digital
/

The digital company in search of new forms of management

Start
What if companies and public institutions were unable to succeed in the digital transformation because culturally its principles are too far removed from the values and models they have adopted and reinforced for decades? This is the thesis of the article Gilles Babinet wrote in Harvard Business Review. Based on analyses of several hundred companies (eCAC with Les Echos, and Digital ETI with EY and APAX), he shows how much the stakes of human capital and management model are determining factors in the digital transformation.
 
L’The "digital enterprise", and the resulting model, is often perceived as a "digital company". as a mixture of productivist pragmatism and Californian utopia...and if this is not totally false, it sums up somewhat summarily the history of the new forms of management in force within these companies.
Of course, one cannot deny the importance of the radical and utopian thinking that led scientists - financed by the US military - to invent Arpanet, which later became the Internet; it is this same utopianism that led Steve Jobs to want to give a computer to every American in order to fight against the lobby of military corporatism that he perceived in the association of IBM and the US military. So very early on, a form of culture underground has existed within this Silicon Valley, inviting to rethink the world and, by induction, management models using the vector of technology.

Novocain-free molar extraction.

However, observation of the practices of Silicon Valley companies suggests that it did not exist, at least until at least the 21st century.century, of a homogeneous model within the most emblematic companies of this ecosystem.
For example, one of the gurus of the management model of technology companies - which Steve Jobs has largely inspired - is none other than Andy Grove, the founder and first CEO of Intel, for three decades.
Andy Grove was famous for his tough and militarily organized management. For former VMware CEO Pat Gelsinger.A session with Andy was like a molar extraction at a dentist who refused to use novocaine".
Andy Grove wrote the best-selling book "Only the paranoid survive."The man who has remained famous for his praise of stress and brutal confrontation. Subsequently, however, in his other book " High Output Management "It clearly highlights common principles with those of digital companies: transparency which he considers to be an essential managerial virtue; as well as measuring performance through datawhich he sees as fundamental; the thought of breaking up, which it enshrines as a key principle of its management model and which is an imperative invitation to empowerment individuals and teams. This empowerment will be consecrated in the last years of his reign, with the launch of numerous small-scale projects, in a logic of breakthrough innovation. Andy Grove left Intel's management in 1996, well before the emancipation of the millennium generation, and at the very moment of the emergence of the Internet revolution.

Be inspired by the Agile spirit

Whether it is Cisco or Hewlett-Packard, we also find operating processes that are quite similar to those that make up a classic company, with highly structured hierarchical processes, directional reporting modalities, and so on.
So it's not Andy Grove, or even another Silicon Valley icon, who will inspire the new management models, but rather a progressive iteration, the beginnings of which can be found in the communities of developers who first rethought the way the company operates. As early as the 1950s, programmers were already considering revolutionary development methods in the cybernetic world, "iterative", delegating significant power to computer scientists.
 
However, for decades, these approaches have had only limited impact because they are so revolutionary on the one hand, and because of the lack of structuring tools on the other. Large IT service companies will long prefer models involving business analysts. It was in the Boston area during the 1990s that the work of Jeff Sutherland and Ken Schwaber - the inventors of the Agile method - s, once again bring out the idea that developers who would no longer work on tasks but on objectives would be much more efficient. What will be new is that with the Internet, it is now possible to synchronize large teams of developers and test faster than before.
 
In 2001, Jeff Sutherland and Ken Schwaber promoted "The Agile Software Development Manifesto", which marked a first turning point. Many companies, ICQ, Paypal but also Motorola and others less well known, observe that relatively similar methods (eXtreme Programming, Adaptive Software Development and Feature-Driven Development), generally inspired by the Agile spirit, allow significantly higher levels of productivity than before.
 
It is remarkable to note that large digital companies are homogenizing their managerial practices around a few simple principles and especially harmonizing the use of software tools that are now easy to deploy because of the cloud. During the 2000s, three tools from the cloud will gradually revolutionize management models, as part of this "Agile" wave of employee empowerment: Analytics; communication tools such as Instant Messaging; and Project sharing tools.
 
1- Analytics: previously the exclusive domain of the major publishers of corporate information systems, they have become widely available since the birth of the famous Google Analytics. Now, they allow companies to spread a culture of data and benchmarking in a simple way, through the cloud. The whole company, whatever the expertise of its employees, can therefore have a detailed understanding of generic or "corporate" issues as well as data points that only concern a small group of individuals. Thus, in digital organizations, the data, presented in the form of visual dashboards, largely structure the corporate culture and are often the judges of the peace when it comes to increasing an investment or, on the contrary, stopping it.
 
