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Danfoss eSteering Way: How Do We Work Without Managers?

Written by Vivek Menon, Senior Director and eSteering leader at Danfoss Power Solutions. 

 

One of the first questions I get asked when we talk about our self-managed journey is, how do we work without managers? And ironically, this question usually comes after the comment, “But no one tells us what we need to do, we are already self-managed.” 

My answer with a big smile usually is, well if that comment is true, then there shouldn’t be any problems. But what I have observed is that individuals are self-managed in their own tasks and accountabilities but not necessarily self-managed as teams. What I mean by that is, if there are differences of opinions on priorities, activities, directions, clashes of personalities or resources which are not resolved between two individuals, then there is usually an escalation to the manager or managers (if the two individuals belong to different line functions).

So, then the article’s headline question starts to form, and I see it as a question of how we handle these situations in a self-managed organization. When there is no manager or managers to escalate to how do we handle such issues which could be strategic, technical, commercial or people related? 

Answering this natural and pertinent question is part of going deeper into the “structure” from traditional hierarchy to self-managed. In the previous overview article Self-Managed teams – the Danfoss eSteering way, we spoke about how structure is one of the 3 elements besides “processes” and “mindsets” that need to be changed in this type of organization. 

 
Learn about digital culture in organizations: Join Vivek Menon’s panel discussion called Take the Risk, Fail Fast, and Learn: Enabling a True Digital Culture In Your Organisation at our exclusive event in Denmark, Digital Advantage.
 

To answer this question, I first go back to what key activities a traditional manager does. A manager usually must perform a mix of two key types of roles: 

  • Functional roles: This role usually covers strategic direction setting, goal setting, short-term prioritization, decision making, budgeting, functional conflict resolution, functional expertise or mentorship, KPI accountability, facilitating operational and governance decision meetings and keeper of time, history of decision and actions and follow up. 
  • People roles: This role usually covers people development, performance management, hiring and letting go, compensation, resource management, people conflict resolution, team well-being, reporting and administration activities. 

Now the first thing you need to understand is that whether you have managers or not, you still need all the above activities to be handled well for the success of a team. 

 

No manager does not mean, no management 

 

So, what we do in our self-managed organization is to split these key roles and activities into multiple roles and accountabilities. There are two key advantages of this approach a) Decentralization and empowerment into multiple roles and b) Breaks the myth of the manager as this all-knowing, all-capable person or individual. We all know it’s nearly impossible to find a person who is excellent in both the people management roles and the functional management roles equally or at the very least, can juggle both types of competencies effectively at all times. 

So, let’s break down the two types of roles and how we handle them in Danfoss eSteering. 

 

Functional Roles

 

For handling the accountabilities of a manager in his functional role, we took inspiration from Holocracy and Sociocracy 3.0. We split and decentralized the main functional accountabilities into 3 main roles: Lead Link, Facilitator, Secretary. We have taken the roles as described by the Holocracy and used them in our context as below. 

Lead Link

The lead link is the keeper of the purpose of the team and sets the future direction and priorities of the team/circle. He/she is also responsible for the KPIs or success metrics of the team and ensuring the right resources (people and money) are available for the team’s accountabilities. The distribution of roles within a circle is also the lead link’s accountability. Any non-delegated role or accountability also lies with the Lead link. 

Facilitator

It is basically the facilitator who is “running” the meeting and ensuring a non-hierarchical, consent-based decision-making process is followed in the circle. Here is a video describing how we run a consent-based decision-making process, inspired by Sociocracy 3.0. The facilitator proposes the short-term prioritizing of the topics, whether it be operational or governance meetings. It is critical to separate the role of lead link and facilitator between two different individuals as the facilitator is a counterbalance to the lead link role. This is especially true for teams that are starting from traditional hierarchies and a former manager is taking on the lead link role. 

Secretary

The secretary is the memory of the team. In this way the secretary is both responsible for capturing actions formed in the meetings, updating our roles and setting things straight when we do not recall what was decided or how a role or one of our policies should be understood. Anyone who has used the “power” of capturing meeting minutes as the main decision agreement knows the power of a secretary’s role. Where the facilitator drives the meetings, the secretary ensures that the frame for the meetings is optimal. That covers both frequencies, scheduling of meetings and selecting software for the team that ensures maximum collaboration. 

 
 

People Roles 

 

This is where we are creating our own replacement of the traditional manager accountabilities and are evolving them as we go along. Just because we don’t have a manager does not mean that we do not need people processes and activities. So, we have started to define roles that support replacing these accountabilities with new roles in the business. 

Sparring partner

People development is a very important topic for us. We believe every individual owns their own development path and goals. However, we see there is clearly a role needed to take the sparring with an individual and support in creating their development goals and the progress of these defined development goals.

However, what we saw as a limitation in the traditional way was that taking this discussion only took place with the manager and their employee. This we believe is limiting both the manager and employees. For example, cases where the desire for development for the individual is a new area or competency where the manager might not be able to guide in the right way.

A sparring partner is therefore a mentor/coach of your own choice, who is a facilitator of an individual’s development and who you feel comfortable discussing your own personal development. The sparring partner can also facilitate 360 feedback on the individual’s activities. We have cases where product-focused roles chose a mentor who can support them in developing into project managers. We have also seen that this is something that needs to be trained for both the sparring partner and the employee. 

New roles

Besides the sparring partner we have also developed new roles within eSteering team to handle the different people activities. One of the roles of a traditional manager is to hire people. For this very specific time-limited and outcome-based role, every team can appoint someone on a Hiring role for any new position that they want to fulfill in that team/circle. To add to it, we also have added the element of team hiring instead of individual hiring.

Another aspect of a manager’s role is to ensure the well-being of the team. Having a healthy workplace and a fun place to work is critical to employee engagement and happiness. For this, we have a Well-being role and they have taken the role further to form a team of CFO’s (Chief Fun Officers) and are organizing team events and activities.

Another key role that managers have is communication with various stakeholders. To cover this role, we have added multiple roles for communications internally and externally and we call them Bards. As we go along, we might have to define more such new roles based on the accountabilities.

