The world of business is changing — in favour of the customer. No industry is immune to the massive challenges and opportunities that disruptive technologies and
digital business models are enabling. But what if it’s not what you know, but what you're willing to unlearn, that holds the key to your organisation successfully adapting to changing market requirements?

Working with our customers navigating the maelstrom of digital transformation, they recognise that technology is in some ways the least of their problems.

In creating the necessary context for their digital transformation journey to succeed, I see 3 critical capabilities leaders need to address:

3 critical capabilities leaders need to address

  1. How to address the pace and depth of change demanded by customers as an organisation and as a leader;
  2. How to harness corporate culture as the key to driving innovation and growth and if that’s a realistic goal; and
  3. How to manage complex networks of people, collaborating virtually, to deliver optimal value for customers.

Shift perspective and anything is possible

We’ve seen market after market attacked by digital upstarts. I can think of lots of things that are gone in my life — like my old Nokia phone. I don't stay in hotels so often anymore, because we prefer to stay at an Airbnb property. In fact, my wife and I have hosted more than 30 guests at our home in Bondi over the last couple of years, welcoming them as friends since buying into the true hospitality idea of Airbnb. Print and television advertising are being butchered by Twitter, Facebook and other social media.

Not even cows are sacred in terms of what's happening. A couple of years ago now, people managed to develop a pedometer that could be fitted on cows. They detect the change in gait that occurs as cows move into oestrus, when they begin to pace furiously, and 16 hours later is the optimal moment to artificially inseminate them. All that information comes from the pedometers, up into the cloud. It's analysed using a big data platform and has enabled farmers to improve the reproductive capacity of their herds by up to 32%!

So with digital, anything is possible. Part of what's in our way is what we already know. Creating new value often comes from shifting our perspective. Having lots of different perspectives sitting around the table can be incredibly valuable, enabling leaders to focus on listening deeply for the possibilities that emerge.

Transforming our organisations means transforming our leaders

The world can certainly be a very dangerous place. But where do you think is the most dangerous place on Earth for chief executives right now?

It's the boardroom, where their average tenure in OECD countries is down to little more than four years. About the same as a politician, although sometimes in Australia they don't get that long, do they? And the reason CEOs are struggling is they're suffering from what I call the ‘jaws of death’ — the yawning gap between the pace at which they are transforming their organisation and the rate of change their customers, and increasingly employees, are demanding. This tremendous pressure is coming from outside and it's coming from within.

I want to convince leaders that this is a very personal problem. But they don't all come from that place. I see many leaders who get to the point where they basically feel they can sit on the executive shelf, above and beyond learning. They're also above and beyond the law to some degree, because according to the rules they have written, they can do no wrong.

Whereas they actually need to re-tool and re-equip and adapt themselves at a rate faster than we've ever done before – which sounds pretty tiring for some of us. To imagine that in the next 10 years, despite all the slightly crazy things I've done, I need to learn more and change more than I've done in the entire 30 years I've been in business.

Cultural change is complex but critical

In organisational cultures, what's not allowed, often by unwritten taboos and rules, is just as powerful a force in shaping behaviour as all the written rules we must follow. What happens as we try to change a culture? The entrenched mindsets, attitudes and behaviours that make up the existing culture kick back like a mule against any attempt to change it, because it has anti-bodies. Just like the blood cells in your body. Your culture has virulent anti-bodies that attack new people, new ideas, new processes and new technologies with a vengeance.

It's only through disobedience that any human progress has been made

If we're going to begin to shift those mindsets and attitudes, I think we need to take a leaf out of Oscar Wilde's book, who famously declared, “It's only through disobedience that any human progress has been made.” Recently in Hong Kong, we witnessed very courageous university students standing up to men wielding guns with just their umbrellas. They decided the price of disobedience was OK. They figured it would cost them a few uncomfortable nights outside — I don't know where they went to the toilet or what they ate. But they felt that the price of disobedience was low enough to risk protesting against China’s role in determining their new head of state.

So especially in larger organisations, I think here's a big job to do to decrease the cost of individual disobedience — because people typically think it is prohibitive — costing their beloved job, career or reputation. It’s a critical issue for us to address if we want to get innovation happening in our organisations. Innovation often arises from using our tools of trade — including technology — differently. If we're not approaching the use of those tools from a very different perspective, with a very different attitude, we're unlikely to get the innovation outcomes we're after.

Digital transformation is a team sport

Today I see a lot of ‘teamwork' that is actually self-interest masquerading as teamwork in organisational swim lanes. We don't see the kind of soccer team teamwork, the positional play where there's one goal and there's an obvious collective effort to achieve the outcome. A study recently conducted by the Corporate Executive Board Company has expanded our view of what we mean by leadership. They suggest it’s more than just managing the day-to-day stuff, what they call transactional, and the change task, what they call transformational leadership. We also have the task of managing the networks of relationships, systems and responsibilities that we need in order to create the environment in which we can execute the first two — network leadership.

In this big study covering over 175,000 executives worldwide, what portion do you think of senior leaders are good at all those three things at once? It was just 7.3%. But that doesn't mean we need to be depressed. It means we need to work with each other. There's a lot more of us that are good at two of those domains, while there are very few of us who are good at all three.

However, we tend to use a very curious tool to manage the modern organisation. If I take a General Motors organisation chart from 1921, and place it alongside one from any large organisation today, you couldn't spot the difference. Can it be possible we are using 1920's technology in 2016 to transform businesses in an environment of exponential change with new technology coming at us at a rate of knots?

What we need is a dynamic, three-dimensional, highly networked organisation. That’s what is required to pull-off the ‘heart–lung transplant while we run a marathon’ task that most large organisations are trying to achieve today. Each role takes responsibility for anything in their space, but everyone understands they're accountable for the success of the whole network.

Bottom line: the job of leaders is to create context, not just to execute transactions and manage processes and projects.

Your secret weapon

Once you have ticked off your work on leadership, culture and teamwork, you can focus on what I believe is your secret weapon: dangerously good ideas, wielded by determined, disobedient people who care deeply about their customer. They're the people you want to find, inspire and keep. Imagine who they are in your organisation.