Successful business transformation requires individuals to lead with vision and deliver through experimentation. The pressure to catch up on technology has created a new race between companies. While some have been eager to adopt artificial intelligence (AI), others have been reluctant.
The majority of leaders are keenly aware that new technology, in itself, is no silver bullet. It’s worth returning to a well-worn cliché: transformation starts with a vision.
Vision: What’s the core ideology?
In an influential article from Harvard Business Review, Jim Collins and Jerry Porras defined vision as having a core ideology and an envisioned future. Core ideology refers to deeply held values; what a company believes is good, worthwhile or necessary. These beliefs aren’t always spelt out; often, they’re revealed by behavior. For instance, when a firm consistently avoids investing outside its traditional revenue streams it may just reflect an underlying core ideology.
Banks are a good example. While banks may be one of the first to adopt agentic AI, it’s more accurate to say that they ‘augmented’ their existing banking products with AI-type tools. Augmenting their core banking products is a sign that they remain committed to their core ideologies as leading bank providers, not tech companies. This example is important because core ideologies are not always bound by the company’s tradition. Consider that FinTech startups can reinforce a unique ideology around both banking and technology. They are software companies that also offer financial services.
Vision: Envisioning a future
The second part, envisioned future, is where it gets interesting. It’s easy to write a roadmap and make educated guesses about what the future might hold, but imagining a radically different future, and inspiring the teams towards that future, is much harder. Especially when that future depends on knowledge outside of your current industry.
Although consulting advisories such as the Big Four have technology consulting, their main advantage still lies in their expertise and client relationships. To envision a future as a tech company will require knowledge beyond the industry, but it can be a possibility if workers are constantly exposed to new technology. If consultants are deploying chatbots, along with their client work, then trying to envision a future using chatbots would be an easier step.
What about a company that’s never been exposed to much innovation? Let’s look at another example of an industry that has good reason to be reluctant about a digital future. A professional who’s spent a career in paper and pulp manufacturing will naturally struggle to envision a digital business model. The paper industry is facing an uphill climb with respect to product innovation. In this case, a concentration on office printing paper restricts how much vision is possible.
The paper industry is not the only one to have trouble envisioning a future. For every paper mill hanging on to its survival there are plenty more that struggle to think about their future. Blockbuster, record companies and Myspace struggled with bringing their vision to reality. They may have a core ideology (their beliefs) passed on from the founders, but the remaining employees will struggle with an envisioned future.
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Being able to envision a future is something that many of us take for granted. Our optimism for the future is not always shared by others. For companies and industries in constant decline, they must look elsewhere for their envisioned future. This doesn’t mean they should abandon their core products and call it quits. In these moments, they should not restrict themselves to the products they ‘grew up with’ and consider looking more widely at other advantages their products bring.
It’s too simplistic to say that a paper mill produces paper for offices and that office workers find it valuable. These conclusions appear to be stereotypes. It is narrow thinking to fixate on physical paper and nothing else. It would be helpful to look at the complicated process of manufacturing the paper, the partnerships and the distribution. Defining the value of a product through its final physical form doesn’t open new doors.
Experimentation to fill the gaps
A vision works like a compass. It sets a direction for where a company would like to go. A vision exposes the “where to?” It is the task of leaders to discover the “how?” part. These gaps are filled using experimentation.
It’s understandable when leaders may think that new technology can be introduced without any experimentation. For example, the professional services sector has given the impression that its expertise, technology and solutions are ‘ready-made.’ Advisors don’t need warehouses, logistics or code repositories to get started, but they are experimenters nonetheless. Even in the professional services, the IP, frameworks and advisory tools used today began as someone’s idea of a better way to solve a recurring problem. In leading consulting firms, common methodologies didn’t appear out of nowhere. Someone had a hypothesis and pursued it with conviction.
Transformation offices play an important role in the roll-out of new technology for the company. In doing so, seasoned leaders don’t expect instant success or that a new portal will be adopted by 100 percent of their users. Implementing an enterprise resource solution (ERP) or customer relationship manager (CRM) takes just as much effort, if not more. They test, fail, adapt and try again before they find a solution that fits their users. A transformation team resembles an experimentation team in this respect. Their solutions represent a ‘work-in-progress’ as they engage in ‘hypothesis-driven thinking,’ creative combinations and learn from trial and error.
Celebrating small wins in the transformation
Having a vision and an agenda to experiment is already a big step. These two factors seem like common wisdom, but they are surprisingly absent from companies. Experience shows that they usually have one or the other. An R&D company will have advanced experimentation but might not have the context to envision a future. A larger, more established company, such as a financial services provider or healthcare company, will have a vision, but not much of a taste for experimentation. There are constraints, regulations and psychological aspects at play.
For now, being able to envision a future and experiment with new solutions is something worth celebrating. Over time, they can accumulate into something significant. A prototype that doesn’t break. A customer who signs up. A feature that resonates. These moments don’t always look impressive, but they represent progress towards your vision. In pursuing a future that does not yet exist, progress matters more than appearing perfect.