Self/Circle

Besides the above-mentioned roles we have ensured that all other accountabilities of the former manager have to be covered by the circle and its purpose. Every individual is empowered to bring “tensions” to the circle they are members of. Tensions can be both an aspect of change for the better (what could be instead of what is) or concern like a conflict they are not able to resolve and get support from the team to move forward.

We have a Danfoss Behavior that we call – “Run the business as your own” and we live that spirit in eSteering. This means that everyone has an obligation to bring forward the tensions they observe and get support to solve them by following a consent-based decision process. Taking empowerment also means taking responsibility for problems and issues and managing them in a mature professional manner. This is especially true in cases of conflict between individuals.

These tensions are raised and solved in the meetings we have. We truly believe that when we can solve conflicts and solve issues in our personal lives, we should also be able to handle them in a good way at work too. We have also enabled our teams with extra support by providing soft skills training into conflict resolution, communication and facilitation and questioning techniques.

 

So, this is how we are currently working without a manager in eSteering

 

This requires team members to be able to consider topics beyond their own area of work and be open to helping each other based on their passions and interests. For all of this, transparency is the key so that people can support making the right decisions for the business. This doesn’t mean only easy or fun stuff, but also harder decisions when you need to re-prioritize activities or reduce budgets. Having said all this, we are still learning and evolving and probably need to work with more in specific areas to clarify further for e.g.: development paths. The good thing is that until we have defined it, we can still use existing processes for the same. 

And what about former managers? Well, for those who are passionate about the above specific roles, they are continuing to fulfill them as selected by the teams and those who prefer to avoid specific accountabilities or roles for whatever reasons can now take on new roles and accountabilities that are more suited for them. This splitting of people roles and functional roles is really something we believe is good for organizations and teams as not all current managers enjoy both sides of the roles and by splitting the roles, we enable breaking the myth of the all-knowing manager. 

 

 Continue reading Vivek Menon’s work on the Danfoss eSteering Way: 

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Hartung Wilstermann: Surviving Disruptive Trends Through Change and Adaptation

Major industries of the world experienced a massive shift due to the pandemic with many corporations navigating through the disruptive scenarios hoping to achieve growth and recovery in a post-pandemic landscape. 

For Hartung Wilstermann, Executive Vice President Battery Systems of Webasto Group, the journey towards achieving growth is to understand one simple truth: change and adapt.

In this interview, Wilstermann discusses and explores a wide range of topics such as the future workplace, the megatrends that the automotive industry needs to know, and how all of it comes back to the need for change and adaptation.

 
Want more insights on the automotive industry from Hartung Wilstermann? Join him and many other industry leaders in Management Events’ IndustryForum Automotive event in Germany.
 

Understanding The Post-Pandemic Landscape and Challenges

It’s safe to say that everything changed due to the pandemic and with the economies opening back through rampant vaccination, corporations are preparing future scenarios to keep up with business growth in 2021 and beyond.

However, Wilstermann believes that the focus should not be on creating scenarios or predicting the outcomes of the future. Rather, what is important is for organizations to understand that reacting and being flexible to situations that arise should be the priority.

 

What is your outlook on the European automotive industry in the latter half of 2021?

 

My personal opinion here is, let’s not try to find the right scenario for the future. Instead, understand that whatever you have planned, will come differently.

Of course, you can have plans and scenarios, either internally or through different companies that are analyzing and predicting what will happen in the industry. However, if you look at the past year, they have all been wrong.

Nobody foresaw Corona(virus), and nobody was prepared for the crisis.

It is not that important to predict or analyze what will come. It is more important to be able to react to whatever will come. So for me, the answer is, whatever happens, we need to be prepared to react and be flexible to the situation.

Be flexible, have your scenarios but expect it will come differently.

 

What about post-pandemic challenges for the European automakers? Will it be different?

 

Again, it’s not new and there will always be new changes and challenges. Our whole life is nothing but changes and currently, there are several big changes in society that corporations need to keep an eye on; namely, autonomous driving, connected vehicles, and e-mobility.

These are well-known megatrends that we need to focus on, that is clear. 

But for the European automakers, the challenges are the same as it was in the past. They need to adapt to new realities, be it to jump into services, invest in e-mobility, or autonomous mobility. 

This is my key point here. Corporations must react faster to the changes because the changes are occurring faster and faster.

 

Interconnected Industry Megatrends, Climate Influences, and The Speed of Change

2021 kickstarted a global effort to bring COVID-19 under control through massive vaccination and a reenergized global agenda towards climate change. There is no question that 2021 will be a year of transition, but how has it affected the megatrends amongst major industries and the automotive industry in particular?

Wilstermann highlights that many facets of the automotive industry’s megatrends have shifted towards sustainability and e-mobility, in addition to digital transformation, and how change is at the core of all these megatrends.

 

What are the key megatrends or changes that will drive growth for the European automotive industry?

 

The big ones are the well-known ones. You have digitalization, which can be a megatrend and a source for change.

And then you have e-mobility, which for me, is something which I have believed in 15 years ago and is now coming through. And the e-mobility trend will not just be batteries, it will be a global trend, for all the mobility that we have on earth. Like aviation, automotive, and marine mobility.

Another megatrend is the speedup of changes. The speed of change is a megatrend itself because it influences all of our challenges and pushes organizations to adapt. The world has become closer and globalization has shown how connected we are on a global scale.

And when one industry goes down, it influences the rest of the industry as well.  A virus can influence the production of chips and the supply chain, which shows how fully integrated and highly connected our industries are.

Yes, organizations are reacting to this, by getting more local. But we need to get faster. To react and still be calm when we experience changes. 

And of course, we also need to adapt to climate change. It is something which we can see, and is happening now. Climate change will influence the way we need to think, the way we need to act, so, I would also call it a megatrend. 

It might not be one which we like to have, but it is happening. It is a megatrend we need to understand and realize it is there. It will influence our way of thinking, of acting, and therefore the industry.

 

The New Balance of Future Workplace and The Roles of Leadership

The pandemic has disrupted the structure of the workplace as more and more corporations have adapted to the idea of mobile work offices. However, finding the balance for the future workplace is a question that many leaders within the automotive industry are struggling to answer.

