Designing for Now is not enough
As described in this article, we recently switched to a new organisation model. Part of the change is, that we organize our portfolio, and our accounts in so-called ventures, you could also call them business units. Sounds pretty unspectular, yes. For me, it’s not about putting fancy wording on the same boring stuff, but infusing boring stuff with better and smarter meaning. So it’s not about what it is called, but how it works. Our ventures aim at paying tribute to the continuous change all businesses are exposed to. It’s about adopting transformation and reconfiguration as a feature to work with, not a threat to work against.
Especially if you call yourself an organization driven by innovation and transformation, it’s impossible to maintain the same portfolio of products and services across a long period of time. Why? Well, if everybody is talking daily about how demands and needs of clients are changing, how can you keep offering them the same things to them? It’s funny that especially agencies and consultancies whose business is to bring in fresh thoughts, innovation and future thinking, oftentimes keep offering the same old recipes to new problems. Fresh words yes, new thinking – very little. Consulting clients in innovation yes, acting innovatively themselves, very little.
Method-based consulting is dead IMHO. It’s about leveraging real life experience as the fundament for handing out advice to others
Some points of proof: good old ad agencies that can’t quite make the jump to digital pure players (yes, unfortunately, this is still true in 2023, it’s quite a tragedy.) Consultancies trying to become more agency-like and creative. I’ve been in such an experiment for a couple of years and I can only say so much: cargo-cult is real. Calling yourself these things and putting big posters on your company walls might suggest a change, but they don’t create one. Change and transformation can’t be acquired aka bought. Another example: the current hype of A.I. that will all eliminate our everyone’s job. Everybody talks about it, no one changes their processes or organizational structure to systematically cater to the possibilities.
I’ve always wanted to close this gap between perception and talking and the real life actions that need to live up to the promises. I’ve always wanted to hold everybody to the same standards, but those that promise to be ahead to even bigger ones. The understanding of just knowing everything better, just because you work in a consultancy is not gonna cut it. I oftentimes question the whole idea of consulting because in its classical understanding it is based on very outdated notions on how knowledge is created, shared, value is created and a human-centered working environment looks like. So this whole industry desperately needs an upgrade, if not a complete reimagination. It’s about staying ahead of the curve, it’s about being imaginative, it’s about investing in new topics and deliberately working with risk – the same that we consult and suggest to our own clients all the time. Next to integrity being a very important value to myself, I also believe that consultancy work is light years better if people advise based on their own experiences and real life learnings instead of just having digested the theoretical concept of it. Method-centered consulting is dead IMHO. Instead, it's about leveraging real life experience as the fundament for handing out advice to others. Thus, to hold us more accountable to our own standards and our work, we have decided to put ongoing innovation and reimagination into the core of our services.
Innovation in a nutshell, is consciously experimenting with risk.
Innovation in a nutshell, is consciously experimenting with risk. Consciously – because it should be a strategic choice, not a random act; experimentation because you can’t know upfront if an idea is going to work and catch on; risk because it is usually involved a certain degree of uncertainty, the risk of failure and an invest in form of time, money, people or all of the above. Building an org structure based on this understanding means that any person should be encouraged, empowered and rewarded for ongoing experimentation while taking calculated risks. It’s about systematic learning and optimizing with the goal of offering our customers the best possible product and offering we can manage to create at any point in time. And that’s our venture structure in a nutshell.
Ventures - classic business development on speed
Every venture is basically a set of hypotheses. Hypotheses that form an assumption of the market needs and how our organization is able to create value and solutions for these needs. So, in essence ventures are our strategic bets on our business development. It’s a constant testing of our own work against the standards and needs of our clients and our markets and it not only allows for changes in both, it designs specifically for them. Reimagination and reconfiguration as a daily feat.
What usually happens is that organisations have a standard offering (stuff they have done for years and will keep on doing) and end up creating an innovation portfolio isolated at the side line. We do the opposite. We don’t differentiate between the standard services and some fresh, hip innovative services. We treat everything we do as an innovation case. Thus, we question, test, iterate and improve in every single business field we have. That obviously doesn’t mean that we have different solutions for our clients every single day, it’s much slower and much more subtle. You could say instead of completely having to update our portfolio every 3 years (the classical strategy cycle), we adopt logics from product development and nudge our portfolio to a better form every single day. It can mean switching methods because we see them not working in specific environments, it can mean changing something little as the wording on our website, it can mean switching our communication because our target group doesn’t respond to certain messages, it can also mean letting go of certain offers within that business field because they don’t meet demand. However small or big these changes are, every single one of them is made to become more customer centric and more valuable.
