Blogs

Derek Bishop

Director

Digital leadership

Date added: 01st Oct 2014
Category: Innovation Culture

The attitudes and values, beliefs and behaviours displayed by leaders of old are simply not relevant in a digital age. Just as an organisation has to be seen to change to convince observers that its products are different, so too do leaders have to be seen to change in order to be able to cascade new beliefs and behaviours throughout the organisation.

It’s funny how things turn out isn’t it?  Let’s be honest, history would be far more boring if everyone designed their projects with a specific aim in mind and only acted when they could fully anticipate the consequences of those actions.  Take Charles Babbage for example.  He only set out to create a machine which would accurately calculate mathematical tables and yet the work which he started has resulted in the internet, social media and a whole new way of doing things.

Admittedly, the importance of much of Babbage’s work was lost when he died and is only comparatively recently being recognised. But once a genie is out of the bottle then it can’t be easily put back in and the ripples which Babbage started opened up the potential for computer science to follow on.

Actually, it’s not just in the field of computing that we have a lot to “thank?” Babbage for.  He propounded the theory of dividing the workforce into differing skill levels, arguing that if a skilled worker had to also undertake less skilled tasks then that was a waste of resources.  He also pioneered the theory that the training of workers represented a cost to the company and that by simplifying tasks the company could achieve a prime goal of minimising the period taken to recover those training costs.

Training as a cost to the organisation rather than a long term benefit, demarcation of job roles, employees as human capital; whether or not Babbage’s theories were right for their time, they certainly need re-examining now.  And one of the key reasons why they need re-examining is the other Babbage legacy, that of the internet age.

We now live in an ‘always on’ society in which the lines between work and home are increasingly becoming blurred.  The public now expects instant availability, swift responses and products which are not only designed with users in mind but co-created with their end-users.  The potential for creating game-changing products and services is vast but so is the potential for crashing out as unintended consequences come to light.  In any sector this is a worry, in a heavily regulated sector such as financial services the danger is that the fear of consequence will outweigh the potential for good.

In our article “Digital promotion” we examined some of the issues surrounding the use of digital platforms and the FCA’s consultation into the supervision of financial promotions issued via social media platforms.  The article largely concentrated on external outcomes, the problems associated with customer interactions and promotions.  But there is another aspect of the digital culture which is far more important and that is the need for organisations to gear themselves up to embrace an innovation culture which will co-create financial service products which are ethical and have the long term interests of consumers in mind.  And with all the scandals of recent times it is no easy job to convince the regulator and the public that new products are safe products.

One of the answers to this dilemma is to completely turn the organisation round; to change the culture from one of short term profits allied to high salaries into one in which every person and every process is dedicated to creating innovative customer service.  Only when ‘me first’ is replaced by ‘customer first’ and ‘long term profitability’ replaces ‘profit now’ will organisations truly be able to deliver innovative products which will satisfy the regulator and deliver what the customer wants.  But a change of this nature requires a seismic shift in leadership.

The attitudes and values, beliefs and behaviours displayed by leaders of old are simply not relevant in a digital age.  Just as an organisation has to be seen to change to convince observers that its products are different, so too do leaders have to be seen to change in order to be able to cascade new beliefs and behaviours throughout the organisation.

We’ll be honest.  One of the factors of an innovation culture is that sometimes failure happens, but in an organisation which puts customers first, failure of a product should be accounted for in the way in which redress is swift and appropriate.  And in an organisation which seeks to innovate, to create game-changing products the chances of failure are far smaller than in a hierarchical ‘profit is all’ organisation.  So leaders should not be afraid of failure, but they should be afraid of a world in which the sins of old are repeated simply because they have not acted.

Babbage’s ideas were a product of his time.  Now a new time, a digital time, has arrived and leaders need to step up, to create internal cultures in which new ideas, new ways of thinking, acting and behaving can flourish.  It won’t happen with a few slogans or a slanted report sent to the regulator, it won’t even happen if you start engaging with customers on social media but it will happen when the internal culture is so changed that the customer really does come first.

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