Best practices of business development

The IT service industry is currently undergoing a profound transformation. Digitization is making its way into companies with all its might: According to Capgemini's IT Trends Study, digitization is still at the top of the priority list of all CIOs in 2020, although the results or successes are significantly lower than expected. Capgemini lists the following factors as the five most important conditions for the success of digitization:

• Formation of interdisciplinary teams
• Hiring employees with the appropriate know-how
• Expansion of cloud capacities
• Use of intelligent technologies
• Expansion of data analysis and networking

The topic of interdisciplinary working and thus also the trends of agility, which have gained explosive importance in recent years, therefore make the difference as to whether companies can really achieve success from their investments in digital expansion or not. Already in 2017, SERVIEW postulated in the context of our Best Management Practice Congress:

"The focus of SERVICE 4.0 is no longer on feasibility and practicability through technology or the technical capabilities of manufacturers, but on acute customer needs and their increased reference to business process integration. A focus on the needs of customers with simultaneous individualization of the service offering and flexible additions to the service portfolio are key topics for the coming years and will make their way into the service world in giant strides."

The four phases of corporate development

The technical possibilities are already available to us. But the much more pressing question is whether service organizations are up to them culturally. We want to demonstrate this question using a corporate development model by Friedrich Glasl, who has advanced the understanding of leadership and conflict for companies like no other.

This model will now be presented very briefly in order to then shed light on the question of which of these stages is required for truly digital working and whether companies are already up to this challenge. It describes corporate development in four phases: The pioneering phase is followed by the so-called differentiation phase, then the integration phase, and finally the association phase.

• The pioneering phase is characterized by a very person-centered and flexible culture. Every employee shows and experiences his or her own potential for further development and in turn drives the further development of the organization. This culture can be observed very well in start-ups.
• If the company becomes too large, clear structures become necessary. This is what the differentiation phase brings. The company is given a clear structure. Departments and hierarchical management levels are created. The units become increasingly specialized and focus more and more only on their own results.
• Sooner or later, the awareness arises that no good results can be achieved with silo thinking. In the integration phase, organizations strive to break down the boundaries between departments and teams and reawaken collaborative work. Here, management must consciously address a common vision and goals for the company in order to rebuild togetherness. Once this phase has been successfully achieved, the departmental boundaries are permeable membranes that give structure to the holistic work.
• The association phase occurs when organizations realize that they achieve the best results for all stakeholders in close partnership with their environment. This does not mean cartels, but an understanding of our holistic responsibility for our environment and our customers. Closely linked value chains from the original producer to the consumer and disposal are established in this phase.

Joint development is the trump card

Work in digitization will bear its greatest fruit when companies rise to the challenge and move into the association phase together with their providers and customers. They need to strengthen networks and think in terms of shared outcomes rather than "just" services. lan Altman writes:

"Customers are sick of investing in solutions that do not deliver the intended results.
Top performing companies will invest in an approach to ensure success of each project for each customer. Doing so will lead to high customer satisfaction, and repeat and referral business. "

To achieve these results, companies need to think even further down the value chain than they have in the past. We have to really understand what our customers want to achieve and adapt our services accordingly. Because "cheaper" always works. Organizations need to stand out in a different way: by being truly customer-centric.

But are companies ready for this shift? From experience, the answer is no. Most organizations have defined processes and services in which they work or want to work. There is more structure, clear role assignments, and often a clear shared understanding of what should be delivered when and how. In many places, this evolution makes employees' day-to-day work much more effective and efficient, even though the transition has been intense.

Get out of silo thinking!

However, we still have a major change ahead of us. In order to really move with the times, to be successful even in times of networking, we have to get rid of something that has become dear to many managers and executives: thinking in terms of departmental boundaries. What still counts for many managers - and also their pay - is the number of people they manage in their team or their department. In the IT world, which has been thinking about the concept of "service" and writing down customer orientation for thirty years, we still see clear symptoms of the differentiation phase: Massive disruptions are re-categorized so as not to reflect badly in one's own department, but in another. Two departments start parallel projects with the same content because their own initiative has much more value than that of the "others".

Many of the newer frameworks have named and recognized the linking and collaboration of different teams as a critical success factor. One of these frameworks is the talk of the town thanks to its successful application by Google: OKR (Objectives and Key Results).

With DevOps and OKR to holistic business development

Objectives and Key Results is about the common focus of all efforts in the organization on the same big goal. The teams and departments disclose their "Objectives" just as the company management does. These goals, in turn, are made tangible and measurable through self-defined Key Results, which teams remain accountable for achieving. With transparency and a common goal at its core, OKR dissolves the walls between business units without disrupting the organizational structure itself.

Incidentally, this basic idea is also represented in DevOps. Here, for example, it is a matter of always keeping the end result in mind when creating services ("Create with the end in mind"). We only deliver real added value if we really think holistically and apply this mindset throughout the entire company. This is not a change that can be implemented as the next project in the next three months. But it is an issue that you must initiate in order to successfully move into the future. Realize the holistic way of thinking step by step in your company.

The model of enterprise development suggests the following initial steps for this purpose:

1. Specifically address the vision and mission of your company. Define the mission statement for your organization - and involve all employees in the process.
2. Sit down together with all managers and consider how you can implement and strengthen this mission statement. Actively promote and demand a change in thinking at all levels, in which the guiding question should not be: "What does it bring to my team?" but always: "What does it bring to our company?" - or one step further: "What does it bring to our customer?"

Achieving added value through best practices

Of course, focusing on the company as a whole or on the customer should not mean that managers should not take care of their employees. On the contrary, managers are increasingly becoming service providers whose job it is to create the best possible working conditions for their team. Managers are supporters and contacts for their employees so that they can achieve the desired business results within the scope of their tasks. As Krause and Kiefer write, "A manager who does not create value for his or her employees is useless."

The realignment of companies under the sign of digitization also does not mean that proven frameworks such as ITIL and PRINCE2 or newer works such as Scrum lose their validity - on the contrary. Such best practices offer us an opportunity to draw from a wealth of experience and to use proven procedures for ourselves. But this is just one side of the coin. The human factor represents the second decisive side. ln the COBIT 2019 framework, this is figuratively described as follows: We can write processes and guidelines galore, we can define decision paths and establish hierarchies - if the culture is not right, all we have is the effect of black inked paper.

True corporate development means cultural change

In summary, in order to survive in the IT industry, which is growing ever faster and evolving technologically with great strides, we need the cultural change that puts the focus on the results of the customer and the overall organization, while putting our own results on the back burner or making them holistically dependent on them. We need a reinterpretation of "value creation" in our organizations - one that transcends departmental boundaries and, in the next step, corporate boundaries. This reinterpretation must be exemplified by the top management levels in the organization and supported by all employees. View your company holistically, involve everyone according to necessity and possibility. Actively promote and encourage collaboration across departments. Define performance indicators that emphasize this holistic approach and can only be achieved through collaboration.

Support the employees in your company in this cultural change. Because such a rethink is a very difficult and lengthy process that people cannot go through alone. But the sooner you take the first step, the sooner your corporate culture will be ready for the challenges of the networked and agile world.