Lessons for Leaders: What has 2020 told us about 2021?

In bidding 2020 farewell, the world has been filled with hope that the suffering of 2020 will come to an end as the year came to an end. But it is no secret that the world doesn’t necessarily go through a factory reset on January 1. This is not all bad news though. The turbulent ride that 2020 was has given us certainty about the uncertainty of our present and future! Things are going to remain volatile for a long time.

Now we can stop guessing

Most of the risks that leaders and strategists typically incorporated into extreme future scenarios in the past ended up manifesting one way or the other in 2020. You probably remember when extreme strategic scenarios reflected one or two of the following combinations:

A serious global pandemic resulting in major lockdowns and geopolitical disintegration
An oil market crash and major global economic downturn and restructuring
A breathtaking digital transformation connecting human communities in new ways and threatening personal privacy and security
An expedited energy transition supported by breakthroughs in alternative energy and storage technologies
The expansion of the virtual workplace, and exponential growth in ecommerce
Increasing weather volatility and natural disaster occurrence

Many of these risks are here to stay. And even if the pandemic situation is resolved in the next year, many of its implications are long-lasting if not permanent. Of these, we have identified five themes that appear to be most critical for strategizing for success in 2021 and beyond. Several of these have already been discussed in previous articles over the last couple of years, as noted below.

1. Energy Transitions, ESG, D&I and the Human Race’s Search for Purpose

We clearly are at an interesting stage of development as a race. There is a rising sense of consciousness over how what we do and how do things impact our environments and the lives of other people and creatures. This is especially true for most millennials and Gen Zs who tend to at least partially evaluate employers and product and service providers based on their approach to diversity and inclusion (D&I) and environment, sustainability, and governance (ESG) issues. Employers are also now being increasingly challenged to align jobs and assignments with employee purpose.

By the same token, the investment and regulatory communities are gradually withdrawing support from entities whose operations are believed to simply pollute the environment or reinforce bias and discrimination. There is no going back from this and regardless of how much we may want to argue against it, financial and economic metrics along won’t be sufficient going forward.

As we discussed in a previous article, sustainability-oriented business models will have better chances of winning in the new normal. This, together with the demand shifts described below will continue to accelerate the transition of the energy system away from the domination of fossil fuels. The pace of this transition is still being debated. There is growing conviction among many including oil and gas supermajor that we are already beyond peak oil demand. This is a huge departure from the previous consensus that it wasn’t going to occur until the late 2020s – mid 2030’s.

2. The Expansion of the Virtual Workplace

The technology that supports remote working, team building, and leadership solutions had been here for some time. But the imperatives of social distancing in 2020 drove significant investment in and utilization of digital applications for establishing virtual workplaces. In the middle of the year, major tech companies like Google, Facebook, and Twitter began making announcements that their employees would be allowed to work from home permanently. Leaders have now had experience with the remote workplace concept and developed more appreciation for its positive impacts on efficiency and effectiveness. My earlier article on employee and leadership behaviors in the new normal describes shifts that drive the expansion of the virtual workplace beyond COVID into the next normal.

3. Freelance Work and Small Business Sector Growth

Empowered by technology and challenged by economic downturns, freelancers are finding flexibility and security in establishing multiple sources of income. On the other hand, employers, and especially other freelancers and small businesses are increasingly finding it more cost effective to rely on freelancers. This is especially the case for temporary or intermittent resource and unique skillset needs. In 2019, about 35% of Americans freelanced and it is estimated that 43% were freelancing by the end of 2020. Also, freelancing tends to be favored by younger generations, with 53% of Generation Z (18-22 years) freelancing by 2019. By 2027, some expect that freelancers will make up more than half of the U.S. workforce.

By contrast, the small business sector contracted in 2020 as a result of the COVID health and economic crisis. But the outlook for small business growth in the next few years remains strong with millennials and Gen Zs continuing to show preference for being their own bosses. In addition, barriers to entry are now lower in many industries as the digital transformation is availing new analytic and business networking capabilities that may be much easier for smaller and newer entities to leverage.

4. Major Demand Shifts Driven by the Technologically-Empowered End User

End users are being empowered by technology in a few ways, as I elaborated in an earlier article. These include the growing availability of information about products, services, and providers as well as the easier access to a wider variety of providers. This together with the expansion of the virtual workplace, and the growth of freelancing work and ecommerce are already driving significant shifts in demand for many commodities. Understanding and predicting such demand shifts can be very tricky but is absolutely critical for succeeding in 2021 and beyond. In the energy sector for example, the transformation in end user demand already drove profound shocks in the industry in 2020 as discussed in our article about energy demand transition. When combined with an expedited energy transition, demand shifts can change the landscape for oil and gas players indefinitely.

The airline and hospitality industries had already seen first order impacts from this dynamic in earlier years. Customers not only have access to information about their choices, but also have access to technologies that allow them to connect with family, friends, customers, and business associates without having to travel. Of course, these industries have been even more dramatically impacted throughout the COVID crisis.

