This content is part of a program managed by the Economist Intelligence Unit, sponsored by Accenture and Pegasystems. “Digital Evolution: Adapting Business for a Digital World” aims to shed light on the world of digital business—the strategic imperatives, challenges, complexities and pitfalls. All “Digital Evolution” content can be found here.
Managing Change at Warp Speed
One byproduct of adopting Silicon Valley’s technology is that you often end up following its hypercompetitive product schedule. Adapting to this speed—especially if you are in a decidedly non-techie realm—can be tricky. To reorient, more and more firms are turning to change management specialists.
Enter Michael Biltz. The managing director of Accenture Technology Vision, Biltz specializes in helping firms break the status quo and embrace a fast-paced environment. Constant change is the new normal, and companies that attempt to change their technology without shifting their culture are bound to fail, he says. Here, Biltz talks about why the pace is picking up, what companies must do to keep from falling behind, and the most common mistake management makes when shaking up a business culture.
Q: Is technology solely responsible for the accelerated pace? And does every business need to overhaul its operations?
A: If you look over the past 15 years, everything has gotten faster and faster. This was driven by tech companies like Facebook, Amazon and Sun Microsystems. They moved rapidly because software can change rapidly. Now traditional companies are entering the software game, and that is accelerating the pace even more. Almost every company is building their own software, and that capability opens up a lot of possibilities. So those companies are moving as fast as they can.
Q: Is stability an antiquated concept then?
A: When companies start to build software, they become digital companies—it is then part of their DNA. They then have to adjust to that model and set of capabilities where constant change is expected. If you look at a very traditional company, whether it’s insurance or automakers, most have dealt with change on a relatively long time scale. But as digital companies, they’re expected to change rapidly over and over. For instance, GM is working on a connected car. That means they have to build a connected car platform—and that platform is going to grow and evolve quickly. GM employs Pegasystems’ Decision Management CRM platform, so changes that used to take six months to roll out are now done on a weekly basis. This type of responsiveness is becoming the expectation.
Q: What cultural challenges are involved in adapting to this mindset?
A: The cultural challenges are pretty big. When you’re in a slow-changing culture, most things go through a very regimented and linear set of processes. There’s an emphasis on employees’ honing a single skill set. In an environment where there’s unending, rapid change, the emphasis shifts to employees’ being comfortable with constant transformation. You want employees who can adjust how they think, are able to keep up with altering business objectives, and can even predict the changes that are going to be needed for your software.
Q: What are some best practices for change management?
A: You have to take a broader look at how your employees work. People view change management as a method of handing somebody a new tool. If you give a mechanic a new tool, he or she will understand how to use it. But if you keep handing the mechanic a steady stream of new tools, you cause confusion. The more you hand out change, the more you alter job descriptions. To do that effectively, you have to examine everything—the tools, the processes, the workflows and the incentive system. The most common mistake managers make is looking at the software without considering how the software is going to affect those other factors.
Q: What about companies that aren’t embracing this change? What will happen to them?
A: I think they’re going to fall behind. We’re just at the start of this transition in which companies are going digital. There’s a spectrum in every industry: some companies are moving in this digital direction, and some are resisting these changes. Right now there doesn’t seem to be a huge difference between the early adopters and everyone else. But once those early adopters create that cultural and technological capability to change rapidly, they’re going to break away from the group. A scary stat I saw recently is that if you look at the Fortune 500 from the year 2000, 52 percent of those companies no longer exist.