For Wilstermann, the focus should not be on finding a single solution or a sweeping generalization on what the “next-normal” workplace will be for an organization.

But rather, to adapt and change as necessary, create a new balance that works for the culture of the company and at the same time, having those in the leadership roles lead the way for these changes.

 

What will the “next-normal” workplace look like and how can organizations achieve it?

 

The “next-normal” is something we cannot predict. But, we can create it.

We can create it by understanding what are the needs of the workplace, and what are the changes.

For example, before COVID-19, most companies were reluctant to have mobile offices. Now, we’ve all understood that mobile offices are possible because we were forced to do it.

Will we stay completely with mobile offices? Of course not. 

There needs to be some kind of balance where we will integrate this new change into the new workspace. Yes, there are a lot of different solutions depending on the department, but the new reality will be a very diverse one.

Each area, each department, each team, needs to find its balance and adapt it to the changes that will come up. So this, for me, will be a new reality. It is much more flexible and more reactive to the needs of the customers, the employees, the industry, and the megatrends.

 

What role should those in leadership roles play to help transition into a diverse workplace?

 

For me, the most important part of leadership is to lead people, and sometimes also results. This also means that you need to create an environment where people can do their jobs.

And being in that leadership role means setting an environment that allows people to adapt individually and react quickly to changes.

Leading, or being in a leadership role, does not mean setting a goal and waiting until somebody reaches those goals. It means creating an environment that allows people to adapt, fast and individualized, to their needs while still being part of the team.

This is what I would call, real leadership. It is setting the environment for people so that they can find their solutions. Not setting solutions, or defining what the “next-normal” will be, how it looks, or how it will work.

 

Adaptation Is Key In Organizational Structures And Embracing Change 

Corporations are constantly in search of the perfect organizational structure that will help align their vision and drive growth, especially in today’s volatile market. 

With major industries within Europe pushing towards Sustainable Development Goals (SDGs), corporations are scrambling to find and develop the necessary elements needed to overcome the disruptive changes coming due to sustainable initiatives. 

But as Wilstermann points out, there is no “perfect” solution or structure, and that companies must react and evolve constantly to the changes that occur within the industry.

 

How should organizations structure themselves to overcome disruptive changes such as Sustainable Development Goals (SDGs)?

 

I would say it is very important to first understand the history of the company, the mindset, and the culture of the company. 

There is no one organizational setup that is the best as there are many elements that you need to take into account, such as the culture, product, and even the size of the company. 

The only consistent element that I see the same for every organization is the need for change and adaptation to the megatrends, the society, your customers, and the competition.

The best setup is to have a continuous improvement and change of the organization and not assume that the organization you have now will be the same for the next ten years.

If you’re open to changes, you will be able to find the perfect organization for this point in time, in this situation, the environment you are in, and for your industry. And tomorrow, it will be a different one. 

But, if you’re open to adapt, you will find another setup.

Of course, it all depends on different factors such as region, product, history. Adapting to all of these factors and elements will lead to a temporarily optimized organizational structure.

 

What advice would you give to organizations on overcoming changes from disruption?

 

Let me share a personal experience from when I was in the Philippines for one year. 

Coming from Germany where everything was structured. Safety was, for me, having insurance, enough money, and all these things which were related to planning and stability. 

Then going to the Philippines, and seeing how different it was. I came back with a different understanding of what feeling safe meant. 

It was not having money, insurance, a car, plans, and so on.

I came back with the understanding that feeling safe means having the confidence of being able to deal with every upcoming change. 

Do not try to avoid changes and replace them with plans, which will never come true. Rather, it is necessary to adapt to the future, deal with all the changes that come from disruption, and keep pace with the speed of the changes.

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Rune Todnem By: How You Can Provide EPICally MAD Leadership

During these uncertain times, organizational leaders are under pressure to perform their best as the world moves into a more digitalized and sustainable direction. The development of technological literacy has become increasingly important, in addition to soft skills such as adaptability, agility and empathy.  

What challenges lie ahead of leaders today? What aspects of current leadership practices need to change? Rune Todnem By, Professor of Leadership at the University of Stavanger provides illuminating answers to these questions and more.  

 

The Greatest Leadership Challenge Moving Forward 

 

By argues that the main challenge lies in the very core of how we understand and practice leadership.  

“The greatest challenge is not globalization, COVID-19, digitalization or any other current event, but rather that we currently have a very narrow and limiting understanding of leadership.” He refers to the tripod understanding which consists of the relationship between leader and follower, and the delivery of shared goals. This concept, being the basis for almost every single leadership theory and practice results in behaviors that are traditional, conservative, and limiting.  

“It also leads to monopolizing the doing of leadership to a small group of individuals – who are in fact no more capable or ‘special’ than anyone else. Often, they just happen to be white, middle-aged men with privileged backgrounds. We are quite simply not as equal nor diverse which we so often like to think we are.” 

“We are tied up in an outdated understanding of what is leadership. This does not bode well as it prevents us from finding the best solutions to the challenges ahead.” 

Professor By dissects the tripod understanding of leadership further by explaining why ‘follower’ is not a positive word. He suggests it implies that “most of us do not have a mind of our own, cannot contribute independently, and require someone – a ‘leader’ – to push the start button for us to wake up in the morning.” 

Additionally, he argues that shared goals are often not shared at all. “These goals are decided by someone else in an organization for reasons of short-term profit-making and efficiency gains. Organizational members do not have any shared ownership of these goals because they were never discussed with them.”  

Therefore, it becomes very difficult to contribute to the delivery of such ‘shared’ goals as most employees can simply ask “Why should I contribute to something I don’t understand I was involved with or agreed to?” 

Addressing this challenge 

When By gets invited by an executive group to give a talk, he will first ask them for a definition of ”leadership.” 

“They end up not defining ‘leadership’ but ‘leaders’, in terms of their skills and characteristics,” he says.  

The solution to this challenge starts by understanding that leaders and leadership are not one and the same. Many leaders do not provide leadership, and many who do provide leadership do not perceive themselves as leaders. By says that people get surprised about this difference because “we were brought up in a society where it is suggested that leadership is something only leaders do.” 

