Experian | Human-Centered Change and Innovation

Four Change Empowerment Myths

GUEST POST from Greg Satell

We live in a transformational age. Powerful technologies like the cloud and artificial intelligence are quickly shifting what it means to compete. Social movements like #MeToo and #BlackLivesMatter are exposing decades of misdeeds and rewriting norms. The stresses of modern life are creating new expectations about the relationship between work and home.

Every senior manager and entrepreneur I talk to understands the need to transform their enterprise, yet most are unsure of how to go about it. They ordinarily don’t teach transformation in business school and most management books minimize the challenge by reducing it to silly platitudes like “adapt or die.”

The truth is that change is hard because the status quo always has inertia on its side. Before we can drive a true transformation, we need to unlearn much of what we thought we knew. Change will not happen just because we want it to, nor can it be willed into existence. To make change happen, we first need to overcome the myths that tend to undermine it.

Myth #1: You Have To Start With A Bang

Traditionally, managers launching a new initiative have aimed to start big. They work to gain approval for a sizable budget as a sign of institutional commitment. They recruit high-profile executives, arrange a big “kick-off” meeting and look to move fast, gain scale and generate some quick wins. All of this is designed to create a sense of urgency and inevitability.

That works well for a conventional initiative, but for something that’s truly transformational, it’s a sure path to failure. Starting with a big bang will often provoke fear and resistance among those who don’t see the need for change. As I explain in my book, Cascades, real change always starts with small groups, loosely connected, united by a shared purpose.

That’s why it’s best to start off with a keystone change that represents a concrete and tangible goal, involves multiple stakeholders and paves the way for future change. That’s how you build credibility and momentum. While the impact of that early keystone change might be limited, a small, but successful, initiative can show what’s possible.

For example, when the global data giant Experian sought to transform itself into a cloud-based enterprise, it started with internal API’s that had limited effect on its business. Yet those early achievements spurred on a full digital transformation. In much the same way, when Wyeth Pharmaceuticals began its shift to lean manufacturing, it started with a single process at a single plant. That helped give birth to a 25% reduction of costs across the board.

Myth #2: You Need A Charismatic Leader And A Catchy Slogan

When people think about truly transformational change, a charismatic leader usually comes to mind. In the political sphere, we think of people like Mahatma Gandhi, Martin Luther King Jr. and Nelson Mandela. On the corporate side, legendary CEOs like Lou Gerstner at IBM and Steve Jobs at Apple pulled off dramatic turnarounds and propelled their companies back to prosperity.

Yet many successful transformations don’t have a charismatic leader. Political movements like Pora in Ukraine and Otpor and Serbia didn’t have clear leadership out front. The notably dry Paul O’Neill pulled of a turnaround at Alcoa that was every bit as impressive as the ones at IBM and Apple. And let’s face it, it wasn’t Bill Gates’s Hollywood smile that made Microsoft the most powerful company of its time.

The truth, as General Stanley McChrystal makes clear in his new book, Leaders: Myth and Reality, is that leadership is not so much about great speeches or snappy slogans or even how gracefully someone takes the stage, but how effectively a leader manages a complex ecosystem of relationships and builds a connection with followers.

And even when we look at charismatic leaders a little more closely, we see that it is what they did off stage that made the difference. Gandhi forged alliances between Hindus and Muslims, upper castes and untouchables as well as other facets of Indian society. Mandela did something similar in South Africa. Martin Luther King Jr. was not a solitary figure, but just one of the Big Six of civil rights.

That’s why McChrystal, whom former Defense Secretary Bob Gates called, “perhaps the finest warrior and leader of men in combat I had ever met,” advises that leaders need to be “empathetic crafters of culture.” A leader’s role is not merely to plan and direct action, but to inspire and empower belief.

Myth #3: You Need To Piece Together A Coalition

While managing stakeholders is critical, all too often it devolves into a game theory exercise in which a strategically minded leader horse trades among competing interests until he or she achieves a 51% consensus. That may be enough to push a particular program through, but any success is bound to be short-lived.