5. The Humanization of Human Resources

Having been reinforced by the COVID experience, the overall wellbeing of employees is gaining importance as a driver of talent attraction, retention, and engagement. Pressure is mounting on leaders to demonstrate compassion and trust and approach their people as holistic human being, prioritizing their mental and physical health and family lives. As I discussed in another earlier article, there is near consensus that the leader of the future will only succeed if they consider employee fulfillment and purpose foundational to their people policies and strategies.

Now what?

Many of the events of 2020 were harsh for sure. But we were taught that it would not be impossible to grow and even win in this environment. The uncertainties that continue to materialize so rapidly before us present not only new challenges but also new opportunities. Success now requires new strategies that understand how each of the themes discussed here impact the overall business climate including customers and prospects, competition, and current and prospective employees.

Contact us to learn more about how we partner with executives to revisit their strategies and develop resilient leadership teams for winning during a historical juncture in human history.

What has the April 2020 experiment told us about the energy DEMAND transition?

Last year in September, we wrote an article on the challenge of meeting aggressive environmental goals while ignoring the demand side of the energy equation. Energy transition and climate change policy and investment initiatives had thus far been focused on reducing our reliance on fossil fuels in energy supply to control carbon dioxide (CO2) emissions. But our relentlessly growing consumption of energy across the globe had made meeting aggressive emission reduction targets near impossible. The COVID-induced reduction in energy demand has more than demonstrated the significance of demand in realizing aggressive emission reduction targets. In its early days, COVID19 successfully delivered an energy transitions experiment, proving that these goals are only attainable through transitions in not only energy supply but also energy demand.

A quick analysis of the EIA July 2020 Monthly Energy Review reveals some key insights about the fast arriving transformed future that are critical for energy industry leaders and policymakers to consider when making strategic choices. In April 2020, the U.S. went through a somewhat effective energy transitions experiment. The outcomes have clearly been far from pleasant for the industry. But they offer some important insights about what it takes to for energy transitions and related climate change goals to be met and how they will affect fundamentals for players along the supply chain of the energy industry.

Sustainability and Climate Action Plans that Don’t Address Demand Growth are Just Plans

In April 2020, the U.S. energy industry saw the most meaningful reduction in its monthly carbon dioxide emissions in over five decades. CO2 emissions from energy consumption were about 8% lower than in June 1982- the lowest monthly emission level since January 1973. Many have rushed to thank recent innovations and investments in renewable energy technologies for the acceleration of energy transitions. But renewable energy production in April was actually lower than its monthly average over the last three years. Total primary energy consumption, on the other hand, dropped to levels not seen since September 1989 suggesting that demand contraction was the major driver behind the reduction in emissions.

The Sectoral Transition in Energy Demand is Pacing Up

COVID19 lockdowns, stay-home orders, and social distancing guidelines this year restricted human mobility to levels probably not seen in several decades. Fortunately, the digital transformation had delivered technologies that are making business continuity and social connections still largely possible. We now rely on technology much more expansively to engage socially, run businesses, and buy and sell everything and anything from home. This translated into much larger consumption declines in the transport, industrial, and commercial sectors compared with the electricity and residential sectors.

In April 2020, the residential and electricity sectors represented a total of 46% of primary energy consumption versus 41% last year. As productivity and performance concerns around remote working and virtual meetings get addressed, it is unlikely that we will ever return to our previous norms of travel by air, sea, or land. The COVID19 experience has inspired leaders to think differently about resource allocation. Many major tech companies have extended their remote working policy until next summer and some announced that employees will now have the choice to work remotely indefinitely. This means that the energy demand transition from the commercial and industrial sectors to the residential sector, and from transport to electricity could continue even post COVID19. This trend could only get multiplied as a result of the transition of consumption from oil to electricity with the proliferation of electric vehicles. As a result, oil consumption may never return to its pre-COVID19 levels which suggests that “peak oil” may already be behind us.

The Role of Natural Gas as a Bridging Fuel Cannot be Ignored

It will take some time before we have fully figured out ways to manage our energy appetite, de-link economic growth and energy demand growth, or further expedite investments and innovation in renewable and storage technologies. The recent blackouts of a struggling electric system in California demonstrate why natural gas generation will still be important at least until sufficient storage capacity is in place to mitigate the intermittency of zero carbon generation and maintain reliable operations.

In April 2020, when U.S. carbon emissions from energy consumption hit historic lows, natural gas consumption actually rose by 2% compared with April 2019 while consumption of all other sources (including renewable energy) declined. This was driven by the sectoral energy demand shifts described above: transport to electricity, and commercial to residential. Also, new efficient gas-fired electric generation continues to displace coal-fired generation. As a result, our energy consumption mix saw a larger contribution of natural gas compared to 2019 at the expense of petroleum and coal. This trend may not be indicative of the eventual destination of energy transitions but of the path to get there.

