I was recently listening to a podcast interview with the former CEO of BP, John Browne. He explained how British business was forced to go through a massive transformation in the 60s and 70s to catch up with growing international competition.
Prior to this transformation, Lord Browne claimed that most UK businesses were run by “talented amateurs” — people who landed senior positions based on the universities they studied at, or the roles they inhabited during the war. These were obviously smart and talented people, but they had very little knowledge or experience in the specific domains they were hired to perform. So you’d have ex army officers running technology departments, or classics majors looking after procurement.
This approach would have carried on for a long time — and if you currently work in a traditional business you may still see echoes of this industrial age thinking — had globalisation not put an end to this.
Lord Browne explained how increasing pressure from US companies forced the UK to go through a dramatic period of transformation, getting rid of professional managers and bringing in talented and knowledgeable experts. Over a 20 year period, British business became a lot more efficient, and was able to compete in a global market again.
Listening to this podcast, I couldn’t help but see echoes in the current phase of business transformation. Businesses in the UK and around the world are again finding themselves under heavy competition from American companies — this time in the tech sector.
These companies have ditched the traditional corporate hierarchy, in favour of self-organising pods that focus on solving specific problems with laser accuracy. These pods are filled with talented experts, and given the autonomy to solve the problem in the most effective way, with mantras like “fail fast” and “outcomes not outputs”. The managers are there to support and facilitate, rather than to direct or punish when things go wrong.
Many UK companies are going through a process of business transformation, led by the the opportunities presented by digital technology. The majority of these companies are focussing on mode one digital transformation; simply automating once manual processes. This is low hanging fruit, but the REAL opportunities are in mode two digital transformation; adopting the culture and practices of successful technology companies.
Side note: for more on the two modes of digital transformation, have a read of my recent blog post on the subject.
Unfortunately changing culture is a lot harder, and takes a lot longer, than simply buying and installing some now software tools. It’s also very difficult to move from a command and control mentality to one of command intent, when those commanders are the ones leading the change and have everything to lose from a truly successful transformation.