Digital Storm and the challenge of leading in a post-pandemic world


The digital transformation movement is just beginning and the only way to react to it (and escape the "curse of the 20th century") is with new models of strategy and leadership


We are living in extraordinary and challenging times, plunged into one of the greatest crises in modern history. In parallel, the software continues to engulf the world (Marc Andreessen, 2011) and enabling an unprecedented and radical change in values and consumption habits in any and all industries, on a global scale. In the corporate world the big question is: how should companies react to this digital storm that is just beginning?


Right now, to react is to transform. 


Strategic thinking and leadership model.


Here, we are talking about changes in two interlinked issues: strategic thinking and a leadership model.


Strategy in the digital world


at the turn of the 20th century to the 21st, American academic Clayton M. Christensen first introduced the concept of disruptive innovation in the classic 1997 book The Innovator's Dilemma. Two years later, Stephen Coley, Mehrdad Baghai and David White publish The Alchemy of Growth, presenting the Three Horizons of Growth model. In the last two decades, these works were decisive in the evolution of the vocabulary that companies applied in the design of their innovation strategies, balancing the focus of investments between developing current businesses and creating new growth options in adjacent markets, in addition to options / hypotheses disruptive growth for the future.


With the lantern at the stern, it is not difficult to point out today a serious flaw in this "classic" view of innovation models: the hypothesis of a strong correlation between time and level of uncertainty. These uncertainties are basically about [1] market acceptance, [2] technological feasibility and [3] scalable business model. That is, the flaw is the view that the more radical an innovation is, the greater the number of uncertainties that will have to be addressed and, therefore, the more time it needs to mature and scale. Is that so?


The evidence shows that it is not so; an increasing number of digital natives are emerging in different industries, dethroning once unchallenged leaders. And not just digital gorillas like Apple, Google, Amazon and Facebook, but new actors like Tesla, Uber, AirBnB, Netflix and an endless list of iconic companies are radically accelerating today's digital Darwinism.


The root cause is the advent of a huge set of technological and methodological possibilities for dealing with uncertainty; this is all fueled by the drastic reduction in computing and data handling costs, the mastery of social media and other profound changes in society's values and behaviors. 


The result is a strategic imperative for companies to transform at a new speed and also in unprecedented directions. The "curse of twentieth-century leaders" is that these companies have become large corporations for the excellence in quality management, productivity, supply, distribution and complexity on a large scale. The challenge is that the refined culture and management model to efficiently manage this large and complex operation are precisely the elements that prevent the company from being faster and more innovative, and therefore more competitive in the digital century.


In practice, the change is to find an organizational and operational model designed to change at the speed of its customers, to adapt continuously without the need for the classic and increasingly frequent "corporate reorganizations". That would be the foundation for creating an innovation-centric strategy, or a digital strategy, if you prefer.


Leadership: Lean Digital


From a methodological point of view, I participated intensively in the last two decades in the creation of a comprehensive and powerful framework that we call LEAN DIGITAL: the combination of digital disruption, characterized by the aggressive use of technology, data and design with the discipline of lean thinking and its unfolding in a leadership and operation model aimed at learning. This journey is documented in the recently released book "Faster, Faster: The Dawn of LEAN DIGITAL", which has my participation as one of the authors.


According to the pillars of LEAN DIGITAL, the sustainable transformation of a traditional organization requires three major redesigns. 


The first is the most visible: a new way of conceiving, building and evolving digital products, experiences and platforms. Of course, it's about squads, agile, DevOps, design thinking, microservices, cloud, kubernetes, machine learning and an endless list of methods, practices and technologies. The other two are less visible (and perhaps less glorious), but just as important. 


The second redesign is the management system, this means the way the company plans, makes budgets, reports and activity management. This new management system will be the connector of the strategy with the daily work of the teams. 


The third change is a new approach to leadership development, to foster new skills in executives, and management. As the embryo of creating a true digital, collaborative and innovative culture: managerial behaviors are leaving the scene and opening the stage for collaborative leadership habits.


Perhaps this is the main bottleneck for change: in general, most of today's corporate leadership has achieved a successful career within the classic model of the industrial century, which is based on [1] being in control; [2] know the answers; and [3] not to make mistakes. You can't think of leveraging innovation and agility using this leadership style, known as Command and Control. To play in this new world of the digital economy, leaders are needed [1] to inspire, translating strategy into purpose; [2] that promote the obsessive learning mentality; and [3] that also create an environment for experimentation for both risks and errors. 


This change is not simple and much less rapid for the leader; however, it is absolutely possible: an example of this is my own story, my personal journey of change. As I continued to develop my technical skills in finance, marketing, operations and technology, I plunged headlong in search of a new set of social skills, to better understand people, practice empathy, collaboration, co-creation. Over the years, I have been abandoning the scientific manager archetype and becoming a more collaborative and therefore more useful leader.


THE MORE TECHNOLOGY, THE MORE THE HUMAN FACTOR


The challenges of strategy and leadership are on the table and there are already promising ways to give speed and consistency to the inevitable changes in the corporate environment. I finish this text with a reflection: from my personal experience, with 25 years living full-time and passionately in the untimely technology industry, the greatest learning that remained with me, and even redefined me as an entrepreneur and as a leader was: the more technology is the protagonist, the more important is the human factor. Technology doesn't innovate (at least not yet), but people do. Technology is not breaking down barriers in any sector or market, but people are. After all, being a leader in the 21st century is giving a human face to leadership.


Originally published in  MIT Sloan Review Brasil.


Cesar Gon

Cesar Gon is an entrepreneur in the tech/digital space. He taught himself computer programming by the age of 11, and at 13 sold the code of a chess game to a tech magazine. At the age of 23, he founded CI&T, a pioneering digital service company to help large enterprises make shifts at scale, connecting business outcomes with technology solutions. Under his leadership as CEO, the company achieved 25 years of consecutive growth and global expansion. Gon is a Computer Engineer, with a masters degree in Computer Science from the State University of Campinas. He is also an active investor in venture funds and startups. In 2019 he was awarded EY Entrepreneur Of The Yearâ„¢ in Brazil. Has three children, loves tech, lean, wines, cigars and football.