Changing the language used to understand leadership is essential. By mentions that “there are alternatives out there” and recommends a 2008 study by Drath et al. on the DAC ontology which stands for Direction, Alignment and Commitment. To shed light on the DAC alternative, By has further developed the model in his recent 2021 article, Leadership in pursuit of purpose, calling it the Purpose, Alignment and Commitment (PAC) model. 

“Purpose is much bigger than just direction. Direction is something that can be changed in order to deliver on purpose,” he says. When leaders ask themselves “Why do we exist as an organization?,” it should encourage them to pursue purpose beyond profit, with proof suggesting such an approach will better support sustainable profits. More importantly, this can be aligned with individual purpose which is becoming increasingly important both in recruitment and retention. By suggests that organizations need to start focusing on providing people with a purpose rather than a bonus.  

 

What It Means to be EPICally MAD

 

A highlight of Professor By’s work is the concept of EPICally MAD as presented at TEDxStavanger:  

E for Energy:  

By likens human beings to a fully charged battery after a good night’s sleep. “Our batteries should be fully charged, and it’s up to us how we want to spend this energy,” he says. He reminisced about being a founding member of the Public Leadership Foundation (PLF), where responsibilities were allocated based on what provided members with energy. “For example, I’m not good with numbers but it energizes other people! So, they took that responsibility. The way we work, support and challenge one another should be done in an energizing way.” 

P for Purpose:  

“We all have a purpose in life. We just need to discover it – and the same goes for organizations.” By says that there is nothing wrong with making a profit. In fact, it is a necessity for organizations in the private sector. “We should acknowledge and adopt the power of profit AND purpose. Having a purpose beyond profit is a strength, not a weakness.” He adds that organizations can base recruitment, advancement and bonuses on such a purpose, a purpose which should “last for a minimum of 100 years and which is bigger than any new CEO.” Tables have been turned in the job interview setting, where candidates are now the ones asking hard-hitting questions on purpose. “They ask, ‘Why do we exist?’, ‘What are we doing to improve the environment?’, ‘What are we doing to improve diversity? Why should I work with you?’” 

I for Identity:  

By says that a lot of business schools take an approach of “being factories churning out people that are leaders who look and think the same”. “I don’t think it’s our place in business schools or in HR to tell people how to dress or which skills and characteristics we need to copy from some ‘great’ leader or another.” Instead, HR departments should facilitate people to become the best versions of themselves. Professor By suggests we forget about “transformational and transactional – yes, even servant leadership,” and focus on the production of Purpose, Alignment, and Commitment. 

C for Courage:   

“This is about the courage to be yourself and stand for your purpose and core values,” By says. He provides an example of a meeting when the topic of XYZ was being discussed. “You find yourself not knowing what is being discussed but everyone else – including those you later found out were as bewildered as yourself – are nodding along, nobody daring to ask questions because they’re scared of looking stupid.” It takes courage to ask, and it takes courage to support the first one asking if it isn’t you. 

Ally is a glue word and is about working together with others towards delivering on a common purpose. “We don’t have to be like-minded or come from the same background, but we’re allied in the belief of purpose.”  

Professor By hopes that the idea of everyone being EPICally MAD can be adapted into HR leadership development programs or employee induction programs in the future.  

 

Leadership is a Collaborative Effort

 

The University of Stavanger and the Nordic Institute for Studies in Innovation, Research and Education (NIFU) were recently successful in their application for the UNESCO Chair on Leadership, Innovation and Anticipation. 

“We are integrating the concept of future literacy in the chair under Anticipation. It’s about anticipating different futures knowing it is not set and that we all have a responsibility making it what it will be.” 

In partnership with UNESCO, Professor By and the University of Stavanger, and NIFU hope this Chair can be used as a vehicle to work with a range of organizations in true partnership developing both leadership and leader development programs fit-for-purpose moving forward. The next stage of the project is to identify partners to design, run and test new leadership and leader development programs with. This project will also integrate the PAC model to help employees see the link between themselves and their organizations.  

When asked about the biggest lesson from the pandemic, By says that we all play a role in our organizations and society. “Performing leadership isn’t going to be successful if we continue to perceive it as a task only for ‘special’ individuals. We must expand our horizon and acknowledge leadership as a collective process where we can only achieve our full potential as individuals, organizations and society together.” 

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4 Critical Skills Of Banking Leaders Today

The banking industry is known for constantly innovating and evolving to meet customer demands and requirements in different financial climates. In 2020, banks were forced to make years’ worth of revamps to technology and business models in a short amount of time.

Crucial skills for leadership in banking

Strong leadership in banking is crucial in these post-pandemic times as it could make or break the entire organization. Here are 4 critical skills all banking leader needs to hone to navigate today’s everchanging financial landscape.

 

Forward-thinker

 

Visionary leaders are always on the lookout for new opportunities to elevate their organizations, especially during times of crisis. Since the pandemic hit, the banking industry quickly embraced technologies such as cloud computing, wearables, and AI chatbots, to enable a frictionless digital banking experience for customers.

Shanker Ramamurthy, Global Managing Partner, Banking for IBM states that cloud computing and artificial intelligence (AI) will continue to be key tech focus areas in 2021. “For the foreseeable future, banking will operate in a hybrid, multi-cloud world. Most financial institutions are in the process of transitioning parts of their workload from their data centers into a private cloud and into multiple public clouds.“

It’s worth noting that a major part of the banking technology vision now focuses on the use of blockchain, as it has the potential to solve the drawbacks in traditional SWIFT bank transfer and the client identification system.

 
Keep up with the latest banking trends at our exclusive events in the Netherlands, Sweden and Germany.
 

Technological literacy

 

A bank’s survival depends on how quickly it could respond to consumer needs by leveraging technology to update legacy systems and help employees adapt to working in the new normal.

Hugo Nájera Alva, Head of Business Development at BBVA Bancomer, shares that it is important for leaders to always be ahead of emerging technological trends.” Competitors are no longer financial institutions, but technology players,” he says. To get ahead of the competition, banking leaders must think outside of the portals of the finance mindset.

