Connect more people. Create more value.

Digitisation has rewritten the rules of business and the key to success in this environment is connectivity.

Through more than a decade of research and practice, we’ve identified three key attributes for enterprises to becoming more connected and creating more value through these connections.

They are values-led.

Values-led – or purpose-driven – organisations that by seeking to make meaning not just profit, are more successful at generating loyalty from their people and their customers.

They are value building.

They know their worth isn’t just in its physical offerings, it’s in its capabilities, its culture, its reputation and in relationships built on trust.

They are value sharing.

They realise they only need to access, rather than necessarily own or control, all the assets that produce value and they find creative ways to operate in an increasingly collaborative economy.

Are you ready to take advantage of the connected economy?

Work with Meta Management in the studio where we design, develop and help you implement the structure, processes and programs that will position your organisation for success.

Join us in the school to build the skills to maximise you and your teams’ capabilities for working in a digital world.

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IN THE SCHOOL

Millennials: love them or hate them but don’t...

28 August 2016

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In the studio

Cargo Crew sets its eyes on the future

featured

The digital factor: new rules for success

digital

breakthrough

confidence

design

align

open

human

THE DIGITAL FACTOR

Take advantage of a world gone social. The economy is digital now. We’re all connected, networked, searchable.

Getting digital right means new customers, new revenue streams, better ways to market, and much, much closer relationships.

digital

If you don’t want to embrace digital , that’s okay – but your customers and users will, and the best talent will. So the people your success depends on will move on without you. Maybe you think you’ll be fine because you treat them well. Make no mistake; your digital competitors are reaching out to them – and not just your traditional competitors, but ones you may never have dreamed of, like an innocuous little app sitting behind a pretty icon on a screen. Just because people love you, doesn’t mean they won’t leave you.

The real benefit of digital is the ability it gives you to connect with ‘your people’. Your people work harder for you because they don’t try to bring you down; they’d rather build you up so they get to be part of your success.

You don’t ‘do’ digital.
The opportunities offered by digital do not fall your way just because you post on Facebook or join LinkedIn groups, or use Yammer or Slack, or run a blog, or sell online – these are just tools and spaces. Digital is a way of thinking, relating and communicating.

When you learn how to think, relate and communicate with a digital mindset, you have the essentials for operating successfully in times that are very different to the old world.

Technology has made the marketplace smaller and more accessible. Market power depends less on self-contained organisations and the resources they command, to connected groups willing to collaborate and pool resources. Business models that take advantage of connected and collaborative ecosystems will be the key for many enterprises – particularly those facing disruption – to move beyond traditional and transactional business models into new sources of growth and revenue.

BREAKTHROUGH CULTURE WHERE VALUES DRIVE GROWTH

Just as through history, thinkers, artists and inventors challenged their existing world and re-ordered people’s lives and beliefs, a digitally-driven new Age of Enlightenment has arrived.

breakthrough

In this New Age, people seek transparency and connectivity. They want to feel a sense of purpose, to feel engaged, and they believe living should bring fulfilment. Sustainability is challenging consumerism, user-generated content is replacing corporate spin, things can be smart, and commerce is going social.

How does your enterprise succeed in this New Age? By making itself accountable to its values. When its values are reflected in every facet of what it does and says, its purpose shines through, and that attracts an audience that wants to be a part of that purpose. Values are the basis for a breakthrough culture.

A breakthrough culture is where people, by knowing what the enterprise stands for, get behind it and advocate to their friends. They help your enterprise become more than the product of the things it supplies. A breakthrough culture is having a social architecture that harnesses the talent of its people, not just increases the volume of its production. A breakthrough culture offers both a value proposition and a values proposition. There is no conflict between the drive for profit and the purpose it seeks to fulfil.

Breakthrough is the goal to be bigger in order to do better.

