50% of the traditional companies on the Fortune 500 have disappeared since 2000. One of the reasons so few market-leading companies are able to disrupt themselves is the cultural resistance to failure. But increasing complexity of today’s industries makes those holding on to this resistance obsolete. Jim Shaw, former CDO at Bentley, talks to us about how to create a fail-fast culture that embraces safe risk-taking and rapid feedback loops essential to succeed in leading digital transformation based on his experience of transitioning Bentley from an automotive manufacturer to world-class service platform.
The Leadership Network: What’s your take on the ‘fail fast’ mantra and how does it fit into established organisations like Bentley?
Jim: Fail fast comes from a start-up environment where you need to change direction as soon as you realize that you have better investment opportunities. When you talk about failing in large organisations, where there are several separate silos, failing gets a negative connotation.
“In a large organization I think it’s better to talk about testing ideas rather than failing fast, because the context is just wrong.”
I work together with different members of the board and they tend to be a bit old-school. They rely on what they know, and they struggle with adapting to new hypothesis. I think the younger crowd has this way of thinking in their corporate tool kit while the older generation just keeps relying on what they know and have always done. The modern generation realizes that digitisation is just a necessary step that has to be taken in every organisation.
The Leadership Network: What would you personally say or do to make your teams more comfortable with that change?
"Excellent organizations, that really want to take their company to the next level, set a massive transformational purpose."
If you want to get everybody in the organisation thinking this way you first need to understand what really drives the transformation process and then set a mission for the journey. Secondly, you need to use collaboration in order to engage people. It used to take companies 10 to 15 years to change in a fundamental way, whereas we now know how fast organizations can change and how fast they need to change because the competition is getting faster day by day.
The Leadership Network: How do you differentiate between a superficial failure (like, someone not following the process) or self-serving, when the market is just not ready for the product? When does it become blameworthy?
Jim: That mindset of test and learn and fail fast really makes employees more comfortable with experimenting rather than jumping into the full development of a new business model, that no one really feels that confident about.
“You need to change this learned behaviour of fearing mistakes into something that truly supports the test and learn approach.”
The Leadership Network: Speaking about mistakes, would you mind sharing the biggest mistake you’ve made while working at Bentley and how you managed it?
“The biggest mistake I have made at Bentley has been consistently not doing things quickly enough – acting too slowly.”
You either accept the inertia of this large organization and not challenge it enough or pivot too slowly from one idea to the next. I have learned to get people up to speed fast and allocate a specific period of time for the experimentation to enable people make decisions faster.
The Leadership Network: It’s being said that established companies want revolutionary results, but they don’t want the revolution, that directors often talk about long-term investment over dinner instead of on the record. What’s your view on this?
Jim: Again, I think if you empower the people within the business to bring about change, they are the ones who will help change the organization. A lot of people think you need to digitise the business first and once everyone aligns you can start innovating, it’s the other way around and leadership has to recognise that.
“I think there is always a journey and people are the biggest part of that journey.”
It is very simple for executives who think that it is just about the technology to fail. The people in the company need to really subscribe to the large transformational goal and need to go on the journey and have an understanding of that journey. If they are not on board, you will find that everything will take a lot longer.
The Leadership Network: How do you create this feeling of emergency for change in people when things are going well?
Jim: I would like to go back to the Masterclass I attended in Seattle last December “Leading the Digital Enterprise” when I visited Amazon. We learned a lot about how they put time and thought into a project upfront in order to lay out what they want to achieve. I think this is a prerequisite in order to be able to know when you fail and when you succeed. It can also really convince people to commit because they see what the goal ahead is.
The Leadership Network: Is that what you did with the teams at Bentley?
Jim: I have definitely started this process. We have a very solid innovation culture, but we are just starting to bring everyone on board, however not across all areas of the business. It is nearly impossible to connect everyone with limited resources.
The Leadership Network: What do you think the impact of Artificial Intelligence (AI) will be on the workforce?
Jim: AI can achieve a lot for us, especially if it takes away the mundane, such as working with spreadsheets that a lot of people complain about, so that we can concentrate on the things only humans can do.
A lot of organizations also have a meetings culture, where people have to be at meetings just to be there without anyone stating the objective of the meeting clearly enough. If you could regain this time by using robots like chatbots for example, we would get more efficient. The main usefulness of AI lies in looking through vast amounts of data and that’s where humans and AI need to work together to achieve really great results.
But AI doesn’t have the emotional intelligence needed for decision making and there is always a part of a product or service that needs to be done by a human.
The Leadership Network: What do you think the workplace will look in 10 years?
Jim: It will definitely not look like today’s 9 to 5 jobs, that’s for sure. I think remote working and distributed work are already more and more widespread. Contracts will also keep changing and people with defined skills will increasingly come together for certain projects. There will of course always be a necessity for a steady state part of a business, where we will still see more traditional job types.
The Leadership Network: Do you think that ultimately there will be job losses?
Jim: I think times will change and time will be used differently, but I don’t think we will see shrinking workforces.
The Leadership Network: If there could be one thing you would take away from your job with AI what would it be?
Jim: It would be choosing which initiatives or companies to engage with, but I don’t think AI has come this far yet. It would really free up a lot of time for me though.
If you missed last week’s feature with Hugo Boss Managing Director on how he transitioned to a smart factory, you can read it here.