And Finally Understanding and Predicting Demand under Different Scenarios is Imperative for Success

It is unfair to argue that anyone could have predicted something of the nature and scale of the COVID19 crisis and its implications on the energy demand transition. But forming alternative views on the demand dynamics expedited by COVID19 was not out of reach, because they had been evolving for some time. Digital technologies had been enabling businesses, employees, and customers in new ways for some time. Sustainability and climate change goals had been getting more aggressive, and investment in related technologies had been pacing up for a couple of decades. And the abundance of cheap natural gas resources in the U.S. has positioned it for its temporary bridging role some time ago.

As has been evidenced thus far this year, and especially in April, the progress made on energy transitions and the digital transformation increases the energy industry’s vulnerability to demand uncertainties- especially for oil and gas players. There are multiple sub-regional and global dimensions that we haven’t discussed here but will remain highly relevant and volatile. The ability to formulate and embed various energy demand scenarios into top level/big picture decision making will differentiate the winners not only in the long-term, but also in the short and medium terms as experienced this year already.

The April 2020 experiment, while painful from an economic and public health point of view, was a nice joined up energy supply and demand case study on what it takes to achieve aggressive carbon emission reduction goals. And regardless of our position on the science of climate change, as industry leaders we would all benefit from understanding demand transition dynamics and their implications on our business.

Contact us to discuss how we can partner to better understand transformational trends in your industry and strategize for evolving leadership within your organization to ensure winning in disrupted reality.

Transformational Leadership: Top 5 Traits and Top 5 Limiting Mindsets

This decade is already proving to be much more intimidating to the status quo than the previous three or four decades at least. And disruptive forces are challenging leaders in new ways across different industries. In the energy industry for example we are having to navigate three major transformations concurrently: the energy transition, the digital revolution, and diversity and inclusion (D&I). Environment, social, and governance (ESG) are top on the agendas of major industry players globally. Much of this has been expedited by this year’s events, especially the COVID19 outbreak and the growing concern about racial divide issues.

Building our transformational leadership muscle is now a ‘must have’ for those who are looking to pivot their businesses for wining in a disrupted reality. Leaders that had already aligned their overall visions with the digital revolution have been better able to run operations more effectively and efficiently during lock-downs. The resultant relatively safe and stable experiences for employees and customers in turn translated to favorable financial outcomes. Likewise, leaders that had already developed strong D&I brands for their organizations had better chances of avoiding the negative implications of perceptions about their bias on their sales and financials. And, oil and gas industry leaders that had already pushed their energy transitions/ESG visions forward probably felt more optimistic about the future of their organizations in the face of the recent oil price shocks.

But what does it take to excel as a transformational leader? And what traditional mindsets block the realization of transformational visions?

Top Transformational Leader Traits

Throughout my experiences in patterning with transformational leaders, I have observed that those who are able to excel in orchestrating major organizational shifts share five traits:

Influential and engaging. Transformational leaders understand very well that they can’t go it alone. Their success hinges on their ability to engage stakeholders around common visions and well aligned strategic roadmaps. This may require a different balance between command-and-control and collaborative leadership styles compared with what worked in the past. In addition to securing buy-in and commitment to the vision, an effective stakeholder engagement approach establishes a safe environment for feedback solicitation, and innovative idea generation.
Perceptive and insightful. Transformational leaders are insightful observers of events and developments within their businesses, industry sectors, and the wider economy. They tend to be highly talented in connecting the dots, realizing trends and identifying opportunities prior to others. They don’t have to be subject matter experts (SMEs) themselves but they know how to engage SMEs and translate their analyses and opinions into commercially relevant insights and drive results accordingly.
Adaptive visionary. While being visionary is a valuable leadership trait in general, leading through transformations calls for a different type of visionary, the adaptive visionary. The adaptive visionary makes it a habit to check their vision against major internal and external developments as well as the views of experts and thought leaders within and outside their organizations. The highly disruptive nature of our times calls for dynamic rather than static visions and supportive strategies. The adaptive visionary is able to imagine and re-imagine the future under different likely scenarios as soon as early signposts emerge or are brought to their attention.
Commercially–driven. Many major projects and organizational change efforts end up running above budgets and schedules. I am sure some of us feel that most if not all transformational initiatives miss their deadlines and exceed their budgets. They may also place pressure on the financial performance of the organization’s core business by leaning on its resources. Keeping an eye on the commercial priorities of the core business is top on the transformational leader’s list. In addition, understanding and managing the direct commercial outcomes of the organizational change under different potential constructs of the future is foundational for their success. This includes adopting solid approaches to identify, quantify, and mitigate risks in the short-term let alone the long-term.
Strategic risk taker. Massive transformative disruptions naturally bring new and completely unimaginable risks, some of which are actually hidden opportunities. Winning takes leaders who are not only proficient in identifying and navigating risks but also make some bold strategic choices. They understand that the risk of inaction can be much higher than the risk of action in disrupted world. Strategic risk taking at the top is also important for inspiring a culture of creativity and innovation across the organization.

