Do you know the science of the boiling frog?
They say if you drop a frog in a pot of boiling water, it will frantically try to clamber out. But if you place it gently into tepid water and gradually turn the heat up, it will float there quite placidly and unresistingly allow itself to be boiled to death.
As the twenty-first century digital revolution smashes into our twentieth century business processes, operating under nineteenth century governance structures, I would argue most big companies are in danger of boiling.
We’re living in a digital revolution. How we work is changing. It's being driven by social, mobile, analytic and cloud based technology. Robotics and AI have well and truly arrived. Yet our leadership is still structured around slow and inefficient command and control models, which simply don’t translate to today’s workplace.
Companies must adapt to prevent their workforce being outstripped by the pace of technology, and help our workers survive and thrive in a digitally disruptive world.
I am not so concerned about the older generation. They are the lucky ones: they have retired. For them, the television was the biggest technological breakthrough – and they still have their TVs. Their expectations were pretty straightforward. They would go to school, finish their education, build their skills and base a career on these skills until they retired. Sadly, soon after that, they expected to die.
I’m also not too concerned about the millennials. They grew up in the digital revolution. Millennials know the skills they build will not last, and they expect their lives and careers to be in a world of constant change. They also expect to live to 100.
I’m most concerned for the workers in between: employees – like me – who are over the age of 35 but not close to retiring. These workers make up the vast bulk of the workforce. At Westpac, they account for around 65 per cent.
For our generation, the VCR was the breakthrough, and we’re still missing it since it died. I’m sure I’m not the only one whose kids laugh every time I ask them to “tape” a program. Like the older generation who we learnt from, we also expected our skills to last our career. With the entrance of the digital revolution, that expectation no longer holds, especially when you consider we will live and work longer than we expected.
There is a small subset of us who love change, but for the majority, our stress levels go up as organisations increasingly use technology to try and change twentieth century business processes. Most of us resist and try to slow it down, because we’re thinking “if I can hang on to the skills I’ve got for another five to 10 years, I’ll be fine”. But in reality, we have a long working life ahead of us.
To help keep these workers out of the boiling water, I believe we must solve three challenges around how we deliver work, how we manage people and how we resource work.
The traditional waterfall delivery of change has worked for years. It is well suited to a slowly changing world that valued command and control over change and adaptation. These methods simply don’t stand up in the digital revolution and most large organisations are already moving towards agile and flexible working principles, supporting their people to think differently and thrive in a flattened structure.
This new method has already become the norm for many of Westpac's workforce. Around 40 per cent of my tech team in Australia is already using agile methods for delivery and in New Zealand it’s 100 per cent.
But this is the easier of the problems to solve. How we manage people is a little trickier. Nearly all enterprises are still working in the world of hierarchy. The boss sends out orders to middle managers who send them on to the workers. This vertical operational structure works for a slow moving enterprise-centric world, but in times of rapid change and customer-centricity, we need to turn things sideways and start thinking horizontally.
Traditional hierarchies need to be cut down, and workers need to feel empowered to embrace a new way of working.
At Westpac, we launched what we call ‘Motivate’ last year to modernise the way we think about performance, development and reward. Our people are now in charge of their performance and leaders are there to support them. This positions us well, but we know more needs to be done. I truly worry about the organisations that haven't even started.
The third challenge to solve – and perhaps the hardest – is how we resource work.
In a slowly changing world, we approached resourcing by hiring people and augmenting their resources by sending them on courses, like leadership and PowerPoint training. But when their core skills ran out, our refresh model was to make them redundant and hire new people.
Clearly, this was not ideal for the worker and, over time, has become more costly and less efficient for an enterprise. In a world of digital revolution where changes are happening fast, this model is unsustainable and is already straining at the seams.
We can’t continue to refresh our workforce by continually going to the market. Instead, we have to refresh from within and do this continuously. This requires organisations to create the mechanisms and tools to enable workers to refresh.
At Westpac we have created the LearningBank and TechU – our technology university – to encourage social, collaborative and gamified learning, available to employees, anytime and anywhere. It’s a prime example of the changing landscape of corporate learning, shifting from skills augmentation to one of more constant reskilling.
At the same time, the motivation of the person has to be there and – right now – when the workforce is hanging on by its fingernails, we are resistant.
While the obligation is on both to change, the obligation has to be on leaders in organisations to move first. We need to get to a point where our people are taking charge and wanting to upskill and we're helping retrain them so they can continue to adapt.
We can’t simply wait for the workforce to be taken over by millennials – it’s going to be too late. We also can’t just wait for 30 per cent of jobs to be automated. Workers will (and should) be here for quite some time and to support this, we need an agile workforce that is willing and able to adapt, change, and embrace the opportunities of the digital revolution.
Imagine this: What if your employer gave you the space and skills you need to keep adapting? What if you felt safe calling out when a system needed to be made redundant, knowing you wouldn’t be made redundant with it?
What if we didn't expect the boss to know all, but we worked in dynamic, agile networks that were constantly testing and learning?
What if everyone embraced the digital revolution and we transformed our twentieth century businesses with twenty-first century technology, leveraging twenty-first century leadership?
These are the questions we should be asking today. This is not tomorrow’s problem. The digital revolution is here. We, as leaders, are not adapting quickly enough. The water is boiling. And if you think you’re safe, just remember: even Kermit got fired.
This is an edited version of a speech to be delivered today by Westpac’s Chief Information Officer, Dave Curran, at a Trans-Tasman Business Circle event.