Team Rules: Managing Change in the Digital Era

This is a continuous process characterized by each employee delving into their own self, seeking personal purpose, breaking down the barriers that restrict beliefs, and strengthening the collective potential of the entire team. Henceforth, every new challenge becomes an opportunity to tap into a resource.

Let us add the following to the above:

• abandoning the “I know everything” mindset: the willingness to learn from the experience and knowledge of any employee, regardless of their status;

• rejecting established patterns in favor of perceiving with open eyes, where unconventional approaches are not automatically deemed incorrect;

• willingness to admit mistakes and work together to rectify them.

This is how attentive and versatile leaders emerge and qualify as mentors.

6. Change Management and innovation implementation

An effective leader is an entrepreneur who evaluates each task in terms of the future outcome. Moreover, it is important for him or her to not only think proactively but also to perceive changes as a permanent growth factor.

The team will actively engage if the leader maintains a culture of innovation that aligns with the core principles of the organization and the people within it if the leader is open to experiments and improvements and actively facilitates their implementation. The key concepts here are speed and productivity. The leader must always keep abreast and assist in the swift implementation of changes in processes and operating models. To achieve this, the leader should receive dynamic updates to understand the overall situation and make well-informed decisions in the moment. This involves having readily available dynamic metrics (key performance indicators or KPIs) that accurately reflect current circumstances, as well as scenario testing methods. We will discuss these in later chapters.

The main point to bear in mind is that when we make changes to processes, there is an additional burden on the team in terms of applying and mastering new technologies. It is important to undergo transformation while simultaneously increasing overall productivity.

The leader's responsibility is to help the team in streamlining their efforts, building a meaningful path, choosing priority areas and introducing digital tools that will give the organization the greatest immediate impact.

7. Digital skills & the ability to work with data

In addition to an open-minded approach, innovation also requires new digital competencies (project management through a CRM^[5], proficiency in handling clouds and understanding intelligent systems, and so on). This is where the ability to seamlessly integrate the organization’s ecosystem into a digital environment and flexibly manage processes using high-precision algorithms become paramount. It involves optimizing time-consuming operations and strategic planning. Tools aid in the creation of digital twins, testing scenarios, prioritization, and real-time management based on reliable analytics.

“

SERGEY CHUMAK, International Expert on Business Transformation and Strategy, Head of the Strategy Committee of DEA:

– Until recently, many believed that “digital” was something on the distant horizon, beyond our reach. Today we recognize that every business must embrace this trend and address the question “How can I turn new technologies into a tool for creating value for customers and shareholders?” To embark on a journey of digital transformation, it is advisable to create a manageable plan for quick wins and supplement your own competencies by collaborating with more experienced partners.

”

Welcome to the world of digital management, where the pioneers are those who embrace the new, exhibit organizational flexibility, have a commitment to ongoing development alongside the team, and display a keen awareness of processes, team dynamics, and innovations.

Chapter 2. Thinking innovatively, tapping into hidden resources, and scaling from within

The continuous development of employees has always been, and remains, essential for the success and growth of the organization. Yet the world is evolving at a rapid pace, pushing us to keep up with it and reducing the time available for response and adaptation.

Consequently, operational integration of changes, sustainable development, and the recognition of transformation as an intrinsic and integral aspect of the organization's survival now take center stage.

The leader faces two major challenges.

1. Preparing the team and organization for transformation to enable new processes and improvements. To prevent potential resistance of employees to innovation, it is important to lay the groundwork in advance: set goals, communicate the purpose, strategize on motivation, involve the team, ensure they have access to the necessary resources.

2. Managing and facilitating changes (initiatives, rhythm, higher productivity) during the introduction of innovations. What are the primary roadblocks?

• A strategy is imposed from above (leaders) and outside (consultants), but units and employees fail to see its strengths and do not share the management's vision.

• There is no clear or transparent monitoring of the effectiveness of implemented innovation, and no objective metrics or KPIs that can be used to evaluate the effectiveness.

• There is neither reactive collaboration nor sync between units. Each new process requires a startup phase; failures occur at the interfaces of these processes.

• Employees lack the competencies needed to drive change. Inadequate and unsystematic training fails to provide a clear understanding of the tasks and methods required for their execution.

• Traditional organizational design does not support innovation.

• Any additional workload during the implementation stage and any doubts born from the fear of change and the feeling of uncertainty can result in resistance from the team.

At the same time, in addition to strategic priorities and planning, important drivers of growth include the choice of the most effective digital tools and taking into account the opinions of key stakeholders (teams, partners, customers, etc.) when implementing change. This approach enables companies to develop and expand not only through external expansion, such as opening new offices, franchises, licenses and distribution channels, but also through internal optimization, uncovering hidden resources and eliminating inefficient processes and any impediments to progress, all while striving for a more environmentally sustainable, energy-efficient, and secure path forward.

In an age of digitalization and rapid change, this concept is giving rise to numerous change management trends.

Chapter 3. Trends in change management within a digital environment

CREATING A TRANSFORMATION STRATEGY AND PLAN WITH THE TEAM, UNITING AROUND SHARED VALUES AND DISCOURSES

A sustainable and effective way to boost team performance in an era of change is to involve the team in strategy development, management, and the transformation process.

Megafon^[6] has its own technology sandbox, which serves as a platform for testing hypotheses and innovative solutions, not only for employees but also for supporting pilot projects and startups. Its founders firmly believe that all employees, from a consultant to a senior executive, should adopt an entrepreneurial mindset. This gives a deeper understanding of the long-term consequences of their decisions and helps develop processes that align personal and corporate interests.