Digital banking has undeniably been one of the largest technological shifts in the finance industry. Banks are expected to grow digitally even more in 2021 and present the following trends:

  • Personalization: Consumers want instant access to information about their finances to make informed financial decisions with the impact of the pandemic. Future financial products should be customized to their needs to drive engagement and loyalty.
  • Automation: Banks will set up more autopayment features to make it easier for customers to pay bills on time and help them reach their savings goals.
  • Real-time payments: The use of cash will slowly dwindle this year with the rise of contactless payments and e-wallets.

Technology is the game-changer in modern banking institutions. A keen eye on the latest trends and technologies will enable leaders to gear up for forthcoming challenges in the industry, simultaneously introduce new solutions to existing problems and revolutionize the banking experience at large.

 

Adaptability and Agility

 

Banking leaders need to adapt to current times and grow a mindset rooted in flexibility and agility. Many aspects of banking are in a state of flux— the viability of the branch bank model, future technological adoptions and changing customer demands, among others. Stepping out of tradition is vital given the rise of disruptions such as fintech start-ups, cryptocurrency and banking-as-a-service (BaaS).

According to Ramamurthy, “70% to 80% of all the bank tech spend is for middle and back-office operations. Maybe 20% is spent on the front end, what we call the customer-oriented, multi-channel ecosystem.” The banking of tomorrow will invert that ecosystem, as technology will be primarily used to service customers and their respective needs.

There will also be a focus on cybersecurity given the abundance of sensitive data collected in digital banking. Deloitte’s 2020 Digital Banking Report revealed that organizations are prioritizing investments in privacy and security solutions more than any other technology.

 
Don’t miss out: Connect with like-minded finance leaders at our banking-focused events in the Netherlands, Sweden and Germany.
 

Strong Empathy and EQ

 

Banking leaders must not lose sight of the most important asset of their organizations, which is their employees. The mental health and wellbeing of employees have been brought to the forefront as the negative effects of the pandemic have taken a toll on many emotionally and physically. Immediate branch closures, shrinking revenue and preparation for a hybrid work environment are huge changes that can cause a lot of stress — potentially affecting job engagement and productivity in the long run.

A good banking leader should be able to help his employees regulate and navigate these emotional challenges. According to Gartner, 68% of organizations have already introduced at least one new wellness benefit to help improve their employees’ mental health. Additionally, banking leaders must restructure working environments to prioritize job satisfaction. For employees to deliver an effective customer experience, they should have a work culture where employee experience is given due importance.

The transformation of leadership in banking is defined by these four skills for banking leaders, and is essential to guide employees and customers into the future of banking.

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Egmont Philips: Driving Growth and Digital Transformation

The chief marketing officer (CMO) role has always evolved with the market landscape. Egmont Philips, Marketing Director of DAS, believes that the time for change has come and executives now need to evolve their roles as CMO. 

What does that have to do with cooking?

In this interview, Egmont shares with us his perspective on how CMO roles have transformed to meet current markets, the challenges they face in strategizing transformation, and why you need to think like a cook.

 

Evolving The CMO Into a Digital-Driven Role

 

CMO has always encompassed numerous roles, from bottom-of-the-funnel lead generation and sales support to brand development. This has always set the role for failure as they lack the strategic, longer-term strategy of other C-level roles.

However, digitization has disrupted the traditional CMO position and has forced many executives to rethink what the term “CMO” means in today’s landscape. The effects of the pandemic are a catalyst for this development.

 

Has the role of the CMO changed dramatically since the pandemic? And is the change here to stay or for the short-term?

 

The role has changed. As a marketeer, you always need to anticipate, adapt, and change the organization. But some market developments went faster than planned. 

On one hand, digitization has a steeper development curve, which is good news for marketers. On the other hand, as platformication increases, this will lead to a faster shift of power based on customer ownership and causes many traditional players to rethink their business models.

With over 4 billion active users, the CMO needs to be able to bridge the gap between marketing and technology to successfully forge meaningful connections with its customers. Given the diverse platforms available and channels such as Clubhouse, catching the attention with the right content in the right context will require a shift from the traditional behaviors of marketers.

Of course, there are challenges when making that transition, and 2021 looks to be as challenging for the CMO as was the pandemic for businesses last year.

 

Achieving Sustainable Growth Through Data and Transformation Strategy

 

What are the major challenges you foresee in 2021 and how should the CMO overcome them?

 
  1. Growth via new business models: Digitization, platformication, the energy transition, and the need for a more inclusive world are trends that create new opportunities. It will also disrupt current business models. The speed of change is much faster than before and to succeed, the key will lie in the talents you hire and the business ecosystem you build to signal changes and develop new propositions.
  2. Resilience: For many industries, market dynamics have changed due to the pandemic. 

The way to overcome this is to develop scenarios. Use scenarios where you exaggerate variables. Think of ways to deal with extremes. This will fuel your creativity and it helps in decision-making for the short term.

While growth and resilience stand as the key priorities that Egmont highlights, there is also a growing awareness to develop sound customer experiences in both B2B and B2C markets.

The need to be an experience-driven organization is becoming important as more and more consumers (59% in a post-COVID-19 survey) are prioritizing customer experience in a post-pandemic world. 

Egmont delves into the reasoning as to why CMO is needed in this transformation and the approach that they should adopt.

 

Why is becoming an experience-driven organization increasingly important? And what is the CMO’s role in this transformation?

 

Many products have become commodities. The only way to differentiate is by building bespoke experiences, experiences that are built around a strong company purpose. The CMO is the chief experience design officer and is at the forefront of setting design criteria and building multidisciplinary teams around customer journey optimization themes.

 

How should the CMO strategize their marketing plans to improve and strengthen customer experience?

 

The struggle is often how to determine the ROI of investment in customer experience optimization and figure out how to allocate a budget. The recipe for strategizing CX is to use journey maps to pinpoint which part gets what KPIs and what investment is needed in capacity and budget. 

This allows for a simple overview that will help convince boards to invest.

As for the tools needed to help the CMO improve CX and strengthen the customer journey, there are a few emerging technologies that Egmont believes will be key for organizations to invest in.

 

What are the key tech tools that the CMO needs to focus on investing, especially in today’s “new normal” market?

