ANZ digital chief: Tackle the ‘frozen middle’ of your organisation or face irrelevancy
- 24 May, 2017 12:58
It’s the “frozen middle” of an organisation where people with outdated skillsets rule the roost that leaders must confront if they hope to transform their companies to suit the 21st century customer, ANZ’s digital chief says.
Maile Carnegie shared her views on what it takes to shift a legacy business into the 21st century at today’s Adobe Symposium at the iconic Sydney Opera House.
Describing culture as one of the biggest obstacles of any transformation, ANZ’s group executive of digital banking said table stakes is having a CEO with skin in the game. But beyond that, another initial barrier is what she called the “frozen middle”.
“Increasingly, most businesses are getting to a point where there are people in their organisation who are no longer are experts in a craft, and who have graduated from doing to managing and basically bossing other people around and shuffling Powerpoints,” she claimed.
“That frozen middle will resist change like death. It exposes that they have no skills any more. Figuring out how to deal with the frozen middle, once you have the boss’ support, is the big thing. If they’re not going to become craftsman and learn anymore, they need to move on.”
Most companies aren’t change fit, Carnegie continued. “It’s a muscle you need to exercise,” she said. “At Google or Adobe, you’re changing all the time. Your job will be redefined all the time and you’re used to it. But going back into a legacy business, that’s not the case.
“A lot of that is because change has meant job loss, and there’s fear. People need to be made more comfortable with change.”
In addition, most leaders don’t realise culture and change management is a science. “You can engineer culture,” Carnegie said. “Many think it’s an opaque thing, but it’s actually a scientific set of inputs and outputs. Getting senior leaders and direct reports to understand that if you change these levers, it will change the culture, is the other education barrier.”
According to Carnegie, becoming a 21st century company is about owning capabilities first and foremost. “These companies haven’t lobotomised themselves, or outsourced future knowledge to partners, and have created capabilities internally,” she said.
It also takes a different leadership model. “If I compare Procter & Gamble or older companies set up to win in the 20th century, still haven’t let go of command and control leadership models,” Carnegie continued.
“With 21st companies, leadership models are all distributed. Senior leaders have the courage and humility to say I’m going to delegate leadership down. That makes a lot of 20th leaders very uncomfortable.”
Typically, this comes with different levels of aspiration, Carnegie said. “Older companies have incremental aspirations. Going forward, if you don’t have what feels like an almost unachievable aspiration, you will fail,” she said.
What’s also become obvious in a world where digital and social channels dominate engagement is that there’s no distinction between you as individual, and what you say and do publicly.
“There is so much opportunity for your internal culture to leak out,” Carnegie pointed out. “You see companies who say they champion people with sexual differences, but then if you look at policies, they’re full of it. There has to be congruency between those two things.
“If you want good customer experience, you have to have good employee experience.”
To get there, Carnegie advised figuring out the overlap between personal passions and the change agenda. “As a leader, if you don’t have a high degree of personal passion for why you’re there and why you’re trying to championing change, they will smell it,” she said.
Passion is also important because championing change is exhausting, Carnegie said. “You need an organic, renewable energy source to keep going,” she said.
Making change happen at ANZ
Carnegie joined ANZ as head of digital nearly 12 months ago with a remit to reshape how the company works with customers. Her short-term goal was to get the definition of digital transformation right.
“What we’re trying to do is fundamentally re-wire the engine of the bank,” she said. “To digitally transform a company, you have to recreate the engine to take advantage of existing and future technology. But that’s not how 20th century companies have been wired.”
Rather than the “sexy apps and shiny new toys”, which Carnegie suggested are “very episodic and won’t sustain”, the focus at ANZ has been to achieve deep, strategic clarity around transformation and ensure that definition is understood by the leadership team.
In terms of capability, Carnegie cited data and technology as obvious musts within a digitally charged organisation.
“The other one that’s bleedingly obvious... is that you won’t survive unless you are incredibly sharp on customer centricity and can create winning customer propositions,” she added. “There is so much transparency now over your value proposition. The ability to hide that behind smoke and mirrors is going away.
“If you don’t have extraordinarily sharp focus from every organisation on your customer value proposition and driving that, then you will just fail over time. It has to be at the core of any capability transformation.”