there. So their voice is very important to the credibility of what we come up with to maintain or enhance the trusting relationship that we want to have with almost 11 million people. Ours is not a transactional business. It is a business of relationships and built on trust.
That’s music to the ears of Salesforce CEO Marc Benioff who’s been a long-standing advocate of the important of trust in the digital economy:
The Fourth Industrial Revolution starts with one very important point and that is trust. You’re about to define a new level of trust between yourself and your employees, between yourself and your customers, between yourself and your key stakeholders, between yourself and your partners. This is a cultural revolution for organisations that are not built on trust. When we talk about trust and growth and innovation, we have to talk about them in that order.
The opportunity for all of us is to get to the future first. But when you get there, make sure you show up with the right values, because the values of the Fourth Industrial Revolution are different to the values of the third. We all know that. That’s the transformation that we’re all going to make together.
Benioff cited the early days of Salesforce as a case in point to demonstrate the changing values across industry:
When we first had a reliability crisis at Salesforce, I didn’t know what to do. I was kind of acting as I was when I was at Oracle, which was you don’t say anything and we’ll get through this. We had to move to a transparency culture. We built trust through transparency. We put up a web page - trust.salesforce.com - where we would disclose everything. We had to have our customers and our partners root for our success and be part of our team. That was very different.
For companies with long-standing histories, creating the correct culture can be more difficult, as Klaus Kleinfeld, CEO of metal manufacturer Alcoa, pointed out:
The challenge for a company that is big and has a huge tradition is, how do you make sure that everybody feels that there is a real revolution going on? The way I talk about it is to encourage people to have this gene of constructive destruction.
You put everything to question. Which brings us back to the question of how you get your team to do this? The biggest limiting factor today isn’t the technology; it’s the humans inside an organization that’s not used to questions.
The heritage factor was also present at Hewlett Packard, recalled Whitman:
Most great historic companies have real DNA that they can build from. I believe that 'founder DNA' is very hard to kill. In most cases that’s a really good thing. Bill Hewlett and Dave Packard have been gone from the company for 30 years, but when I came to the company, I could feel the DNA, I could see it, I could smell it. And I said, ‘Let’s do more of what we do well, then make the to-do list’, as opposed to, ‘Let’s find all the things that are wrong’.
But the past can’t be allowed to slow down the journey to the future, she added:
It’s Darwinism. We all have a responsibility to keep our companies relevant and reinvent. If you don’t reinvent, you’ll be eclipsed.
And with that in mind, the question becomes: how fast can that journey be made?
In the second part of this article, the need for speed tops the agenda.
Disclosure - at time of writing, Salesforce is a premier partner of diginomica.