Annealing. An alternative route to digital transformation.
Trigger digital transformation with bottom-up change and a vulnerable leadership style.
Most likely your company is exploring how to enter “The Digital Age.” Digital transformation has been a hot topic for the past few years. Established organizations are taking lessons from grown-up startups. Perhaps even testing proven agile methods of working. But at first glimpse the corridor into “digital” is a long and daunting one. Leaders are not equipped and are soon realizing the sheer scale and therefore the burden of digital transformation. The words “failure” and “risk” are, too often, coming up and too often feel uncomfortable for your own organization that works like a “well-oiled machine.” The problem with working like a well-oiled machine? Companies find it hard to confront trusted ways of working that are proven to get business results. But a well-oiled machine in uncertain and volatile climates? Business models are rapidly evolving sectors, pushing up consumer expectations – meaning no company can operate smoothly using traditional methods.
Experienced managers expected to lead a transformation in digital can create fear and paralysis. That is the opposite of what is required in a fast-moving and dynamic world. How can organizations create a sense of urgency and avoid being blocked by mental obstacles, as well as high consultancy fees? In today’s climate where boundaries are bleeding at the edges. With today’s customers (in business or consumer markets) who are continually pushing up service expectations in accessibility and performance. Digital transformation should be your number one priority. But for the majority it is being avoided or put on pause, staying within the comfort with what has worked for years.
One way to approach it is to anneal your workforce. Annealing in its formal definition is “a chemical process by which new crystal formations are obtained by heating up and cooling down a system.” This metaphor from chemistry is applicable to organizations, described as the system. For example, annealing helps certain metals to reduce hardness when changing properties, increasing its ductility (avoid becoming weaker in the process). Organizations can use annealing to change the properties of their internal practices to become “digital first” and without breaking anything in the process.
There are three ways annealing can help established organizations transition.
Use annealing to uncover organizational routes to digital transformation
To follow the principles of annealing you first heat things up. This heating up comes from by stating where your company needs to be with digitalization. Make sure to define digital transformation. Simply:
How we change the way we work and adapt to the evolving landscape to meet consumers’ needs, triggered by the internet and new technologies.
Digital is less of a “thing.” It’s simply how we now do things.
After stating your ambition for digitalization, provide no precise plan on how to get there and request this from your employees. Then wait. You are waiting for innovative ways your teams aim to achieve this. It encourages bottom-up change. Sooner or later methods and programs will become visible, rising to the surface and driven by a team’s natural energy. First adopters will reveal themselves and their entrepreneurship, which is exactly what you need. Create the competitive environment for first adopters to take advantage of new realities and business opportunities under this lens. Be sure to action promising routes.
Recognize that digital transformation needs to come out of the spotlight as an overbearing task. Instead, focus on looking at smaller topics of change. Topics led by empowered teams with ownership. Teams who are incentivized and rewarded with the act of experimentation.
Harness organizational uncertainty to rewire thinking
Acknowledge that not everyone in the company will respect the approach of annealing and may challenge your lack of direction. Lower the expectation on yourself to have all the answers. By annealing, you are embracing the unknown as a leader. Already a new leadership behavior that is required in this volatile era. Stay the course and celebrate small milestones and the process that got everyone there.
Annealing is not required any further after a series of pilot programs, tools, systems, and cultural behaviors have been surfaced from within the company. Now you have a sandpit of solutions that can be officially spotlighted and scaled.
Using annealing to create organizational change is unconventional. But isn’t that what’s required when leading your organization in a foreign and uncertain digital landscape? Annealing the workforce to become “digital first” will speed things up and unearth leaders of change from within the organization.
Empower and embrace renewed leadership along the journey
Annealing requires stamina from your first line managers and their teams. Evoke new leadership qualities in your team during the process, as members grow from this experience and learn to adapt.
For yourself, engage in vulnerable and authentic leadership and learn from the people below you. Trigger entrepreneurship in yourself and your people. Leading a workforce that has helped uncover a variety of routes to digital transformation will likely have a higher chance of success than laying out the plan top-down.
Annealing has proven to create organizational change in the past. It is particularly effective in large and complex organizations, a model to steer change in “messy” structures (Eccles and Nohria, 1992). I have observed this method being used in leadership at a leading global retailer of sports and apparel, triggering efforts from below.
Annealing is an option available to large, established organizations to identify credible and bottom-up routes to digital transformation. After all, we are talking about change and it is primarily the people of organizations who are the agents of change. Engaging your workforce in this way can immediately help lower the barrier for employees to approach digital transformation.
However, critics could argue that annealing could trigger digital hostility instead of digital transformation. In already uncertain times, for leadership to create greater uncertainty through annealing may not mobilize employees in the right direction. To avoid this, maintain regular dialogue, albeit intentionally with no specificity, and most importantly encourage and reward an experimentation culture. Uncertainty will soon turn into tangibility when annealed projects become greenlit and action starts to become a reality.
Danni Mohammed is an independent strategy consultant advising global companies on how to achieve innovation, digital transformation, and diversity.