Without a culture of trust, no agility. Cargo cult yes, but no agility. And without agility there is no chance of at least surviving digitalization, let alone benefiting from it. In an agile organization, responsible and empowered people can quickly make customer-oriented decisions in decentralized structures. This requires trust. They make these decisions in complex and uncertain environments, validate them through rapid implementation and learn particularly from failures. And that needs even more trust.
In the face of a variety of new technologies such as artificial intelligence (which is not such a new concept, but is only now practically usable through sufficiently large computing power) or blockchain (which has been around for 10 years as an idea and first practical implementation with Bitcoin), many companies are increasingly feeling the pressure of digitalization as a threat to their established business models. This change would be difficult enough if the new business models were clear and “only” a question of execution. However, the digital business models are not clear and probably new business models have never been like this before, but rather a question of trial and error. Or in the words of Thomas Edison: “I did not fail, I only found 10,000 ways that did not work.”
If the rate of change on the outside exceeds the rate of change on the inside, then the end is near.
In this uncertainty (and one can certainly add to it the political situation with Brexit in Europe and the renewed protectionism of the USA under Donald Trump) more and more successful and therefore large and, in their size, rather inflexible companies are striving for more adaptability. Transformations therefore are underway everywhere: Agile transformation, digital transformation or both at once. Flexibility should increase, one wants to and must become faster and more effective. That’s why Silicon Valley is travelled up and down and of course Spotify is not left out. And then they are busy transforming, reorganizing and preaching change.
The greatest danger in times of turbulence is not the turbulence, it is to act with yesterday’s logic.
Peter F. Drucker
However, the key to the success of such a transformation is the change in culture. The foundation for agility is a culture of trust and based on it a learning culture in which the maxim is trial and error rather than plan and control. This culture of trust could also be observed during visits to those agile and digital pioneers. At Spotify, everyone simply takes the required new equipment such as keyboard, cables and mouse from an open cabinet and Netflix offers an “Open Vacation Policy” so that employees can decide for themselves how much vacation they need. These practices are (often bewilderedly admired) manifestations of this important culture of trust. In agile organizations there is also this pattern of trust in responsible and empowered employees, who make decisions as close to the place of action and customer as possible rather than as high up in the hierarchy as possible. And so Reed Hastings, as CEO of Netflix, rightfully prides himself not making any decisions. And that’s a difference that makes a difference.
We aim to make mistakes faster than anyone else. But failure without learning is just: Failure!