Communication service providers (CSPs) are facing existential issues. Under attack from nimbler, more energetic and agile players, they find themselves on a slippery slope. The risk is that of degenerating into nothing more than pipeline providers with a low profit margin. Quite a lot is at stake, and the penalty for doing nothing is simply too great. It is therefore essential for CSPs to provide a wide range of innovative digital services and above all to ensure that their markets survive and expand. Most CSPs have been trying for years to speed up their digital transformation, which requires them to meet multiple challenges: not only in technology, but also in terms of culture and speed. Results from 2017 show that there is an approach to designing organizations and workforce strategy that supports these transformative efforts:

  • 66% of CSPs have embedded digital capabilities in lines of business.
  • 58% of the organizations cite improving network efficiencies (including consolidation, convergence, SDN/NFV) as a top business priority.
  • 61% of the organizations are undertaking transformative initiatives to enable employees with digital tools.

So CSPs are definitely experimenting in order to learn, transform themselves and evolve. Yet at more than 76% of CGI’s clients, cultural change is still a major barrier to implementing digital transformation. This in turn directly impacts their bottom line. A study by MIT has confirmed this finding:

Digital transformation also fundamentally changes an organization’s core DNA, such as how it listens to customers, innovates, collaborates with partners and provides new products and services. It’s also about driving change across an entire enterprise, from frontend customer channels all the way to backend processes and supply chains.

Ultimately, the goal is for an organization to become more agile in order to flexibly respond to changing demand in a dynamic marketplace. What’s more, this kind of broad, fundamental change has no clearly defined beginning and end. It takes place continuously in response to shifting market drivers and the expectations of employees, customers and citizens.

 

Transformation Management Intensity

It also turns out that initiatives across all industries, and not just CSPs, succeed in:

  • simplifying how an organization is managed (68%),
  • establishing a program to build a culture of collaboration within an organization (63%),
  • changing employee recruitment and retention criteria to emphasize technology skills (61%),
  • increasing the decision-making abilities of frontline employees (59%),
  • adding groups to promote innovation such as labs or garages (55%), and
  • making major changes to core organization structures (51%).
Source: CGI Proprietary Study in Research Partnership with IDC (2017)
 

There’s a lot of talk about organizations’ DNA. But how does one define it? And what is the best way to change it, taking into consideration that each layer of management takes half a year or so to adopt a new paradigm for horizontal and external collaboration? An organization’s DNA essentially comprises its brand, business capabilities and cultural framework. Together, these three things are the anchor for any transformational journey. They mutually influence one other and must therefore evolve together to avoid typical pitfalls.

 

Agile

There’s a lot of talk about organizations’ DNA. But how does one define it? And what is the best way to change it, taking into consideration that each layer of management takes half a year or so to adopt a new paradigm for horizontal and external collaboration? An organization’s DNA essentially comprises its brand, business capabilities and cultural framework. Together, these three things are the anchor for any transformational journey. They mutually influence one other and must therefore evolve together to avoid typical pitfalls.

Organizational DNA

Why evolution and not transformation? Because the current failure rate of transformational programs exceeds 70% across industries, and many CSPs have already spent a decade or more transforming themselves while running a high risk of organizational exhaustion. It’s absolutely imperative to make this journey a step at a time with a flexibly scalable approach. This makes it possible to systematically transform the mindset, values, and behaviors that are practiced and rewarded on a daily basis. In the process, employees learn to embrace risks and uncertainty as the norm instead of the exception. Throughout it all, the principle is steady evolution instead of sudden transformation. It’s about giving transformation teams a chance and focusing on evolution to avoid exhaustion and disappointment while creating a sustainable and energetic drive for innovation and agility.

The next issues of this newsletter will continue to focus on DNA evolution by looking at:

  • Horizontal roadblocks to collaboration
  • The need for new business models and analytical tools
  • Mindset changes for improving collaboration and reducing uncertainty
  • Managing complexity while switching from a systemic perspective to a knowledge-based one
  • The importance of assessing brands, cultural frameworks, business architecture models and organizational capabilities
  • Essential roles for increasing the likelihood of successfully evolving to collaborative, innovative and adaptive DNA
  • Using a proven toolkit to change CSPs’ business models from vertical to horizontal with a DNA framework that paves the way to innovation by leveraging