While the leader evaluates the situation on a global scale, the team observes it from within. This means that employees are better positioned to identify local problem areas, provide an accurate depiction of ongoing events, obtain key insights, and propose unconventional solutions to optimize workflow efficiency.

The joint development of ideas and strategic approaches paves the way for growth and development rooted in shared values and discourses: they are verbalized and translated into corporate codes and role models that can be adopted company-wide, thereby revealing its internal potential and demonstrating approaches for effective collaboration.

CORPORATE CULTURE AS A DRIVER OF INNOVATION

Innovations do not solely originate from external sources. They can also be born within the organization if the leader:

• Unleashes the team's potential;

• Cultivates an environment conducive to insights and fresh ideas;

• Communicates with the team to convey the importance, value, and benefits of changes;

• Introduces systemic mechanisms for collecting and analyzing ideas.

Within a self-developing team operating with a streamlined management structure, something akin to a collective mind emerges: draw energy from each other, and this energy doesn't dissipate into the void but accumulates, much like static electricity. This energy subsequently results in the generation of innovative and groundbreaking ideas (see Figure 4).

DIGITALIZATION AND IT AS ACTIVE ELEMENTS OF MANAGEMENT, CORPORATE ENVIRONMENT, AND BUSINESS MODEL

Nowadays, innovation is often associated with automation and digitalization. Successful companies, in approximately 90 % of cases, base their management decisions on data. This approach facilitates the adaptation to continuous changes and expedites the implementation of digital tools rather than impeding it.

Using advanced analytics for marketing purposes is increasingly becoming the standard practice.

“

VERONIKA GIMENEZ, Executive Director of DEA:

– Technology has changed the conventional behavioral patterns of both marketers and managers, and the recent pandemic has further consolidated this process.

Marketers no longer need to ask clients what they want. Thanks to search queries and other automated tools, we already know what products and services the client is seeking, the music they listen to, and their clothing preferences. Today, even the simplest A/B tests can easily identify real demand, rendering traditional focus groups unnecessary.

Digitalization and automation tools assess the demand for a product without the need to produce it beforehand, and, using the data acquired, businesses can make informed decisions about the product's fate: whether to retain the concept as is or modify it to raise its value in the eyes of consumers, thereby ensuring that it meets the desired sales targets.

”

The successful implementation of digital technologies and tools is not just changing the internal communication system; it is reshaping the entire business model. Technologies are woven into the organization's ecosystem, giving rise to a fresh corporate culture centered around data management.

RETHINKING APPROACHES TO ORGANIZATIONAL DESIGN

The traditional organizational structure is evolving into more flexible, simplified, or decentralized systems. This is primarily because, in terms of innovation speed, the usual hierarchical management models with two-way communication (top-down, bottom-up) are inferior to more agile structures built on self-governance and/or cooperation, featuring multidirectional communications among all team members.

The evolution of the leadership model is giving rise to a new kind of cross-functional team empowered to manage products and projects based on competencies. It also increases opportunities for a wide range of employees to take initiatives and make decisions, and it places emphasis on meta-competencies and internal communication within the organization.

The company is perceived as a living organism with its distinct corporate DNA, making it inherently unique. It does not conform to any universal management model, and similar trends can be observed in many Russian companies.

Sberbank practices self-governance days, during which any regular employee can experience a leadership role^[7]. Proactive employees are invited to speak at specialized conferences and accelerators for innovative business ideas are being introduced for employees^[8].

Ozon hosts a bi-monthly all-hands open mic event where both top managers and individual contributors come together to discuss news, exchange ideas, share results, and answer questions^[9]. Each meeting is followed with feedback on the content's usefulness, clarity, and the overall comfort of the event. This is done to increase the effectiveness of training programs and instill a sense of responsibility within the team for personal and general improvement^[10].

Many organizations delegate assignments to cross-functional project teams as a means of enhancing internal entrepreneurship and to pilot ideas.

TRANSFORMATION MANAGEMENT AND DYNAMIC CHANGE EFFICIENCY METRICS

Preventing potential resistance to change is much easier than fighting it. The adaptation of both the team and the organization to transformational processes is achieved through the evolution of management approaches.

Methods based on transformation efficiency metrics are becoming increasing popular. These methods include:

• setting measurable and transparent goals;

• short planning cycles (sprints) to complement long-term goals (breaking the large task into smaller, manageable pieces);

• inter-team synchronization (subdivisions constant communication, awareness of joint tasks, and can assume responsibility as needed);

• a comprehensive assessment of the results (by team members, the manager, employees from various departments, and other members within the organization’s ecosystem);

• transparent monitoring that establishes a clear connection between actions and results;

• a competitive element resulting from the transparency of the monitoring.

Approaches that were previously used primarily by IT companies are proving to be effective in a variety of domains. However, these organizational models require updated analytics that:

• respond quickly to changes within the organization and in the external environment;

• include prioritized qualitative and quantitative indicators that are aligned with the objectives defined by stakeholders;

• enable the evaluation of indicators from multiple perspectives, within a single process, or at the intersection of several processes, while taking into account different segments and priorities. This assessment should be from both the organization's point of view and its external communications.

As a result, dynamic performance metrics are reconfigured to align with new management models, serving as catalysts for change. They draw attention towards the processes that require reconsideration and optimization, and unveil immediate potential and high-priority areas for growth.