Regardless of the scale of the disruption and the nature of the journey, my clients and I find ourselves leaning more on these traits as we partner on leading successful transformations. Pivoting into new modes of growth takes a dynamic approach to balancing these five traits, while constantly prioritizing effective stakeholder engagement and teamwork. I hope this is not a surprise!

Top Leadership Mindsets that Block Transformations

Over the last decade, I have had many opportunities to partner with leaders on achieving their ambitions to pivot their businesses into growth in a disrupted industry. This included supporting energy transitions visions, evolving analytics to elevate an organization’s brand along its value chain, and redesigning structures and roles to prepare for major transformations. Throughout my experiences I have identified five legacy leader mindsets that tend to block transformative efforts:

Direct returns-based assessment of new initiatives. In many instances, leaders find themselves working too hard to protect the successes of the past. This mindset only considers the direct revenues of new initiatives and ignores highly likely risks to core business revenues as the wider economy transitions away. It also ignores other opportunity costs associated with unfavorable transformation outcomes for conservative leaders compared to bolder competitors. Being outpaced by competition is one of the easiest ways to to hurt your brand and your core business results.
Deterministic leadership cultures. This is somewhat linked to the first mindset. In an industry that had historically been lucrative like O&G for example, a deterministic mindset that assumes the continuation of past trends could easily become the norm. As major transformations unfold, long-term trends are constantly disrupted. Deterministic mindsets can lead to the handling of disruptions as short-term inconveniences rather than lasting shifts. This can easily result in facing the risks of a transformation without sufficient preparation and missing out on its biggest opportunities.
Traditional competitive assessment. When I ask leaders about the competitors to consider when re-envisioning their future, they mostly list their past competitors. In most of the cases and after a little bit of digging, my clients and I find some big surprises. Traditionally, their competitors were entities that provided similar produce and services to theirs. During major disruptions, most players are transforming their businesses and customer mindsets are changing so rapidly. New competitors emerge, potentially doing very different things but customers could easily be putting them side by side with some traditional offerings for picking a winner. Understanding who competes for your customer’s attention during a major transformation is paramount to success.
Job description orientation. This mindset is common among leaders with a track record in climbing the corporate ladder and typically aspiring for the next move up. During transformations, they struggle with the lack of clarity and their struggles become contagious across their teams . This is a first for us all! And no job description or annual objectives will spell out what it takes to come out on the winning side of the energy transition, digital transformation, D&I transformation, or even the COVID19 disruption. Regardless of the size of your team or business function, leaders could benefit from finding ways to thrive in uncertainty while staying aligned with overall corporate visions and values. Limiting your own imagination and creativity will only limit creativity and innovation within your team.
And the winner is the silo mindset. This is perhaps one of the most common barriers to any organizational change effort. The ‘what’s in it for me or my team’ foundation for decision making and resource investment can therefore be extremely limiting. The transformations reshaping the future of humanity today are all intertwined, inter-disciplinary, cross-sectoral, global in scope and extremely large in scale. Leadership teams will float together or sink together. The desire to stick to traditional product or service definitions, organizational structures, and team boundaries is an implicit decision to struggle throughout the transformation and remain a follower of transformational leaders rather than one of them.

There are other mindsets that tend to block transformational breakthroughs. And like the five most common ones they are mostly related to the human tendency to stick to tried and tested methods. Consistently staying the course has its merits during more stable times. But when we are trying to chart a new path the balance will need to be tilted toward creativity, innovation, flexibility, compassion, and alignment.

Contact us to learn more about how we partner with executives to build their transformational leadership muscle and identify and make the necessary mindset shifts.

The Rise of the Digitally-Empowered Customer

A few weeks ago an energy industry executive that I look up to asked me a simple but great question: what gap in energy industry analytics is most significant to leaders? While I’d never thought of it this way in the past it took me only a couple of seconds to come up with my answer: demand scenarios! This is because over the past couple of years, many of my clients and I found ourselves repeatedly identifying the rise of the digitally-empowered customer as a gap in their vision of the future. Then came COVID19 to expose our limited understanding of digitally-induced demand dynamics and the associated risks not only for energy but across different industries. Many businesses now are keeping busy with their own digital strategies. But the future implications of the digital revolution on the behaviors and demand profiles of B2B clients and individual end users are rarely well understood. Winners during the ongoing health and economic crisis are mostly businesses that had historically better aligned their visions and strategies with the digitally-empowered customer. This alignment is more relevant now than ever as we all are getting more intimate with our devices while we socially distance from each other.