2- Instant messaging has, in recent companies, often almost completely replaced e-mail.. If the generations after X criticize them for being too intrusive, they are overwhelmingly supported by those who follow them. In addition to being instantaneous, they make it possible to classify the exchanges of information by subject and to have a clear history of them. Thus a newcomer to a given project could, provided that he or she is familiar with this type of tool, understand its full scope and complexity in just a few hours. The most famous of them all, Slackis so widespread that some star developers in Silicon Valley refuse to work with certain companies if they don't have it. This type of tool is no longer restricted to technical functions, but adopted by all digital companies, from CEOs to interns.
 
3- Project sharing tools. Whether companies designing aircraft engines with 3D modeling tools like General Electric or developing the computer code for e-commerce sites like Amazon, the cloud revolution has made it possible to generalize tools with a level of collaboration and transparency never before achieved.
 
These three tools are obviously highly complementary and generally include functionalities that make it easy to navigate from one to the other. They have induced a new management culture, which includes some strong notions:
– A very advanced transparencywhich makes it very easy to see what has been achieved by the other employees. The corollary being obviously a very important capacity for control and potentially for coercion.
- An almost religious culture of KPI, mainly introduced by Analytics.
- Strong corporate cultures and rules, usually implicit. It is obvious that if, with the development of chat tools (instant messaging), everyone started to communicate at any time, the concentration of employees and ultimately, productivity, would be strongly affected.
The mistake usually made is to imagine that it is enough to integrate these tools to become a digital company. This is obviously a shortcut that one should be careful not to take because de facto, the level of technological mastery that must be reached before accessing the data of a so-called "traditional" company and being able to free up essential data is particularly demanding; data that will be used both in Analytics and in projects. The decompartmentalization of organizations, the transition to "data gap" type management and the implementation of APIs are some of the steps to be taken.

A prerequisite, adopt project mode

Moreover, these tools only reach their full potential when if the company has organized itself around project modeand as widely as possible. It is difficult to imagine the cultural and managerial obstacles that must be overcome to reach this situation. The most important consequence of the introduction of these tools is therefore the evolution towards a project mode, where the tools largely replace the hierarchy, the "command and control" which is the characteristic of traditional organizations. Hierarchical control still exists in digital companies, it is much less visible and, as Facebook boss Mark Zuckerberg summarizes, its role is more "to solve problems that can no longer be solved by project teams and [...] to control the long-term strategy".
 
Certainly, cultural resistance to such a development is strong: if generations Y and beyond are more compatible with the principles of transparency and accountability - the act of rendering accounts -, transitions still need to be adapted on a case-by-case basis. As Philippe d'Irbarne observes in his book "... The Logic of Honour "The Protestant Anglo-Saxon culture, which is keen on transparency and favours the notion of "fairness", is probably better adapted to the digital business model than the very implicit "code of honour" that would mark Latin, and particularly French, companies.
 
It is therefore not inconsistent to consider that it takes a certain amount of time for a traditional company to move to a digital mode, bearing in mind that technological transformations are infinitely easier than those affecting a company's culture or DNA.
The original of this article appeared in Harvard Business Review France - March 2018
 

0 Comments
Inline Feedbacks
View all comments
blockchain
Previous article

Blockchain: disruptive innovation or uncontrollable risk?

dystopia China
Next article

China is becoming the world's first digital dictatorship

Latest articles from Mutations du Travail

JOIN

THE CIRCLE OF THOSE WHO WANT TO UNDERSTAND OUR TIME OF TRANSITION, LOOK AT THE WORLD WITH OPEN EYES AND ACT.
logo-UP-menu150

Already registered? I'm connecting

In order to contribute to the information effort on the current coronavirus crisis, UP' proposes to its readers a free entry to the latest published articles related to this theme.

→ Register for free to continue reading.

JOIN

THE CIRCLE OF THOSE WHO WANT TO UNDERSTAND OUR TIME OF TRANSITION, LOOK AT THE WORLD WITH OPEN EYES AND ACT

You have received 3 free articles to discover UP'.

Enjoy unlimited access to our content!

From $1.99 per week only.
0 Shares
Share
Tweet
Share
WhatsApp
Email
Print