Let’s grab an example: One of our ventures is called “Sustainability Transition”. It’s our take on the needs of organisations to become more regenerative and sustainable, not only in terms of their carbon footprint, but in terms of their economic survival, social responsibility and organizational work. Creating this venture has been a conscious strategic bet that we as an organization can create meaningful value in this field. That’s the main hypothesis. But obviously there are many smaller notions to experiment with. What do we do in this field exactly? What do we decide not to do because it doesn’t meet our competencies? What are the barriers to acting sustainably and how can you convince people to overcome them? What approaches do we sell? To what benefits do customers respond the most? Where do we have most competition and by whome? What are USPs? Etc. etc. These are all classical questions when it comes to outlining value propositions. The difference is that we talk and check our assumptions about these questions every single week instead every 3 years.
It's classical business development on speed. It’s also how innovation has been done and carried out in many industries for years and now, decades. But somehow it has never made the leap to our industry and service offerings. It’s about time it did.
Every venture is represented and led by one or two venture leads who capture all the expertise that is needed to maximise the chance of success for that specific experiment. They are people with entrepreneurship, business verve, expertise in that field, sales talent, communicative excellence, imagination and much more. They have full autonomy in designing their ventures according to market and customer needs as long as they are in line with the overall company strategy. The invest they make in certain bets is aligned with me as CEO. That’s it.
Embedded in culture, manifested in rituals.
Obviously this is a radical structure that rewards learning and experimentation. To make it successful, rewarding, loveable, - as with any process – it needs the right balance. The easiest way to fuck up this concept would be to focus on success alone. You can’t expect people to experiment with ease and expect a certain win at all times. It needs trust, patience and conviction, full transparency, clear KPIs, ownership and responsibility enacted. Also, reporting needs to look completely different. We talk more about the future than the past. It’s about bringing all brains together to speculate and form the most promising hypothesis, instead of dissecting what has already happened. If you're interested in the details, you will find them here
The circle of life - Schumpeter in action
What's even more important is the way you deal with things that do not work. I don't want to call it fail, because I'm done with the whole "Fall in Love with Failure" stock photos. Let's be honest, first: no-one loves failure, it's a painful place to be in, so let's not pretend we're above caring. Second, fail fast and break things, this philosophy just needs to be buried after all the crap it got us in. (Zuckerberg, is it you?)
So, coming back to the point: What happens if ventures don't work? Like at all?
Well, whenever there are strong signals and feedback that a venture is not viable, it’s closed down. Immediately. As hard as it is. As many efforts, tears and laugh have gone into it. Time to stop mourning the sunk costs. Doesn't matter. Market feedback trumps it all. Even if it means shutting down the most favorite idea of all times of the most important person.
To make this a bit easier, our venture structure doesn't reflect our team structure, but is clearly separated from it. Let’s imagine the hypothesis of a venture is not successful. Accepting this is hard enough for most people. If it also meant that a whole team would need to be dissolved, most people probably would try to save it by finding reasons and argumentation to defend it. That’s not helpful if your goal is to be very truthful to outcomes, so we made it simpler for people by erasing that hurdle. Be prepared for things to change: We started with 7 ventures, now we have four. 2 were stopped, 1 was adjusted and reshaped in its focus to better fit the needs of our customers. All that only in 4 months. Some would argue: seems, like you started out with very wrong hypotheses, what a waste of energy. We would argue: wow, how many learnings have we generated in such a short amount of time. We chose the most critical hypothesis to challenge ourselves and now we know for sure what not to do (yet) and have made a significant leap in figuring out exactly how to make our customers happy.
How you face the results is not only your choice, but also a direct manifestation of your strategy and values, aka the culture part I was talking about earlier.
We as a whole have made the choice to follow the second interpretation. Because experimenting with risk always leads to being wrong at some point, unless you haven't been putting anything of value on the line.