But don’t get me wrong. Aligning your business with the digitally-empowered customer is not just about perfecting ecommerce and digital marketing. It begins with a robust prediction of potential behavioral shifts and their implications on demand in your sector. The digital revolution is already empowering the individual customer in many different ways. Discussed below, these trends are here to stay and grow. How about your brand and business?

1. Access to an increasing amount of detailed product, service, and business information

Real-time access to detailed information about products, services, and their providers is getting easier every day. This information comes in different forms and shapes including customer and expert reviews. Businesses and individuals are now able to make their purchasing decisions on a much more informed basis, even without speaking to a single person. This means that unfavorable information about a single transaction or employee experience can remain online and hurt brands indefinitely. Winning businesses and leaders know how to use this challenge to their advantage.

The electronics industry is a great example where users, experts, and companies make it very straight forward for us all to compare product features and find the right fit for our needs with the least amount of effort. Electronic companies themselves report on the bugs and shortcomings in their products and how they plan to fix them in upgrades or new releases.

Do you have full knowledge of all the information that would influence perceptions about your brand? What are you doing to contribute to the dialogue in ways that strengthen your brand?

2. An expanding variety of product and service choices

Digital technologies enable providers to reach customers that they wouldn’t have been able to reach otherwise due to financial or geographic constraints. Digital marketing requires much less financial commitment than traditional marketing. I am intrigued by how the digital revolution is challenging law and medical practices with all the new choices that are available to their empowered customers. Through search engines, social media, and specialized websites it is so easy to find and compare legal and healthcare providers in so many different ways. One bad patient or client experience can easily send a few prospective patients and clients away. Lawyers are starting to get much more active on social media, and doctors are probably next!

Barriers to new entry in many industries are also reduced by the ability of smaller, new entrants to adopt new technologies more easily and faster than larger, more established businesses. Clients now can easily find product and service choices that are more aligned with their own technology preferences, systems, or workflows. Through creative solutions, leaders of larger organization can turn this challenge into an opportunity as well. For example, tech conglomerates like Google, Facebook, Amazon and Alibaba have established internal venture studios to spin off innovative startups that are not limited by the legacy systems of the parent organization.

How is the digital revolution changing the competitive landscape in your sector? In what way will you leverage technology not only to stay but also to be ahead of the game?

3. The ability to form, join, and mobilize large virtual global communities

This may seem like it has much more relevance to politics. The ability of one or a few individuals to virtually ignite major social movements and revolutions has been changing the lives of billions of people during this last decade. As a result, economies and business environments are also being transformed in unimaginable ways. One recent example is the growing impact of Black Lives Matter (BLM), a movement that was founded in 2013 to address police brutality in the US. BLM’s expansion to become a global movement was only made possible through social media. What used to be a national concern is now an international issue.

These global cause-based communities are now able to not only change the socioeconomic landscape for businesses, but also directly make or break a brand. The effect of global virtual communities on individual preferences and brand perceptions is growing rapidly. In extreme instances, calls on social media to boycott businesses based on their stances on political or social issues can have serious implications on established brands. Even Facebook saw some losses as a result of the recent ad boycotts.

Are you familiar with the global communities where your customers and prospects hang out? How well are your values aligned with their causes?

4. More Independence, Less Reliance on Others

Imagine how our lives would have been during the COVID19 crisis if digital technologies weren’t making us this independent. While painful to many parents, teachers, and school administrators, their collective success in saving the academic year could have been impossible to achieve just five years ago. The list of applications enabling client independence had been growing fast even prior to the coronavirus outbreak: e-learning, homeschooling, electronic trading platforms, online banking, e-commerce, online health assessments, nutrition and exercise apps, etc. Digital technology is not just eliminating the need for some middlemen but also expert hours since expertise can now be digitally packaged and sold and resold to millions of clients indefinitely. This is in addition to the expanding application of robotics ranging from helping the elderly with independent living to helping doctors with surgeries.

For businesses, the challenges range from declining demand for their services and products to increasing competition from nontraditional providers. This new competitive challenge comes in the form of digital or digitally-packaged and/or delivered products and services that improve client independence. At the same time, new opportunities are surfacing for those who are willing to get creative about product design and delivery and client engagement.

How is digital technology improving client independence and tightening competition in your sector? What product features or client engagement strategies will make you the go-to provider for those who are seeking more independence?

5. Reduced Need for Transport with Telecommuting, Telemedicine, Teleworking, etc

This is a trend that has clearly been accelerated by the COVID19 crisis. The preference for telecommuting is expected to remain strong for some time due to the challenges associated with reopening economies at a sustainable pace. Post COVID19, the pandemic’s prolonged socioeconomic and behavioral effects could mean that many of us will continue to travel much less by land, sea, and air. There will clearly be direct implications on the transport, aircraft and automobile manufacturing and energy sectors. In the energy industry, for example, the muted desire to drive or fly places downward pressure on transport fuel demand but upward pressure on residential power demand. This could improve prospects for renewable energy and other electricity generation sources.