The truth is that you can’t transform fundamental behaviors without transforming fundamental beliefs and to do that you need to forge shared values and a shared consciousness. It’s very hard to get people to do what you want if they don’t already want what you want. On the other hand, if everybody shares basic values and overall objectives, it’s much easier to get everybody moving in the same direction.

For example, the LGBT movement foundered for decades by trying to get society to accept their differences. However, when it changed tack and started focusing on common values, such as the right to live in committed, loving relationships and to raise happy, stable families, public opinion changed in record time. The differences just didn’t seem that important any more.

In a similar vein, when Paul O’Neill took over Alcoa in 1987, the company was struggling. So analysts were puzzled that when asked about his strategy he said that “I intend to make Alcoa the safest company in America.” Yet what O’Neill understood was that safety goes part and parcel with operational excellence. By focusing on safety, it was much easier to get the rank and file on board and, when results improved, other stakeholders got on board too.

Myth #4: You Will End With The Vision You Started With

When Nelson Mandela first joined the struggle to end Apartheid, he was a staunch African nationalist. “I was angry at the white man, not at racism,” he would later write. “While I was not prepared to hurl the white man into the sea, I would have been perfectly happy if he climbed aboard his steamships and left the continent of his own volition.”

Yet Mandela would change those views over time and today is remembered and revered as a global citizen. In fact, it was the constraints imposed by the broad-based coalition he forged that helped him to develop empathy, even for his oppressors, and led him to govern wisely once he was in power.

In much the same way, Lou Gerstner could not have predicted that his tenure as CEO at IBM would be remembered for its embrace of the Internet and open software. Yet it was his commitment to his customers that led him there and brought his company back from the brink of bankruptcy to a new era of of prosperity.

And that is probably the most important thing we need to understand change. In order to make a true impact on the world, we first need to change ourselves. Every successful journey begins not with answers, but with questions. You have to learn how to walk the earth and learn things along the way. You know you’ve failed only when you end up where you started.

— Article courtesy of the Digital Tonto blog and an earlier version appeared on Inc.com
— Image credit: Pixabay

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How A Networked Culture Drives Experian's Innovation

GUEST POST from Greg Satell

In Who Says Elephants Can’t Dance, the bestselling memoir of the his historic turnaround at IBM, Lou Gerstner wrote, “I came to see, in my time at IBM, culture isn’t just one aspect of the game—It is the game. In the end, an organization is nothing more than the collective capacity of its people to create value.”

There has been endless discussion about whether change should be driven from the top-down or the bottom-up, but that is, for the most part, a red herring. True transformation tends to move side-to-side, driven through horizontal connections among peers. The best way to create change in an organization is to empower it.

That’s why the data giant Experian invested years networking its organization and found that it paid off when it mattered most. While traditional hierarchies waste valuable time and effort pushing orders down the chain of command, networked organizations can adapt to changing market conditions with far more agility. Transformation begins with a networked culture.

An Innovation Culture Is A Collaborative Culture

One of the most common questions I get asked by senior managers is “How can we find more innovative people?” I know the type they have in mind. Someone energetic and dynamic, full of ideas and able to present them powerfully. It seems like everybody these days is looking for an early version of Steve Jobs. Yet the truth is that an innovative culture is a collaborative culture.

When Justin Hastings arrived at Experian North America as Chief Human Resources Officer, he saw it as his job to support and empower the culture. “Essentially, we run a talent business,” he told me. “My job is to not only supply, maintain and retain that talent, but to make sure those people are are motivated and see real meaning and value in their work.”

“Culture is front and center, just incredibly important to us,” he continued. “It’s the enabler of business performance. Our company is all about driving the innovation that drives value for customers. A big part of what makes that possible is that we work hard to make everybody here feel included, that the company’s success is their success.”

However, Hastings warns that building a culture takes a lot more than just some pleasant platitudes in an employee handbook, nice speeches by the CEO and company events. “You can’t just build a culture from the top down. To be authentic, you have to build your culture organically, through informal networks,” he explains.

