Conditions for Transformation
Culture. In many organizations I’ve advised, the focus is on creating a culture of innovation / transformation. It’s not universally the case, but often work on culture only goes surface deep. We get platitudes that are hard, if not impossible to argue with. We should be human centered. We should work differently. We should be bold and think big. Do these sound familiar? We’ve been grounded in the idea that “culture eats strategy for lunch.”
But if we double click just below the surface, we see the scaffolding that really matters: structure and incentives. And my question is always: do these align with the culture of transformation we hope to achieve? Think about it. In most organizations, incentives are based on hierarchy, title, position. That’s structure. These structures can incentivize maintaining the status quo, focusing on low hanging fruit, and worse yet, squashing ideas that seem crazy (but which actually could be an idea that leads to transformation). It turns out, structure eats culture for lunch.
Do we allow for and reward big risk? Do we incentivize teams to do big things? Do we put in place the organizational mechanisms that allow people to leave their day jobs for long periods of time (like months or years) to focus on big, complex problems? Do we have systems to repatriate them when a fit for purpose team fulfills their purpose? Do we reward and celebrate killing ideas (in the form of unscalable pilots or initiatives) so we can focus?
How short term is our thinking relative to incentives? Sometimes our best intentions run counter to the goals we have in mind. Imagine this hypothetical. An organization has a pension plan that allows recently retired senior leaders to cash out a lump sum payment when they leave the organization. Do you think this incentivizes the kind of big thinking transformational moves that take years to design and execute? The unintended consequence here is that in the later stages of a career, incentives in my hypothetical may align more with short term gains, rather than the longer-term big moves that will position an organization for the next decade versus the next year.
I want you to think of some of your goals or KPI’s for the year. How big are they? And do they reward taking risk? Here are some of mine: solve for food insecurity; solve for childhood trauma; solve for behavior change using mass customization. Ridiculous right? I’m quite sure these will be my goals for several years to come.
The pressure to get a big idea right out of the gate is immense and real. It’s also misplaced. That isn’t to say that in a creative process we don’t need deadlines and the pressure of time – milestone deadlines force us to move from thoughts and ideas to some form of action. But we shouldn’t mistake incomplete ideas for bad ones.
The early technologies underpinning radar were actually discovered in the 1920’s by two navy engineers while testing the sending and receiving of radio waves across the Potomac. These engineers discovered “interference” as ships passed through and broke the signal between transmitter and receiver. They realized that such technology would allow the US military to “see at night”. But, when they shared their discovery with superiors in the department of the Navy, they were told the idea wouldn’t scale, there were too many technical challenges and so forth. So, the technology set dormant in the US and it wasn’t until many years into World War 2 – following our German and British counterparts – that radar was actually deployed as a way to identify U-Boats, a key factor in helping the Allies to win the Atlantic and thus the war.
The technology that enabled digital image capture was one of the forces that put Eastman Kodak out of business. Believe it or not, that technology was invented there. The developer, Steven Sasson, was told by leadership “That’s cute. Don’t show anyone.” At the time, film and paper processing was a cash cow for Kodak. The company was in a constant struggle between the transition to a digital future and not wanting to undercut their primary source of margin. Does that sound familiar?
Besides financial incentives that work at cross purposes to transformation, structure again comes into play here as a potentially significant disincentive. In highly political organizations, where nascent emerging ideas aren’t protected, it’s easy for anyone looking to climb the corporate ladder to kill an idea…to suggest that the idea is no good can be a form of political capital. New and incomplete ideas are easy to argue against and find flaws in. But that doesn’t mean they’re bad or don’t have the potential to transform if incubated and deployed correctly.
So, our goal as leaders of significant transformational efforts is to protect the ugly babies by giving them enough runway to grow and develop and mature – just enough until we can see if they’re truly ugly or if they might just be the next big thing.