Also, some other sectors will see second order impacts from telecommuting such as the hospitality industry. When working or spending our vacations at home, restaurants will suffer from lower dine-in and take-out demand. Likewise, hotels may continue to see much less in-person conventions and conferences for some time. On the positive side, the broadband industry is picking up much higher demand.

What kind of first, second, or even third order impacts is your industry seeing from the proliferation of telecommuting? What are your plans to navigate the challenges and capitalize on the opportunities?

The socioeconomic transformation associated with the rise of the digitally-empowered customer is already reshaping competitive landscapes and demand profiles. Success now hinges on the ability of leaders to revisit future visions accordingly and strategize for new challenges and opportunities surfacing as a result of the rise of the digitally-empowered customer.

Contact us to learn more about how we partner with our clients to navigate the digital revolution and other major transformations

Seeking New Normalcy: Winning Strategies

The new normal continues to take shape as social distancing and other health and safety measures bring transformational shifts to our behaviors, societal values, employment practices, and leadership approaches. The demarcation between winners and losers in this environment may become clearer than ever. What it takes to be on the winning side could vary by industry, location, and/or profession. In our survey about the new normal, we asked leaders from the energy, health, and coaching industries about their views on what it takes for businesses in their respective sectors to excel in the new normal. Their answers indicate that bigger picture success drivers are similar across the economy. How each of these is interpreted will clearly be different for each organization.

What will take for businesses to be on the winning side in the ‘new normal’?

There was a great deal of consensus among our respondents that winning in the new environment will hinge on realizing and maintaining a tricky balance between flexibility and innovation on one hand and taking responsibility for sustainability on the other.

Innovation in employee and client solutions. As discussed in earlier blogs, the preference for having the flexibility to work remotely and meet virtually when possible is expected to be here to stay. Applying communication and digital technologies creatively to allow employees to do their jobs while adhering to social distancing has already proven to be an important survival and success tool in the new normal. Innovation in client solutions has also been a major differentiator for grocery stores, other retailers, and restaurants that were quick to upgrade their online shopping and delivery systems. Professional service providers offering research, advisory, consulting, and coaching services have also increased their online activity levels immensely. Even healthcare services are now trying to be creative about going largely virtual where possible. Our respondents feel that continued innovation in leveraging digital technologies to improve employee and client experiences to help establish diversified businesses will be critical for success in the new normal.
A proactive attitude toward change and risk assessment and management. Embracing the constant state of change that comes with the new normal is viewed as a top driver for winning. While predicting the timing and nature of change accurately can be near impossible, winners will typically have established the capability to identify, assess and navigate risks. Being proactive about embracing change and assessing and mitigating risks calls for a great deal of operational and commercial flexibility and nimbleness. Also, while visionary leaders can be naturally gifted in identifying signposts for game changers, every leader can benefit from a mechanism for soliciting such input from visionaries within their organization and wider industry. The leaders we spoke to realize that it could be very complicated to be prepared for winning under many potential future scenarios for how things could evolve in the short, long, and medium term. But they’ve all agreed that otherwise success would be far fetched in an evolving and volatile new normal.
Sustainability-oriented business models. Leaders that had considered operating efficiency and emergency preparedness among their top priorities in the last few years, have been better able to ensure business continuity during the COVID19 crisis. Going forward, our respondents believe that taking responsibility for sustainability will require mental, emotional, physical, and financial preparation.  Effective sustainability business models will, therefore, have to encompass all aspects that impact operations including facilities, human capital, skillsets, structures, information technology, and financials. Also, an organizational culture that values continuous efficiency improvement can be a real differentiator for organizations that prioritize sustainability. In addition to their operational, business continuity, and financial benefits, sustainability business models remain an important tool for realizing ambitious environmental goals.
Employee empowerment and engagement. Most of the leaders that responded to our survey agreed that the quality of leadership will be a real differentiator for winners in the post-COVID19 world. Engaging employees in identifying and addressing challenges and preparing for emergencies while ensuring alignment around organizational visions and missions is recommended not only for winning but also for survival. This requires an open exchange of feedback with employees and commitment to the greater good of stakeholders, not just shareholders. This in turn will allow organizations to function with a longer time horizon mindset, beyond maximizing next quarter returns and engender innovation in ensuring nimbleness in the face of volatility.

Interestingly, wining strategies in the new normal do not seem very different from some of the top leadership priorities that we had all been working on during the last few years: innovation, sustainability, employee empowerment and engagement, and a proactive approach to change and risk management. COVID19 and the ensuing economic crisis are now accelerating the attention to these priorities and reinforcing their importance for business continuity and commercial performance. In addition to assessing and managing risks, winning businesses will be those who are able to adopt and leverage these strategies to identify and capitalize on new opportunities in a socially responsible manner. If you think about it, these principles are relevant for establishing a new foundation for growth across the wider society- including public and private organizations across sectors, charities, special interest groups, communities, and even families. As influencers within several of such entities, we each have the responsibility to bring more agility, flexibility, sustainability, and engagement to our environments.

