Cake and risk management

I occasionally joke that, while companies continue making the same mistakes, I will remain cheerfully, gainfully employed.

We have asked individual leaders to take on way too much individual risk for ambivalent collective returns

It’s a joke. Only it isn’t funny.

There is a thriving industry focused around the fact that the majority of digital transformations fail, but we can’t stop trying to transform because the economy continues to change around us. So we need to keep going back into the fray. And we do so knowing full well what we keep getting wrong… and we keep getting it wrong again.

And again.

And again.

We know why digital transformations fail. Every consulting firm has issued a report or 10. Every journalist covering the industry has written about it multiple times over the years. In every language, no less.

I have read at least 30 books on the subject, and they all point to the same things: failures of leadership.

Many don’t even get started due to the lack of leadership courage.

For those for whom the process starts, the danger is that the leadership will either try to oversimplify things that are not simple, or the organisation loses heart at some point. Things get tiring, complicated or confusing and people get distracted by other things, new things, urgent things or seemingly less complicated things.

In what I like to call ‘the messy middle’, distractions abound, as does irritation. When people are exhausted and demotivated, right in the middle of the messy middle, that is when you see what people are really made of.

Those who push through and those who don’t.

That’s where efforts to transform fail. Because in your organisation, it is guaranteed that some people will have what it takes to push through and some won’t, and what happens next will come down to those individuals – their stamina, persistence, political capital and willingness to burn it – more than it should.

More than I would be comfortable with if I sat on your bank’s board, to be honest.

Now… the good news is we are getting further down the path each time.

It’s a pyrrhic victory, a terribly inefficient way to progress, but at least we are moving forward, as an industry. And what I can see in the transformation efforts that did work, that did succeed… is that success is a team sport. The bounty of solid delivery is collectively celebrated and owned at the organisation level.

The price of failure, however, is individual.

A friend told me a story recently of a successful implementation he was involved in. Hurrah and champagne and confetti all around. Back slaps and ‘it was a team effort’ and ‘it is only the beginning’ speeches. And cake. I like cake.

What I didn’t like was what he told me about what happened during the messy middle phase where a sub-plan was made, discussed and agreed upon by the people whose responsibility it was to do just that. People, you notice, not person.

The plan was aligned with the overall programme. It was one of many plans made. One of many variables managed. It was in no way unusual other than… it didn’t go to plan.

It turned out that one of the assumptions made in said plan, the plan that had been discussed and agreed upon by the relevant people, was wrong.

That assumption being wrong meant that a workaround was now needed and a delay would ensue.

Annoying and expensive and not elegant, but not terminal. Think of all the other plans that didn’t go wrong, right? All part of the same effort… it’s what happens… yada yada… and this didn’t kill them. They got to the finish line, remember? Confetti and cake and all.

Only… they didn’t all get to the finish line.

In the messy middle, the reversal felt like a huge blow. The team didn’t feel like cake and confetti was on the horizon. The assumption was that this wasn’t just a thing that happens in the messy middle. (Although, dear readers, it is. It is exactly the sort of thing that happens in the messy middle. That’s what makes it messy.) Someone needed to be responsible.

Did they pick someone at random from the team that approved the plan? Did they pick the person who had shouted the loudest? Whose idea it had been? Or someone who was on thin ice over other things?

I don’t know.

We will never know.

We will only ever know that they picked one person who was penalised for the collective decision. Banished, demoted and stripped of power and influence. Not even fired. Just… ostracised in shame.

They weren’t there when the champagne was opened and the cake handed out. Was it not their success as much as anyone else’s?

As it turns out, no.

And sadly, this is a common enough occurrence to make fear the most healthy reaction to the idea of sponsoring or driving big change. When you see people hesitating to put their head above the parapet, it is because they know that the minute they put their hand up, they are putting their head on the chopping block if, at any point during the messy middle, their organisation starts feeling antsy about the difficult thing they set out to do… being difficult.

When you think about it like that, it’s a miracle we ever get started. An absolute wonder that people still step up to lead this work.

And I feel we should make it easier for them. We know how, after all. We’ve been here before.

So how do we make this not an exercise in bravery, but an exercise in risk management? How do we make it so the necessary, complicated, difficult work that needs to happen (and it needs to happen) doesn’t rely on a few people being unaccountably brave?

In research carried out by the fab team at Mechanical Orchard recently (I told you I would get back to it), 71% of respondents admitted that the very thought of modernisation and transformation induces stress. If I’m honest, I think the remaining 29% are lying to us. Because it is stressful: the work is hard and unpredictable and it takes a lot of political capital to get it going and keep it moving, and when the music stops… are you still standing, so to speak? Or are you just standing while everyone else around you has grabbed a chair, leaving you exposed?

The same research suggested that the reasons for action, the reasons to actually get on with the work, were regulatory or aspirational (not just for the organisation, but for the person also – their ambition is always in play). A case of “we must” or “I want”.

The reasons for not doing, though, were always political. People cited fear of losing their job if things went wrong or unforeseen events happened – and oh boy, will they happen.

The sensible operator keeps their head down. That’s the long and short of it.

So that means the job for those of us supporting these transitions is to help the sensible operator get on with the work without needing to be brave.

25 years of ‘digitisation’, folks. We have learned enough to risk-manage the living daylights out of this.

Let’s be the partners that can make this journey less Lord of the Rings and more Hallmark Christmas Movie. We know enough about how to do this work that it shouldn’t be about bravery anymore. Just about getting through the steps and managing the variables, including the unknown ones.

We have asked individual leaders to take on way too much individual risk for ambivalent collective returns. Ultimately, it’s the organisation that needs this transition more than any individual leader, no matter the size of their ambition. And the organisation’s antibodies will reject many unfamiliar things, but will always welcome a risk matrix. And so, let’s apply what we know to do exactly that… risk-manage a process that is unpredictable and difficult but not impossible.

We’ve done it before, after all. There was champagne and cake and confetti. I was there.

The bounty of success was plentiful, and the team basked in it.

The fear of solitary failure… almost forgotten in the celebration.

Let’s hold onto that feeling and turn the things we learned getting there into the things that will make it easier to go again.

For the next guys, and the ones after that.

#LedaWrites

Leda Glyptis is FinTech Futures’ resident thought provocateur – she leads, writes on, lives and breathes transformation and digital disruption.

She is a recovering banker, lapsed academic and long-term resident of the banking ecosystem. 

Leda is also a published author – her first book, Bankers Like Us: Dispatches from an Industry in Transition, is available to order here.

All opinions are her own. You can’t have them – but you are welcome to debate and comment!

Follow Leda on X @LedaGlyptis and LinkedIn.