What happens when you put values before profits?

higher net
income

better
average
annualised

greater return
on assets and
sales growth

better stock
performance than
the S&P 500

greater stock
price growth

(Sheth, J. Firms of Endearment; Kotter, J.P. & Heskett J., Corporate Culture and Performance; The Best Companies to Work For; Denison Consulting, Proving the Link)

The shift has happened and the science is in – if you want a business that’s worth something, you have to stand for something that matters.

GROWING ENTERPRISE VALUE IS THE OUTCOME OF ORGANISATIONAL CONFIDENCE

With technology increasing access to and pushing down the costs of the physical factors of production, it is the non-physical, intangible components of the enterprise that will create sustainable value and defend it from competition and disruption.

confidence

In the old industrial (physical asset-based) economy, management tools were designed to make everything measurable. The measurable, so goes the wisdom, is manageable. At senior levels where results can be aggregated into concrete numbers, managing performance resembles pulling levers in a factory. At middle to lower echelons of the organisation, managers are expected to deal with the invisible such as behaviour, culture, relationships and ideas, while having to justify their positions with work that is visible. There is little recognition for the deep work that develops organisations beyond the reactive. The organisation is blind to the losses it suffers because without numbers there is nothing to count, therefore nothing to miss.

It means today’s managers may have never had to develop the skills to produce results from the intangible. The names we give this era – like the sharing economy, the values economy, the collaborative economy, the peer economy – tell us where value is generated but unless managers know how to participate in the opportunities offered in this environment, most enterprises will be, at best, transactional.

INTANGIBLE ASSETS: the assets that have no physical substance, which are used by the enterprise to improve its competitive position, and that are capable of creating more enterprise value than can be achieved by physical assets alone.

The percentage
of the value of
firms on the
S&P500 that are
comprised of
intangible assests
(in 1975 it was
17%)

The percentage of
companies without a
robust system for
managing intangible
assests (even though
96% think they are
important for high performance)

The value of all
growth in the US
created by intangibles
between 2001 and
2003 (it was
30-40% throughout
the whole of the
1900s)

The estimated global value (in trillions) of listed companies in undisclosed intangible assests - compared to $11 trillion that are disclosed (i.e. listed on the balance sheet)

The catalyst for success in this new era is surprisingly simple: confidence. When internal uncertainty exists, people slow down , take safer options, avoid making decisions, hide behind bureaucracy, become conditioned to helplessness, and focus on their individual needs. A confident organisation is challenged, not stymied, by the forces and speed of change. It is comfortable with uncertainty because it has the certainty of the values that cement its relationships in the market. It operates with open borders so it can draw on unlimited outside capabilities. It learns to innovate and course-correct as it goes instead of hoping incremental improvements on the past will do.

People communicate often and well because it is safe to do so. A confident organisation succeeds because it recognises strengths to build, not looks for ‘performance gaps’ to fix. Confident organisations value the intangible and don’t fall for numerical illusions of control that are the cause of so much stress, dysfunction, busyness and tunnel-vision in the workplace. People may look busy, but they are not productive.

Confidence comes from being sure of your purpose and identity. It comes from building trust. When managers manage for organisational confidence your people know what to do and will make right decisions for how it should be done. They will respond to your customers to give them the experience you promise not the standardised version you dictated. Confidence comes when people know the value of their contributions, even when they are invisible.

Not strategy, not goals, not leadership, not retention. The organisation of the 21st century focuses on alignment.

align

To many, comfortable in the old, known ways of managing an enterprise and doing business – with their defined strategies, structured hierarchies with set positions and places for everyone – the unpredictable and dynamic world today looks like chaos. Others see opportunity. Like surfers on waves or hang-gliders in the wind, without the swirl and currents around they could not practice their craft. It is the environment in which their community comes together. One man’s turbulence is another man’s progress.

And so it is for enterprise in the 21st century. There is no pretense of controlling things that cannot be controlled, or measuring performance of yesterday to set the actions for tomorrow. As Albert Einstein never said, “Not everything that can be counted counts, and not everything that counts can be counted.”