Digitalization gone too far: my struggle with digital marketing agencies and coaches of coaches!

Since I launched my startup last year, my social media and email have been seeing much more activity from digital marketing agencies and coaches of coaches than clients or friends. Most of these businesses are startups themselves who are in the business of serving other startups. And pretty much all of them are using digital technology to sell digital technology-based services. The DIGITAL AGE has arrived if you haven’t noticed! And it’s making a great deal of data and very sophisticated technology available to the average person. So launching a new business is seeming simpler and simpler but is success also going to be much easier for the new entrants or incumbents?

I have been taking much of these online ads and marketing material pretty seriously, but deciding whether I need any of these services and picking a provider has been a real struggle on multiple levels:

Taking all of this digital activity seriously means that I don’t take my own business seriously! There are simply not enough hours in the day to review and evaluate every piece of communication we receive about a coach of coaches, a digital media agency, or a marketing and sales consultant supporting coaches and consultants. Let alone the time and energy we need to live, work, and address our responsibilities.
Well structured digital campaigns make differentiation a real challenge. The combination of very similar messages and almost identical techniques makes it near impossible to understand what differentiates one business from another. The email, LinkedIn InMail, or Facebook message structure is pretty modular like they are all written by the same sender for the same recipient. Also, most providers follow very similar schedules of communication, advertising, and content releases like they are all part of the same machine. Their LinkedIn profiles are structured in very similar ways that it is sometimes boring to go through them. Even their promises sound very similar which makes it extremely difficult to pick any of them with confidence.
I wonder how they’re all going to help me “get high ticket clients” when their digital marketing is not making me feel like one. Receiving identical messages and responses to what every other lead receives doesn’t make me feel like these providers appreciates my unique situation and needs. Even when it comes to scheduling meetings, I am being sent to an online calendar to schedule my own calls. I am finding it pretty difficult to believe that high ticket clients can really be won without some real human interaction to establish credibility and win confidence.
Apparently many of these providers have built multi-million dollar businesses and want to show us all how to by exactly building businesses like theirs. No comment there!

Digital technology provides businesses and the larger economy with access to unlimited amounts of data and communication and analytic tools. But since digitalization is at the fingertips of most (if not all) professionals and businesses, differentiating our offerings has become very challenging. This is especially the case for startups that are still working on building their brands. When it comes to doing business, I believe that digitalization will only succeed when it enhances the human experience rather than fully replace it.

Digital Transformations: four strategies that actually work!

In my previous post, I discussed some typical leadership pitfalls that derail digital transformations. I got some good feedback that it resonated with many who’d been involved in or leading such transformations. There seems to be some good consensus around the danger of neglecting the cultural and commercial implications of digital transformations and treating them like isolated technology initiatives. Also in follow up conversations, some common themes began to emerge around strategic approaches that actually worked. Collective experiences suggest that a combination of the top four strategies discussed below establishes a solid foundation for the successful integration of digital technology.

Communication: simplify the message

I actually heard this repeatedly from technology heads who felt that their teams and larger organizations would benefit immensely from simplified top leadership communication. These high-level messages need to articulate the rationale behind the transformation and what to expect during the journey:

What are the goals of integrating new digital technologies and going through an organization-wide transformation? How is this going to affect the bottom line, operations, or safety? Is the organization being reactive or proactive considering where clients and competitors are on their transformation journeys?
Which teams and functions are responsible for figuring out how to get there? The answer- which typically requires some investigation- need not include the fancy solutions that some executives tend to promote prematurely: the Internet of Things (IOT), Artificial Intelligence (AI), Machine Learning, Analytics, the Cloud, etc.
What is expected from other functions to support the planning and execution of the transformation? Will some roles and responsibilities change during or after the transformation? What exciting growth opportunities does this transformation present for people and teams?

Execution: demonstrate success

Securing stakeholder buy-in and commitment can be extremely challenging in ways that slow down transformations. Anticipating and mitigating this and other risks are not necessarily straightforward. One proven strategy is to start with small demonstration projects with direct commercial or efficiency impacts. Successes can then be scaled up and failures can be avoided. Organizations that use this strategy typically scope out and implements individual projects to achieve very specific digital transformation goals similar to the following:

Improving efficiencies in data gathering, manipulation, and analytics to liberate resources for higher value activities;
Raising safety standards or overall quality levels across operations;
Extracting better insight from employee and candidate data to inform HR strategies;
Enhancing existing products or launching new innovative offerings; or
Gaining additional intelligence on clients and competitors to support product development, and sales and marketing efforts.

Change management: engage the wider business

This is another strategic imperative that technology and data analytics team leaders are very big on. Their tech-savvy teams require so much support on understanding and transforming the employee and client experiences, which are what it all eventually comes down to. Therefore, it is critical that teams that are responsible for operations or interact with clients are sold on the value of the transformation and are partners in making it happen.

