Welcome to the new normal—a bimodal world in which organizations increasingly need to be able to adapt while operating at two speeds: growing the business and running the business.
Technology and digital disruptors are reshaping markets, upending industries and redefining customer experience and expectations. The shift to digital is driving the need to break down traditional structures, governance, budgets and projects.
As competitive pressures increase, companies need to fine-tune their strategies to adapt to a variety of conditions, just as marathon runners adjust their training methods for different courses. Those who are unable to adapt will fall by the wayside:
The Global Center for Digital Transformation predicts that 40% of today’s leading organizations will lose market share over the next five years by failing to better digitize business models, offerings and value chains.
SPEED OF INNOVATIONS VS. SPEED OF OPERATIONS
Teams need to innovate in a practical way to generate new value for their organizations, customers and networks. These “speed-of-innovation” activities are agile, transformational and frequently focused on the creation of new products and services that have the power to disrupt the market or, when delivered internally, reinvigorate your teams. Organizations can only become good at innovation if they are both committed to it and willing to progressively become more competent at it.
Often in opposition, however, are the core processes and structures required to run the business. Moving at the “speed of operations,” the keeping-the-lights-on kind of work, is often just as business-critical as the innovation driving growth.
The truth is that you need both speeds to function. Speed-of-operations work is often more measured. The approach is focused on protecting the brand and continuously delivering core capabilities and services. The teams doing speed-of-innovation work, on the other hand, argue that they too are protecting the brand, by ensuring that it continues to innovate and boost the value of the organization. Each speed serves a purpose within the organization, and balance is critical to effectively delivering business value.
There’s inherent tension, though, between the two speeds—tension that is beneath the surface in some instances and readily apparent in others. It manifests in culture clash, confusion, disruption to operations and missed handoffs. It can lead to trust issues, conflict and blame.
This trend has emerged across industries and markets, and it’s one that requires leaders to create a new model consisting of teams that have a shared responsibility to innovate across the function. The ability to operate and adapt simultaneously at two speeds is as important for IT as it is for finance or marketing, or any other function. To deliver services across the front, middle and back offices in today’s business climate requires the right culture and leaders. It also necessitates a remodeling of the organization’s operations—one that takes into account interdependencies between groups adapting at different speeds.
WHY IT’S HARD TO ADAPT AT TWO SPEEDS
There’s an often-repeated story from Sheryl Sandberg’s time at Google, when she confessed a multimillion-dollar mistake to Larry Page. His reported response surprised Sandberg: "I'm so glad you made this mistake," he said. "Because I want to run a company where we are moving too quickly and doing too much, not being too cautious and doing too little. If we don't have any of these mistakes, we're just not taking enough risk."
It turns out that that kind of a culture, which both accepts and rewards risk-taking, has a powerful effect on innovation. A 2009 study published in the Journal of Marketing found that the number one determinant of whether a team or organization was going to build a reputation for innovation was the culture that the leaders created. The survey found that innovative cultures create engagement and enthusiasm and encourage people to be independent thinkers who operate in a safe environment where they are more willing to take risks.
A culture which both accepts and rewards risk-taking has a powerful effect on innovation.
It’s hard to find leaders who can both build a culture in which employees feel comfortable risking and innovating and also keep business processes running smoothly and efficiently. They’re so used to doing the operational side really well or focusing on innovation to the exclusion of everything else.
Few leaders have the skills and temperament to do both well. The manager who is targeting incremental improvements that keep systems and processes running smoothly and efficiently may inadvertently design an organization that crushes creativity. The leader who is focused on driving innovation may overlook the systems and procedures required to support day-to-day operations.
Too often, the temptation is to bolt on a separate team charged with innovation. When this happens, the function is split into two camps: On one side, the “haves”—the people working at the speed of innovation. On the other, the “have nots”—the people working at the speed of operations. With an increasing focus on specialization, talent is scarce, yet this model requires complicated, bloated staffing structures. There are often different pay structures, incentives and benefits offered to each group, and HR is stretched beyond its capabilities as the organization adapts to new requirements. As more money and incentives flow toward the innovators, the organization risks alienating the teams who are keeping systems running smoothly. If HR itself isn’t able to run at the speed of innovation and the speed of operations to adapt to changing support needs, your systems are probably not going to be agile enough to scale.
The fact is, there’s room for innovation even within the teams focused on daily operations. Across functions, if you allow your teams to set aside time to focus on innovation, tangible business results follow. Among the companies who have reaped the benefits of this type of an approach are 3M and Google, who allow engineers to spend one-fifth of their time on a project of their choice.
IT teams in particular rely on DevOps, an approach to software development whose tenets that can be used to also effect performance improvement outside of IT. DevOps cultivates collaborative, delivery focused practices. At its essence, it’s about getting IT teams to think differently without losing touch of what makes their operations essential. Within IT, it’s an often-used model to get the organization to run both at the speed of innovation and the speed of operations, and it’s an approach many organizations can borrow from to improve performance.
WHAT WE CAN LEARN FROM DEVOPS
Bringing innovation and core operations together as an integrated team, whether cross-functionally or within a single department, requires that you take into account how an improvement in performance in one area will affect the other. It requires the ability to integrate both sides of the business and improve how work flows between them to deliver full value. Organizations can utilize a few key practices from DevOps to shift mindsets and make improvements to both core and innovative operations.
1. Break down the silos.
Cultivate collaborative and delivery-focused practices, reward outcomes rather than process and emphasize personal and team accountability. With speed-to market a critical factor, focus on reducing cycle times for feedback and deliverables. As appropriate, invest in automation to build, test, release and deploy software that powers innovative and core business processes alike.
2. Measure, analyze and feed data back to delivery teams.
Define what the organization wants to improve, taking into account the organization’s current level of maturity. Consider interdependencies, because making changes in isolation will result in disruption. Establish dashboards that provide visibility into work in progress and outcomes to enable real-time, informed decision making at the local level and use automation to bring minimum viable products to market. Then, take the lessons from captured data forward into subsequent development iterations.
3. Partner to develop your strategic roadmap.
Co-create the product / digital strategy, vision and roadmap to enable prioritization. Stand up vertically integrated teams or business value streams that are aligned to products, customers or features and establish a culture focused on shared accountability for innovation.
Organizational excellence today hinges on being able to operate simultaneously at two speeds. By borrowing key DevOps practices, you can establish a new culture of shared accountability in which teams operating at the speed of innovation and at the speed of operations can work together to improve performance throughout the organization.