 

RPA and digital assistants are most effective when used to automate processes that are of low value to the customer as well as to your company. Such as changing your address, categorizing and directing incoming emails to the right person, etc.

Data analytics are the real thing, no doubt that the CMO needs to invest in market intelligence, customer intelligence, and algorithms that help to personalize the customer experience and create higher conversion rates.

 

Reinventing the CMO role

 

Given the drastic change that industries around the world have experienced due to Covid-19, it is not shocking to think that the marketer’s role has changed alongside it. 

For Egmont, the title of the CMO has to be re-imagined, and he offers his advice on how marketers should approach the shift in marketing roles.

 

There have been talks in the industry about changing and re-inventing the CMO title in today’s “new normal” markets. In your opinion, what should it be changed to and why?

 

I am spreading the gospel of changing the CMO into Chief Customer Officer. Marketers do not only translate market developments and change customer behaviors into propositions. They have also become the orchestrators of customer journeys.

 

What is your advice for the CMO on how to prepare for the shift in marketing roles?

 

Maybe the most fundamental way to prepare is to change your self-image.

I see myself as an experimental cook. I build various propositions for several customers and personalize them by combining a basic set of ingredients in completely different dishes. Restaurants and food are like fashion. It changes every season. When it comes to experimentation with the ingredients, you need to be a bit of a chemist. 

I use this analogy when approaching market research, data analysis, creating propositions, and managing the team in the marketing kitchen.

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Das sind die Geheimnisse guten Managements

Die Managementweisheit des letzten Jahrhunderts geht auf keinen Geringeren zurück als Jim March, den unlängst verstorbenen Vater der modernen Organisationslehre. Bereits in den 1950ern proklamierte er, dass langfristig erfolgreiche Unternehmen sich sowohl der Suche nach Neuem – vornehmlich durch Ausprobieren – als auch der Prozessoptimierung und Effizienzsteigerung des bestehenden Geschäftsmodells widmen müssen.

 

Dass zwischen beiden Ansätzen ein Spannungsfeld besteht, ist offensichtlich. Für das erste braucht es eine Kultur mit Kommunikation quer durch die Organisation, in der Mitarbeiter frei von Druck, Ängsten und kurzfristigen Gewinnzielen experimentieren können. Effizienz hingegen fordert maximale Spezialisierung und Reduktion unnötiger Kommunikation.

 

Lösungsvorschläge an Topmanager für das eine wie das andere gibt es zuhauf. „Agiles Management“ und „Empowerment“ in dezentralisierten Organisationen auf der einen Seite; klassische Hierarchien – also gestaffelte Systeme von Autoritäten – auf der anderen. Und passend dazu die Beispiele von Morning Star, Spotify und The Valve für die erste, Siemens oder GM für die zweite Herangehensweise.

 

Allerdings lassen sich beide Ansätze vereinen. Nestlé mit Nespresso, der „Guardian“ online oder die i3-Entwicklung bei BMW stehen hier Pate für aus der alten Organisation herausgelöste unternehmerische Subeinheiten, deren formale Struktur die der Restfirma in vielerlei Hinsicht spiegelt, die aber unabhängig an den CEO berichten und eigene Freiheitsgrade nutzen können.

 

Allein bei dem Transfer der Best Practices hapert es gewaltig. Große Konzerne mit gelebten Hierarchien tun sich schwer mit Freiheit für „Intrapreneurship“ und „Start-up Ecosysteme“ – so schön das auch alles klingt. Und Start-ups schaffen oft nicht den Absprung von der Teamkultur zur skalierbaren Organisation für Expansion.

 

Selbst wenn morgen alle bei Siemens Sneaker tragen würden und es nur noch Scrum Master statt Chefs gäbe, würde daraus nicht die Transformation des Dinosauriers, geschweige denn die Avantgarde-Unternehmung. Und der Gründer im Anzug versteht noch lange nicht, wie Konzernbürokratien ticken.

 

Konzernchefs wie Gründer müssen und sollen aber auch nicht nur stumpf wählen zwischen Hierarchie oder Polyarchie. Sie müssen genau überlegen, in welchen der drei Kerndomänen des Managens – Dirigieren, Disputresolution und Design – sie ihre Autorität selbst ausüben und in welchen sie in die Organisation delegieren wollen.

 

Dirigieren beinhaltet die Festlegung, wer was tun soll; Disputresolution die Frage, wie Konflikte zu lösen sind; und Design die Frage danach, wie Arbeitsteilung in der Organisation aussieht. Werden alle Rechte zentral wahrgenommen, wird Effizienz maximiert und Innovation minimiert. Werden alle Rechte dezentralisiert, ist es umgekehrt. Alle Mischformen sind hier denkbar und können maßgeschneidert entschieden werden.

 

So wird sich mancher Konzern schwertun, es von heute auf morgen seinen Mitarbeitern zu überlassen, wie Aufgabenstrukturen aussehen sollen. Selbstentscheidung für bestimmte Auf‧gaben hingegen mag das Management zulassen. Genauso wie die Konfliktlösung im Team.

 

Initiiert und begleitet werden muss dieser Prozess von der Führungsspitze. Je nach Delegationsgrad, den diese wählt, um die Annäherung von Effizienz und Innovation zu managen, ergeben sich für das Topmanagment-Team diametral unterschiedliche Anforderungen. Abflachen von Strukturen erfordert Befähigung sowie Empowerment zur Selbstorganisation. Beim Einführen von Hierarchien in Gründerkulturen muss Mitarbeitern die Angst vor negativer Bewertung und Kontrollverlust genommen werden.

 
Markus Reitzig ist Professor für strategisches Management an der Universität Wien. Thomas Sattelberger war Personalvorstand der Deutschen Telekom und ist Bundestagsabgeordneter der FDP. (Foto: Universität Wien; Imago)

Selten trifft man auf CEOs wie damals Jürgen Weber in der Sanierungs- und Privatisierungsphase der Lufthansa oder Anant Badatiya von der Stallion Group, die als Führungspersönlichkeiten jeden denkbaren Bilderbuchspagat instinktiv meistern; die in jeder Managementdomäne streng führen und genauso auch delegieren können.