The Strength of Weak Ties and Boundary Spanners

In the early 1970s, sociologist Mark Granovetter began researching how professional, technical and managerial workers found jobs in the Boston area. He was somewhat surprised to find that they often found work someone they knew, but not a close contact, like a friend or family member, but someone more removed, like a friend of a friend or a distant cousin. He called this principle the ‘Strength of Weak Ties’.

Further analysis shows why it works. Those who are closest to us know pretty much the same things we do, because they frequent similar places and do similar things. So if we want to gain access to new information, we need to broaden our scope and connect with people further out on the social spectrum.

Hastings noticed this principle at work in Experian’s volunteer efforts. For example, many employees participate in its “Le Tour de Experian” bike rides to benefit charity. They do it to do some good and have some fun, but Hastings saw that the bike riders were also building strong bonds across organizational boundaries and these bonds were resulting in professional collaborations that created value for Experian and its customers.

Network scientists call people like the collaborating bike riders boundary spanners, because although they form strong bonds with each other, they essentially play the role of “weak ties” in Granovetter’s research. They perform a crucial function by linking disparate parts of the organization and helping knowledge and information to circulate.

Hastings figured that he could accelerate the formation of boundary spanners throughout Experian by giving employees the opportunity to organize around things they care about. Experian clubs, like the biking group, are focused on interests, while Employee Resource Groups focus on identity, like Latino heritage, gay pride or military service.

Using Networks To Empower Transformation

When Barry Libenson first arrived at Experian as Global CIO in 2015, he devoted the first few months to getting a sense what its customers wanted. It quickly became clear that what they coveted most was real-time access to data. If he could provide that by shifting Experian’s technology infrastructure to the cloud, it could be an enormous opportunity.

Yet it could also be an enormous problem. “There was a lot of concern that we were going to disrupt our own business and that we would lose control of our data,” Libenson told me. “For years, Experian’s business model had been based on a traditional architecture. There were also security concerns.” To make matters worse, research by McKinsey indicates that roughly 75% of transformational initiatives fail.

So instead of trying to force change through, Libenson sought to empower it. Much like Hastings did with Clubs and Employees Resource Groups, he identified people within the organization that were already enthusiastic about the shift to cloud technology and made sure they were trained to implement it. Those early apostles could then help convert others.

Libenson also saw how Experian’s networked culture helped smooth the way. “Digital transformation is somewhat of a misnomer. You’re not really transforming the technology, but more importantly, the people who use it. Having a networked culture means that you can spread enthusiasm about transformation—as well as the expertise to implement it—much faster and with far less resistance than you could otherwise,” he says.

The Journey Continues

As I explain in Cascades, all too often an initial success gives way to inertia, backsliding and eventually, failure. The truth is, it’s not enough to just drive change, you also need to learn how to survive victory. You do that by focusing on culture and values, rather than on any one particular objective, so that you are constantly preparing for the next challenge.

These days, Experian is highly focused on leveraging artificial intelligence which, much like the shift to the cloud, is both a great opportunity and a potential problem. AI has the potential to vastly improve things like credit scores, but the algorithms can’t be a “black box.” To be effective, they must be auditable and explainable.

Experian’s Datalabs unit is hard at work creating more transparent AI algorithms, and making progress, but the technology will only be valuable if Datalabs scientists can work effectively with professionals from other divisions of the company. So Eric Haller, who leads Datalabs, set up a series of seminars to connect with the rest of the company.

“To implement this technology requires a certain amount of sophistication that is relatively rare,” he told me. “So not only were we putting information out there, through the connections we made we were also able to identify expertise throughout our company we were not aware of. Those new relationships have already opened up new possibilities for collaboration.”

What’s interesting and salient about how the network culture was built at Experian is how it all seems so mundane. Many firms have clubs, employee groups and volunteer efforts. Seminars aren’t particularly unusual, either. Yet it’s not any one program or platform, but how those initiatives are optimized to widen and deepen informal bonds across the organization, that makes the difference.

The truth is that, today, competitiveness is no longer determined by the sum of all efficiencies within a business, but the sum of all connections.

— Article courtesy of the Digital Tonto blog and previously appeared on Inc.com
— Image credit: Unsplash