«Culture Eats Strategy For Breakfast» - companies need to address this issue to successfully drive innovation. We show how.
Author: Alexander Kern
Gartner's 2016 CIO survey confirms what has long been suspected: Cultural change poses the greatest challenges for Bimodal. Companies need to address this issue to successfully drive innovation in their business. We show how.
The Gartner 2016 CIO Survey comes to a clear conclusion: Bimodal is lived. It brings decisive advantages. It enables business innovation. It makes it easier for traditionally risk-averse companies to manage the uncertainty that innovative ventures bring. Mode 1 and Mode 2 provide concrete governance, risk and culture mechanisms to drive business innovation in parallel with daily business. So much for the good news.
As experience shows, so do the hurdles: CIOs have been asked why their company is not becoming «more bimodal» (see chart). 15% cite culture as the main reason. If you add the 6% business culture, the overall figure rises to 21%. The result is clear: handling legacy applications, availability of resources and the necessary skills of employees are only half the story.
Everyone agrees: Bimodal initiatives are a significant intervention in the status quo. Traditional corporate structures control teams centrally. Alignment and innovation decisions come from above. This control is detached from the execution. It is difficult to react to new findings from active projects.
Necessary restructuring is difficult to implement. Teams are not afraid of new responsibilities. The problem is middle management: they fear for their position. Adjustments to the corporate structure are threatened to be nipped in the bud by the «management permafrost».
Similarly, there are traditional incentives: project success is more important than business value. Individual success over team success. ROI must be quantifiable in advance. The risk is avoided by those responsible - for good reason: failure must be avoided at all costs!
The cultural aspect of the chosen technologies should not be overlooked: silos appear as a recipe for success. Open, standardised interfaces are unnecessarily seen as a danger. Redundancy as job security. Know-how in proprietary technologies as a unique selling point.
If Bimodal has already been introduced, new cultural challenges arise: Mode 2 can quickly become the «cool kid». IT, where you make a career and work with new technologies. Mode 1 is in danger of degenerating into a siding.
Promoting cultural change
There are good recipes for overcoming these hurdles. They start with the corporate structure: New findings from active projects must be incorporated immediately into innovation decisions. Agile decision making and alignment must be anchored in the entire company. This only works if managers at all levels transfer responsibility to their teams. Managers no longer act in the form of concrete instructions, but set targets and supervise their teams. Practical experience shows that the transfer of responsibility is particularly difficult for middle management. Therefore, the first step must be to start at this point. A proven procedure: Using agile methods also in processes outside of software development, where middle management is actively involved, e.g. in strategy development or budgeting. The following applies to teams from all areas: The full support of the superior - up to the CIO - is essential.
Incentives must reflect this support: Team success is above all. The success of individuals is not rewarded. Neither is the success of the project alone or process conformity. If it becomes apparent during the course of the project that there is no business value, action is taken quickly. According to the principle: Fail Fast! New key figures are introduced for projects that break new ground and are therefore difficult to quantify with an ROI. Above all, the risk of not driving innovation forward is measured.
Collaboration must be encouraged. Executives need to create positive experiences that demonstrate the benefits of collaboration. Experiences that positively influence the values of the workforce. Experiences that reward good collaboration and the abandonment of barricades. The urgency of collaboration must also be captured in the performance assessment, by adding cross-team assessments. Collaboration is also reflected in the technical implementation: Standardized software, SOA, APIs, self-service, cloud and microservices enable synergy effects.
In bimodal enterprises, the value and contribution of Mode 1 and Mode 2 are equally valued. Metaphors have proven their worth in this context. Gartner speaks of samurais and ninjas (see blog entry). Others are also conceivable, such as classical orchestra vs. jazz ensemble. Here too, positive incentives for collaboration between Mode 1 and Mode 2 should be introduced.
The road to digitisation is through innovation. Companies from all industries must break new ground. Even traditionally risk-averse companies are forced to leave their comfort zone. Bimodal is a simple tool for this purpose. Nevertheless, no company can avoid the cultural change towards an innovation-driven company. The strategy towards more innovation or more Bimodal is like any other: It stands or falls with culture.