Innovation

Trust, Innovation and the Future of Digital Work

In the new entrepreneurial work culture, people have to innovate through experimenting and taking risks. Employers need to demonstrate the trust factor, namely that failure is acceptable. If large firms don’t get this right they will fail at digital work.

November 23, 2016

First some background

I have researched the digital work environment in organisations for 10 years. Approximately 300 organisations around the world have answered over 100 questions in annual online surveys since 2006.

My quest over these ten years has been to put some data on the topics people generally talk about in a narrative way – what is digital, how do we do transformation, what does it mean to create new work practices? A lot of this dialogue is about opinion whereas over a decade my trusted advisors (I call on a new Advisory Board of 10-15 experts every year) have helped me shape some facts.

This guided research is based on an evolving survey population with a large common core: there is a 60-70% return rate of participating organisations over a three-year span, and some have participated nearly every year. The 10th edition included 311 people representing companies from 27 countries.

For the last two years the focus has moved from the digital workplace to the organisation in the digital age, a subtle but significant shift where culture, leadership and work practices—internally and with customers—are critical dimensions.

In 2013, I defined a Foundational Framework—a comprehensive view of the different aspects of the organisation in the digital age. The Framework is defined around three perspectives: people, workplace and technology and is the basis for determining the maturity of organisations in the digital age, and participating organisations receive scores based on their answers to the survey questions.

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The entrepreneurial work culture—a rare species

Organisations with entrepreneurial work cultures are rare, although more and more companies aspire to “act like startups”.

For the past two years, and again in the 2016 report – the 10th annual report – only 20% of organisations self-identify as having an entrepreneurial or very entrepreneurial work culture.

This is not surprising when we see the overall internal work environment in many organisations.

The 2016 data show what I call an “anti-entrepreneurial” picture: 47% say their C-level managers have command-and-control leadership styles, 53% say their organisations have complicated processes that are implicitly difficult to work within, and 40% say slow decision-making is a serious concern holding back transformation initiatives.

Only 37% say that people in their organisation freely challenge ideas, including the business model and work practices.  

However, there are a few organisations that have entrepreneurial work cultures.

The research looked more closely at the small group of organisations that responded at the top level to this question: “Please rank your organisation on a scale of 1 to 5 between entrepreneurial spirit, freedom to experiment and take initiatives and absolute compliance to rules, processes and instructions. Only 15 organisations selected “1”, that is to say very entrepreneurial..

They are a diversified group, illustrating the fact that their entrepreneurial work culture is not a question of demographics, industry or geography. Ranging in size from under 500 to over 100,000 employees, based in Europe, North America, and Australia, they operate in different sectors including consumer retail, banking, food and agriculture, government, humanitarian, construction and professional services.  

Correlation between entrepreneurial cultures and digital maturity

The 15 organisations have several things in common. They all scored high on the Foundational Framework, meaning they are near or at the Maturing stage of digital maturity.

When asked to self-assess their closeness to achieving their digital transformation vision, their responses were considerably higher than the survey average.

This translates to work environments where people are much more digitally enabled. In fact, these organisations self-scored 20-25 percentage points higher than average for specific capabilities:

  • Sharing information and knowledge directly via blogs, wikis, “internal Twitter-like tools” or similar.
  • Commenting, reacting, liking on official news, published information and content.
  • Internal crowd sourcing and developing ideas through online ideation/innovation technology solutions, enterprise jams or similar.

All these capabilities reflect a work culture where freedom of individual expression, experimentation and collaboration with others are valued. What holds that together is the active promotion of trust (as distinct from command and control). Trust is itself reflected in openness and work visibility.

Digital maturity is conducive to the openness and visibility found in entrepreneurial cultures

The 15 entrepreneurial organisations also differ when it comes to work practices. Work practices based on autonomy, accountability and self-management are more common in the entrepreneurial organisations then in the others. People are more likely to be involved in multiple projects, changing teams and roles based on internal and customer needs, and  work across traditional silos.

However the key distinction lies in work practices based on openness and cross-organisational visibility.

This is considerably higher in the entrepreneurial group than in other organisations. For example, people are more likely to self manage in the entrepreneurial group, and it is much more likely their objectives will be visible across the organisation. Teams are more likely to be able to set their own goals, and they are much more likely to work out loud, letting others see their unfinished work as they advance, a clear sign of trust. (Data here.)

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The ultimate test of trust is being able to share failures and learn publicly

In the process of writing this year’s report, I interviewed Alice Brecht, research fellow at the Active Learning Network for Accountability and Performance in Humanitarian Action (ALNAP), an organisation dedicated to improving humanitarian performance through increased learning and accountability.

I talked with Alice about innovation in the humanitarian sector and she shared insights from her work on what failure is and should be.

“The ‘good fail’ scenario is when the original idea turned out to be ineffective or unfeasible, but lessons are generated that can support future successful innovations.”

She believes strongly that people need to share failures for example, in her context of humanitarian activities, writing a publicly available reports saying, ‘Here is what we tried to do. Here is what we learned from it. Here are some recommendations for people who are trying to tackle this problem or here are some lessons learned for how to work with governments on an innovation project in a conflict setting.’ (Read more here http://odihpn.org/magazine/separating-the-good-failure-from-the-bad-three-success-criteria-for-innovation/.

Entrepreneurship means taking risks, sometimes failing, always sharing and always learning, often in a more public way than we are used to

Of course, organisations cannot share public reports about their experiments and in particular the failures. They can however, create work environments where people are able to share and discuss internally what they’ve learned, taking whatever precautions for confidentiality are necessary. This is not the case in many organisations today where people and teams tend to prefer to share when they have finished a project, and then, only if it has been successful.

I’d like to share a short guidance sheet I use in workshops when we discuss how to trigger and sustain an entrepreneurial work culture. These points are not intended to be a road map nor specific advice for organisations. Each organisation needs to find its own way forward, based on a variety of factors. This is food for thought and a potential starting point.

I welcome questions, comments and conversation about trust and entrepreneurship. Please share your thoughts and experiences.

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An Entrepreneurial Work Culture

Potential Obstacles

  • Command-and-control leadership style.
  • Hesitation to rethink how people work.
  • Fear of losing control by management and central functions.
  • Centralised decision-making.
  • Excessive fear of taking risks.

Actions That Help Overcome These Obstacles

Building an entrepreneurial work culture starts with enabling people and teams, then expanding to a cross-organisational dimension.

Capabilities: Deployment

  • Deploy digital capabilities for people to share information, ideas and know-how directly. For example through blogs, wikis and the capability to comment on other people’s content.
  • At the same time, or shortly after, deploy collaborative technologies such as an enterprise social network and the capability to create communities. These should be available across the whole organisation.

Practices: Openness

  • Establish a policy that communities will be open by default, and closed only if absolutely necessary for security reasons.
  • Start and spread working out loud practices, by developing internal examples or bringing in an external consultant to build awareness and share techniques.

Leadership: Autonomy

  • Introduce methods that let individuals and teams self-manage their own work. Ensure freedom in a context of accountability.
  • Implement distributed decision-making, again in a context of accountability.

Culture: External awareness and interactions

  • At both the senior manager level and operational level, develop ways to increase awareness and contacts with the external world. Depending on the sector of activity, consider working directly with start-ups, invite thought-leaders to challenge management practices, and bring in peers in other organisations who can share their challenges, approaches and successes with you.