Instead, the certainty in all the changes and new technologies comes from alignment. Alignment between a vision, a purpose, the culture, the walk, the talk, the brand promise and the user experience provides the steady ship and the clarity of direction around which efforts collect.

Many organisations think they are aligned because there are lots of agreement and no visible conflict. What they are really seeing is consensus, compromise, compliance, even complacency – not alignment. The beauty of alignment is it allows for dissent and diversity. Because what is negotiable and what is not is clear, people are confident that the things they choose to challenge and the risks they choose to take are in line with the objectives of the enterprise. Authority and support and not two ends of the good/bad spectrum, they are simply checks and balances they can rely on.

Organisational alignment has been equated with organisational health which leads directly to improved organisational performance. Consulting firm, McKinsey, that has been studying the impact of alignment on organisational health for over a decade, calls it ‘the ultimate competitive advantage’ that drives ‘at least 50 per cent of any organisation’s long-term success’.

EXPERIENCES DESIGNED FOR THE WHOLE ‘SELF’

Now that an enterprise’s most pressing problems are those of relationships and behaviour and not so much of production, it cannot keep going back to the management tools of old for answers.

design

As economies advance, the concept of ‘basic needs’ changes. Self-expression, personal fulfilment, interconnectedness, personal identity are now the drivers of the decisions we make about the work we do, the people we associate with, and the things we buy. The 2008 Global Financial Crisis was a catalyst for this new mindset, and digital technology makes it possible to act on our new awareness of ‘self’. It has allowed us to integrate our beliefs with actions, for example: life purpose AND employee, creator AND consumer, activist AND investor.

People today evaluate their relationship with an enterprise by their experience because experience is the point where all the facets that make up their ‘self’: the rational (cognitive), emotional (affective) and purposeful (conative), combine.

Traditional management approaches like strategy and goal-setting, date back 50 years or more when the key to engaging people was logic and perception. It relies on analytical thinking which is limited both by the fact that it has input only from the few whose position in the organisation meet seniority criteria – often those furthest from the customer experience. It is also language-based, which means it works through the part of the brain most susceptible to bias and short-term thinking.

To deal with problems of experience, management tools today are design-based. Design considers both the physical components of a problem and the experiential. Using visual stimuli, cognitive and emotional information are processed together to enable creativity and deep thinking.

Design thinking does not create theoretical futures with targets to achieve regardless of the actual environment. Instead it ideates the possible solutions for achieving a desired future state.

If you are still struggling through sticky problems with ideas or analysis, the answer may be in the design.

ORGANISATIONS ARE REPLACING THE POWER HIERARCHY WITH OPEN, INTER-RELATED SYSTEMS

Top-down hierarchies were not made for an environment where the next competitor or customer could be adistant world – physically or culturally – away.

open

The degree of interconnectivity and pace of change in business makes the notion that a central management team can see, plan for or respond to, all the possibilities at best, fanciful.

Recognising that more suitable approaches are needed is behind the rising research and knowledge on open systems organisations and inter-organisational relations. Both fields consider an organisation as a system connected to the external environment. Inside the system are not dependent internal functions, but interdependent sub-systems, i.e. organisations in their own right. Enabling these sub-systems to form their own relations with the external environment is one of the keys to organisational performance.

The managers who will contribute most in the open/inter-related organisation are those with the skills to foster a network of internal and external relations. They will be able to configure and organise activities and resources in the way that creates the most value. To them, the network is the organisation, and their success lies in their influence within it.

Teams, too, need new skills as their work becomes less routine and more dependent on collaborative effort. As technology develop so too will the ways in which collaboration occurs: in on-going and one-off arrangements, with on-site and remote members, in virtual and ‘third workplaces’, and in roles that do not fit neatly into traditional departments and positions. Without fixed roles and tasks, teams need the business acumen, analytical and organisational skills, and social intelligence to apply themselves quickly to the problems they are there to solve.