 

Ein Grund dafür liegt darin, dass die Natur uns mit sogenannten Persönlichkeitseigenschaften ausstattet, an denen wir nichts Grundlegendes ändern können. Überoptimismus etwa scheint großteils angeboren, und lässt einen so veranlagten CEO einfacher risikoreiche Innovationsprojekte angehen als andere, mit gutem wie mit schlechtem Ausgang.

 

Aber auch das gelernte Verhalten spielt eine Rolle, und so ist es wesentlich, dass CEOs in unterschiedlichen Organisationen Erfahrungen gesammelt haben – kleinen und großen, agilen und starren, effizienten und disruptionsgeforderten, bevor sie Spagate im Transformationsprozess erstmalig voll verantworten.

 

Nach Managern mit solcher Erfahrungsvielfalt und passendem Persönlichkeitsmuster müssen Aufsichtsräte suchen. Nach Kandidaten, die denjenigen Spagat sicher schaffen, den das jeweilige Unternehmen braucht.

Geschrieben von Markus Reitzig, Thomas Sattelberger.

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Cilla Benkö, CEO of Swedish Radio: The Evolution of Leadership in a Post-Pandemic World

Radio is regarded by many as a trusted source for reliable news, especially during crisis situations. Cilla Benkö, Director General & CEO of Swedish Radio, Sweden’s biggest radio broadcaster says: 

“Radio [has a] very important task of covering the pandemic and informing the public – while also reducing the risks of infection spreading and keeping our co-workers healthy.”  

Not only is Benkö a recurring international speaker for topics such as public service media, she is also passionate about freedom of expression, digital development and leadership. For those reasons, Management Events is thrilled to share her perspective on change management, redefining managerial roles, tech adoption drivers and challenges, and female representation in leadership teams.

 

Overcoming Change Management Hurdles  

 

Organizations are going through major changes right now, and change management is often a challenge. Was it a challenge in your organization as well, and how did you address it? 

Well, the answer to that is both yes and no. As a media company, with the journalistic trade at the very core of our organization, our co-workers are naturally interested in changes and trends surrounding the world. A big challenge, however, has been bringing the company together and keeping over 2,000 people, working from places all over the country, updated and aware of which changes in the ever-changing world are going to affect us. But also, to get everyone involved in what we need to do collectively to meet these changes, in order to get as equipped as possible for the future.

 

Some of the changes include the introduction of remote work for certain employees and the modification of schedules to cover breaking news related to COVID-19. The technical simplicity of radio is an advantage that allows stations to broadcast regularly and is flexible enough to include dedicated programs and podcasts about the pandemic.  

 

 Redefinition of the Manager Role

 

Businesses across industries had to adapt a lot in the past year – it’s not only the change in processes and technologies, but also the mental stress. In your opinion, how has leadership changed during and post-pandemic? Has the role and even definition of a manager been redefined? 

I must say that I have been incredibly impressed with the managerial level at Swedish Radio during these very challenging times. All over the company we have seen proof of enormous flexibility and creativity, finding new and smart solutions to new and existing challenges in connection with the pandemic, but also with the digital work environment that has been made a permanent part of everyday life. For managers, this has also meant finding new ways of securing collaboration, social structures and mutual learning within working groups. 

 

Forward-thinking change managers must redefine the concept of change management for their organizations. Change management initiatives are more likely to be met with clear communication and employee participation from the start. This is supported by Shona Elliot, best-selling author and executive management & leadership consultant, who highlights the importance of leaders prioritizing their employees and building a people-centric culture. 

 

Key Drivers and Challenges with Tech Adoption

 

What key challenges do you usually see when it comes to technology adoption, from the change management perspective? And how can these challenges be solved? 

The editorial environment is fast-paced with limited room for practical obstacles – so time is of course a key challenge. It’s therefore important to ensure all technology is adjusted to suit the actual needs of the organization and that the implementation of new technology and ways of working always comes with support and is scheduled, communicated and planned properly. Another key challenge for Swedish Radio is, of course, budget limitations that always makes it a necessity to prioritize.  

 

Results from Management Events’ survey on COVID-19 impacts on businesses reveal that revisions of budget and business strategy are the top focus areas for organizations in ensuring the smooth continuity of their operations. In addition, 59% of business leaders in Europe are reworking their budget plans and predictions, followed by a revision of business strategies and goals.  

In terms of tech adoption challenges, surveyed CHROs in Management Events’ Executive Trend Survey named the following — lack of the right training and skills, integration with legacy systems, and a culture that does not embrace experimentation.  

 

In your opinion, what are the key drivers for technological innovation today? How does it reflect in your organization? 

It is most definitely the way of working with multifunctional teams, where many different competences work together to find a solution that best meets the needs of the organization.  Technology must never be developed just for the sake of technology itself. At Swedish Radio, we have made innovation and technical development a priority, and that has equipped us well to cope with the unexpected – like the coronavirus pandemic. 

 

The need for innovation and technical development has been accelerated by the pandemic, pushing leaders to adopt new approaches for workflow processes in the shortest timeframes. In today’s remote working conditions, businesses need to remain efficient and prioritize quality over quantity. 

 

Women in Leadership

 

You were recently listed as one of “The most Powerful Women in Business Sweden”. What advice can you give to aspiring female business executives on growing in leadership roles? 

Never forget to listen, and especially remember to have respect and listen to those not agreeing with you. For me, it is crucial to make sure that an organization is brave enough to have as many perspectives as possible in ongoing discussions. One must never be afraid of debate. On the contrary, it’s key to success. Also, always allow people to make mistakes and learn from them. There is nothing more toxic to creativity than a fearful work environment. 

 

Did you know that women represent only 19.3% of executives and 7.9% of CEOs in publicly listed companies across the European Union?   

Women in the workplace have been negatively impacted during the pandemic and are more likely to have been retrenched. With closures of schools and daycare centers, women who still had jobs struggled to juggle childcare responsibilities and managing households. It is no wonder as many as two million women considered leaving the workforce in 2020.  

Less women working mean less women in leadership positions, and the financial consequences of this could be significant. Research by McKinsey & Company stated that company profits and share performance can show a 50% increment with strong female representation at C-suite level. 