Effective engagement starts from the top and very early in the journey. It requires proactive communication and genuine solicitation of input related to the transformation. Otherwise, most employees will continue in a business-as-usual manner expecting some new invention to drop on their desks one day or maybe they won’t even have faith it will! Ineffective stakeholder engagement can easily make the latter a self-fulfilling prophecy.

Personnel: attract, develop, and retain hybrid talent

The scary pace of technological advancement is removing geographic and functional barriers much faster than we are able to adapt to it. Understanding and addressing this challenge is not only a strategy for success but also a necessity. Digital transformations involve changing the employee experience, or the way employees carry their jobs and interact with each other and with clients. They may also involve changing the client experience through enhanced and new products and services or more innovative methods of delivery and client interaction.

This requires not only solid understanding of legacy processes but also the imagination to visualize how these experiences would change. The latter calls for familiarity with the available technological options, what they can deliver, and how they can change employee and/or client experiences. Organizations will therefore benefit from the ability to attract, develop, and retain employees with hybrid skill sets that allow them to consider the operational, commercial, and technological aspects of the transformation. Defining what the ultimate hybrid skill sets and roles look like takes some work, but it is a clear necessity.

We are still in the middle of an overwhelming digital transition, which means there is still so much to learn about how organizations can make digital transformations successful. But our collective experiences are increasingly offering significant input on strategic approaches that work. What’s interesting about the strategies discussed here is that they are probably critical for orchestrating and executing any major transformation- digital or not!

Digital transformations: four leadership pitfalls that derail them!

Developing and implementing effective digital transformation strategies is becoming more and more imperative not only for growth but also for survival in many industries. If your organization does not become capable of fully leveraging the opportunities offered by new data technologies in innovative ways, your competitors will. Also, new competitors will emerge with the ability to readily adopt new technologies. Where relevant, this is being largely realized by executives who are making digital transformation strategies a corporate priority. However, to what extent are their approaches helpful or actually detrimental to the progress of their organizations?

Throughout my experience in the energy industry, which is pretty data intensive, I have noticed that the technology-driven transformations can easily be derailed by the same strategies that aim to support them. Some of these pitfalls can be more tragic than others of course but some combination of two or more typically collide to reinforce the natural resistance to change. Here the top four I’ve observed over the years:

Communicating the digital transformation as an end rather than a means. Introducing digital transformations as a vision for the future can actually be pretty confusing. A digital transformation strategy is actually a means to develop the ability to quickly leverage state-of-the-art data technologies to realize an already well articulated commercial vision. Through time, this is becoming more of a must-have than a differentiator. Clarifying the specific objectives of the transformation is the first step towards success. Are the new technologies and the data they avail going to offer more insight into clients and/or competitors? Are they going to improve the quality of the offering or enable the development of new offerings? Otherwise, if the ongoing global technological revolution calls for an overall vision revisit, that should be well articulated. Otherwise, eyes should still be kept on the prize!
Getting overly excited about solutions before defining the problem. Let’s admit it. Most, if not all, executives are not necessarily the most tech savvy in their organizations. A leader, however, may get extremely excited about the opportunities made possible by a specific concept like Big Data, Analytics, the Internet of Things (IOT), Artificial Intelligence (AI), Machine Learning, the Cloud, etc. And if a leader constantly raves about specific solutions, these may end up being perceived as the desired answer regardless of the question. Going back to your vision as a leader, it’s best if your guidance focuses on where you think technology can be helpful. And trust your organization to identify and implement the suitable solution because before I finish writing this some even more exciting concept, technology, or application will have emerged!
Creating an unintended parallel organization. Investing in and empowering a highly talented technology team to migrate systems and data to new platforms is critical. But, if operations, subject matter experts, sales and marketing teams aren’t all fully engaged in the journey, the desired holistic shift could easily be slowed down or miss its business goals. Old systems and approaches may remain a mystery to the technology team, negatively affecting efficiency, quality, and, as a result, brand. Employee engagement and client centrism are significant ingredients for successful digital transformations. This requires a well formulated strategy for securing buy-in and establishing a sense of partnership among stakeholders.
Isolating innovation as an independent business function. Allocating a department or function to innovation can be useful at a time when technology is evolving faster than we can figure out what to do with it. But it can signal that the rest of the organization has no business being innovative. Also, innovative efforts across the organization that go unnoticed can be a huge demotivator. Adopting an innovative culture that engenders creativity, on the other hand, will have positive impacts on the pace as well as the benefits of the digital transformation.

As the digital revolution unfolds, leaders are challenged with having to develop and implement transformation strategies while learning from their own mistakes. The importance of dynamically understanding and managing the wholesale cultural and commercial implications of this transformation can not be overstated.

Category Digital Transformation