• October 8, 2015

Is the Road Runner Rate of Change Turning the Enterprise into Wile E. Coyote?

By Dave Crane, Global Director, Enterprise Innovation, Hewlett Packard Enterprise

Technological change is breakneck in pace and breathtaking in impact. Digital distribution. Sensors. Big Data. Machine learning. E-commerce. Mobility. Cloud. Predictive analytics.

These breakthroughs have shaken up myriad industries (from retail to financial systems) and processes (from film imaging to customer relationship management). Technological advancement has been so swift that enterprises have not been able to keep up. To digest the demands of a changing world requires major shifts in governance and culture.

Minding the Governance Gap

Accelerated technological change exposed fissures in the enterprise digital ecosystem. For instance, threats to information systems and intellectual property have grown in sophistication and virulence. Compliance and reputational risks are increasing. High-profile breaches have propelled cybersecurity to the boardroom level, making it the challenge of the 21st century.

But governance processes are lagging far behind risks wrought by evolutions in transformation. Perimeter defenses are steadily declining in effectiveness. Yet most enterprises haven’t done the challenging work of identifying their most valuable data assets and applying the appropriate strategies and resources to secure them. Add to that: Too few enterprises realize that cyber risk is primarily an internal people problem. Fewer still have effective, launch-ready cyber-incident response plans in place.

Fueling governance innovation starts with enterprise boards and leaders. They need to sharpen their skills in areas such as IT security and computer-assisted auditing and develop the necessary strategies. Across a landscape where rapid disruptive change is the norm, most enterprises update their IT risk assessments on an annual rather than quarterly or more frequent basis.

Linchpin: Culture

Organizational culture, while difficult to measure, is a crucial element of successful governance, operational effectiveness, and innovation. But cultural evolution often lags behind both technological and governance innovation. Creating a culture that embraces change by consciously trying to be innovative is often unsuccessful. Such cultural dynamics must seep down to the enterprise subconscious through experimentation and repetition. It requires a focus on building an engine of human behaviors driven by questioning and willingness to risk.

It also requires a balanced focus between internal processes and external market and competitive forces. This enables the enterprise to be nimble when it comes to keeping up with an ever-changing environment. Stalled cultures often over-emphasize established processes and internal dynamics. Why is culture so hard to shift? Vision and culture are often in conflict. Established behaviors and mind-sets are built over years. Past successes and steady revenue streams reinforce the established cultures. Learning from—and capitalizing on—failure is an acquired skill that few enterprises ever master. Creating a culture that embraces innovation requires time to demonstrate that new behaviors generate success.

It requires establishing consistent expectations, addressing fiefdoms that may restrict data sharing and collaboration, and ensuring individual departmental goals are aligned with enterprise objectives. Then it’s also necessary to have cultural infrastructures and processes established to turn ideas into action.

Bedrock of Technological Gains

Enterprises earning the richest dividends from technology and data align their corporate mind-sets, performance measurements, and incentives, with enterprise vision. Creating a culture that prizes security, transparency, and innovation is key to driving effective governance and culture. Only then can the enterprise begin to keep pace with technological change.

Read more on creating a culture of innovation in our annual best-of compilation book, Enterprise Forward.