The fact is most exciting new opportunities and lurking dangers will come in previously unseen forms, and it may take a while to recognise them. You will inevitably need instant access to expertise and resources outside of your organisation, and you need to convince them they should be working with you. This means your ability to respond is directly correlated with you ability to collaborate.

ADAPT BUSINESS MODELS TO SHARE IN MULTIPLE SOURCES OF VALUE

We teach children to share because it multiplies the benefits (such as a toy played by one becomes a game played by many), which in turn develops their ability to build stronger relationships, important for success in life.

Business models based on shared assets for greater overall value are not new. Franchising and licensing, for instance, are business models based on sharing intellectual property.

Now thanks to digital technology, what is new is the ability to build business models that enable multiple players to participate in ecosystems of a size and complexity previously too unwieldy to make profitable. While value chains produce diminishing returns, enterprises are able to generate greater results through potentially unlimited connectivity with low transaction cost, and in the process they are changing the shape of entire industries.

The music industry is one that has experienced such a shift. Once consumers would purchase music as a recording; today they purchase access to experience music. The artist > producer > retailer supply chain is being progressively replaced with an ecosystem that includes devices, platform, apps and other listeners who share, rate and upload songs.

Whereas supply chains focus on offering consumers product and service features and benefits, new business models identify the experiences customers seek and utilise multiple players (and disregard industry borders) in their quest to deliver, expand, replicate, consolidate and reinforce that experience. As more enterprises play across industries – is Airbnb an accommodation company or a software company? – traditional industry incumbents will find it more difficult to predict the source and timing of their disruption.

Few enterprises can compete alone against ecosystems of diverse players, each using their unique abilities and insights to simultaneously collaborate and compete, and changing the landscape of competition for everyone else. For this reason business strategies have lost their muscle in setting up enterprises for success while business model innovation supports them to becoming sleeker, more dextrous and nuanced in their ability to capture the loyalty of the consumer.

Business model innovation propels enterprises to greater performance

When human resources will no longer do.

Until there is a replacement discipline for human resources Meta Management call this inter-organisational relations form of employment ‘Horatio’.

human

That people are an organisation’s resources has been rejected by many for some time: by employees who want to be appreciated for more than their job titles; by employers who understand the benefits of people being more engaged; even by human resources professionals themselves who see their role to be more than administration and compliance.

But the death of human resources has not come to pass as predicted. The reasons may be many, but the underlying fact is while there may be changes in name (‘People & Culture’, ‘People Operations’, ‘Employee Experience’ are some) and in practice, employment is still defined by the master-servant relationship. Modern times have obscured the common law roots but the foundation remains that, “The servant works at the direction of the master and engages in work for the benefit of the master. In return, the master compensates the servant for his or her labor. The master is responsible for the servant’s actions because the master chooses the servant, trains the servant in his or her duties, and supervises the servant’s labor.” (Society for Human Resource Management)

The rise in knowledge work is breaking the old master-servant paradigm of employment. With physical work, workers dedicate their time and effort only to the employer. With knowledge work the employer merely pays for the benefit of – leases – workers’ knowledge; it does not own their knowledge.

Knowledge work puts workers increasingly on equal footing with employers. Careers are much less a (employer-dependent) ladder, and much more stepping stones in a purpose-driven (usually for social good) life. Workers choose employers as much as employers choose them. They define their own personal brand rather than merely being a blank canvas for their employer’s. They consider their employment an alliance, a partnership or a collaboration with their employers. In short, workers are becoming independent organisations engaging as equals with, and not servants of, employers.

This world of employment uses data to match its resourcing requirements with the objectives of the organisation. Once those ‘requirements’ turn up as people they are treated as relationships, with both competing and complimentary objectives, to be developed in a culture of shared meaning and aligned purpose – not resources.