Transform Now or Get “Uberized” Later

It has been almost 5-years since industry luminary and venture capitalist Marc Andreessen told us that “…software is eating the world.” Aside from being catchy — and perhaps a little scary — I believe Mr. Andreessen was putting individuals, industries, and enterprises on notice to be prepared for our current age of transformation. The meteoric rise of ride hailing company Uber perfectly illustrates how an entire industry can be transformed, almost overnight, by a combination of smart people, brilliant technology and good timing. While Uber may be a transformative company, its existence has cause the entire taxicab industry to face the stark reality that it must transform or perish. Is your enterprise ready to be a “player” in this age of transformation, or will you be left behind?

What is Enterprise Transformation?

In the context of an industry or enterprise, transformation is a process of profound reorientation for the purpose of dramatically improving overall effectiveness. Transformation requires changes to core characteristics, including vision, values and actions with a willingness to break from past configurations and structures. While not every part of your enterprise will necessarily need to change to accomplish transformation, no part can be put outside the boundaries of consideration.

Transformation is challenging for two principle reasons.

1. When a transformation begins, the future state is unknown and is revealed primarily through trial, error and iteration. New information must be gathered and analyzed through a deliberate feedback loop. Traditional management techniques, employing linear, time-boxed project plans tend not to yield transformative results. Enlightened leaders will always “begin with the end in mind,” but an effective change motion must be permitted to reveal itself as a component of the transformation exercise. Leaders, managers, and the entire team must be prepared to embrace uncertainty and unpredictability.

2. Due to the enterprise’s potentially radically different future state, versus the status quo, a cultural change will likely be necessary to achieve a successful transformation. At all levels, new thinking, discipline, and behaviors will be required to challenge existing orthodoxies. The degree to which change is required can be especially challenging for current leaders. It has been said that “Today’s generals are often fighting yesterday’s wars.” Experience can be a difficult and double-edged sword and, when combined with past success, can significantly limit otherwise highly skilled leaders ability to “think out of the box” and to see beyond conscious and unconscious bias.

Without an enterprise’s willingness to embrace uncertainty and to make the substantive cultural shifts required to challenge the entrenched orthodoxies, to implement new systems, new processes, and new internal structures, the desired transformation, and its ROI, will be illusive.

About the author:

Tal Golan (@TalGolan) is the Chief Strategy Officer at VERB.

To Be Innovative — Be Decisive While Avoiding Analysis Paralysis and Confirmation Bias

An innovative person is one who introduces new ideas, via original and creative thinking. Product innovation is the process of bringing or using new ideas or methods for the benefit of a product’s or service’s feature-set. All product innovation is made possible by innovative people using the immense power of human imagination.

Decision-making and distortion fields

Despite the allure of innovation, for mature enterprises, the transformation required to realize the benefits of innovation requires aggressive knowledge, and understanding, of the decision-making process.

In 1989, a paper was published looking at the ways people contort (or distort) the impression of their immediate circumstances to fit their preexisting worldviews. Steve Jobs, one of the most transformative and innovative leaders of our generation, was famous for what became known as his “reality distortion field.”

The study, titled “Expert Decision Making in Evolving Situations,” provided 11 groups of Army intelligence analysts with a realistic battlefield scenario and asked them to assess the most likely avenue for an enemy attack. The scenarios were similar, with slight variations to produce different answers. In addition to predicting an outcome, each group was expected to share their level of confidence in their predictions.

The investigators then provided each team with updated intelligence reports and asked them to reconsider their assessments. Some reports contained items confirming initial judgments while others were designed to encourage skepticism. The majority were neutral, and the process was repeated two more times.

It was the hypothesis of the investigators the level of confidence should have stayed, in the aggregate, roughly the same. The researchers found the groups grew more convinced with their initial judgements as more information was received. Only 1 of the 11 teams changed its assessment of how the enemy would attack while 7 of the 11 teams expressed greater confidence in their prediction over time.

Through interviews, the investigators found the teams gave significantly more weight to information that reinforced their earlier decisions. When presented with contradictory information, the groups were dismissive or downplayed its significance. This phenomenon is known as “confirmation bias.” The researchers chose Army intelligence teams because they had been trained not to fall victim to the perils of confirmation bias, yet they were now exhibiting it.

The researchers concluded:

“The results of this experiment lend support to the general conclusion that trained subjects in an evolving, realistic, decision environment demonstrate performance characteristics similar to those of novices working with less realistic and relatively more static scenarios. Specifically, confidence in an initial hypothesis is generally high, regardless of the hypothesis.”

Analysis Paralysis is the enemy of transformative decision-making

In today’s climate of rapid change, transformation within mature enterprises is top of mind. No enterprise wants to get “Uberized.” While the status quo is difficult to change, transformative progress requires decisive decision-making. The study above clearly articulates both the challenge of confirmation bias and the power of 1st impressions. To be transformative, leaders need to avoid the pitfall of confirmation bias, while not falling victim to the scourge of analysis paralysis.

About the author:

Tal Golan (@TalGolan) is the Chief Strategy Officer at VERB.