Fortunately, some countries are paving the way for women empowerment in the workplace. According to PwC’s Women in Work 2021 report, Iceland, Sweden and New Zealand are leading the pack when it comes to closing the gender pay gap and increasing the number of full-time female employees.  

The definition of key leadership roles will continue to evolve as workplaces become more digitalized. Forward-thinking leaders need to embrace and adopt new innovations, provide employees equal opportunities to grow, work on building a diverse and inclusive team and most importantly, be unafraid of change. 

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Greg Williams, Editor-in-Chief of WIRED UK: “Organizations Should Be Thinking About the Next Threat”

What is the biggest lesson your organization has learnt from the past year? 

If the answer is that businesses must be prepared for anything, you are not alone.   

Research by McKinsey & Company revealed that agile organizations respond faster to crises. Therefore, creating an agile business culture should be high on every C-level’s list of priorities.  

It is time for leaders to relearn and revamp business strategies, build flexible facets within teams and make full use of new technologies. This begs the question: Is your organization prepared to tackle unprecedented changes and tech-related challenges? 

We speak to Greg Williams, editor-in-chief of WIRED UK and thought leader on future-shaping ideas, trends and technologies; for his take on what organizations should look out for in 2021 and beyond.

 

New Technologies and Opportunities

 

Technology, both a blessing and a curse of the 21st century, perpetually churns out new developments that businesses are struggling to catch up with. Industries are technology-saturated, resulting in overwhelmed leadership teams and employees. 

Williams cuts through the noise and highlights several key trends that will impact companies in the next few years:  

“AI will continue to be embedded throughout the organizational value chain, offering new insights and helping enterprises make better decisions.“ 

By leveraging data and artificial intelligence (AI), companies can improve all stages of their CX journey. For example, Amazon used AI and predictive analytics, before the browsing prospects even made a purchase, to unify data from customers, understand their patterns, predict their next step and recommend products based on their interests. 

Williams also stressed “the decarbonization of economies as automotive becomes electrified, cities become smarter and investors divest from fossil fuels.” 

The World Business Council for Sustainable Development supports Williams’ sentiment, stating that sustained decarbonization is the most effective way to manage climate change. Group CFO of Storebrand, Lars Aasulv Løddesøl, recommends adopting sustainable efforts to ensure long-term financial returns and that it is ultimately “the right thing to do” for any organization.  

Williams states there will be “new forms of automation and we’ll see an opportunity for home technologies” as people spend money on their living environments and on local services.” Home applications with embedded AI and automation features promise both advanced technological appliances and security. Trending home technologies include video door alarms, remote-controlled locks and ultra-modern burglar alarms.  

In addition, 2020 saw “the end of education as we know it, with learning moving online.” However, Williams feels that the social aspects of learning are hard to replicate in a virtual environment. 

 

A Whole New Automated World

 

Williams predicts that “back-office technologies such as RPA and AI-centric customer service will continue to deliver value, as will cloud.” 

PwC estimates that 45% of work activities can be automated with the help of RPA, saving $2 trillion in global workforce costs. The automation of repetitive processes will free up valuable time for managers and employees involved in finance and accounting, HR administration and claims processing, among others.  

Chatbots, the face of AI-centric customer service, have eased the workload of human support teams across industries by addressing common requests and filtering genuine enquiries. This will create “a shift away from keyboards as new interfaces begin to have applications both for consumer products and for enterprise,” Williams commented. 

The relevance of cloud technology is undeniable. Microsoft Azure, Amazon Web Services and Google Cloud are three of the most popular cloud platforms in the market, and interviewed CIOs in our Executive Trend Survey are contemplating between the cloud computing services while some are even working with all three of the platforms. 

There is no choice but for organizations to accept and embrace “the gradual presence of automation in the physical world as well as the business operations functions we’re already seeing,” Williams says.  

 

Into the Unknown

 

Post-COVID, the immediate priority for decision makers should be ensuring their digital strategy facilitates effective scenario planning. 

So, what scenario planning strategies should businesses implement? It all boils down to looking ahead and being prepared. Williams strongly suggests all digital strategies should have an “in-built notion of constant uncertainty” moving forward.  

‘‘The cadence of regular audits of preparedness should now be increased in order to enable organizations to become more fluid and be able to deliver new products and always attune to client and customer needs,” Williams added.  

Even though the climate crisis may seem like a distant issue to many organizations, Williams states “their impacts will be felt throughout society unless urgent action is taken.” Fortunately, some progress has been made with heavy-emitting industries, including BP, Shell, Daimler, and Rio Tinto, taking on more green initiatives through the COVID-19 outbreak.  

Big players in finance and investment are also taking steps to combat climate change. BlackRock, asset manager giant, has pledged to penalize directors of companies that fail to manage environmental risks.  

However, Williams believes that ”we still need some significant technological breakthroughs in areas such as green steel and green concrete.” 

Here’s a staggering statistic: steel production makes up 7% to 10% of total carbon emissions — twice the amount from air travel. According to a recent study by McKinsey & Company, approximately 14 percent of steel companies’ potential value is at risk if their environmental impact remains unchanged. 

German steelmaker, Salzgitter, is already aware of that risk and will be increasing green steel production to a “five-figure” volume this year with increasing demand from the automotive industry and white goods sector.  

Williams says, “all organizations should be thinking about the next threat.” 

Organizations that proactively revise and improve business practices with this mindset stand a better chance of surviving unforeseen obstacles – be it a global pandemic, economic collapse or climate crisis. 

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Can CxOs Harness The Power of Clubhouse?

Clubhouse, a social media platform, is currently making waves around the world as the latest silicon valley success with everyone from Mark Zuckerberg to Oprah making their appearance on the app.

For c-level executives (CXOs), Clubhouse can be a powerful tool for business growth when used effectively. There’s potential for it to be a platform to learn about emerging technologies, fringe strategies, solutions, and even learn new skills.

In this article, we’ll go through some tips to effectively use the platform and ensure that you’re not missing out on the hottest social media app.

 

Clubhouse: A Quick Recap

 

If you’re well-versed in Clubhouse, then go ahead and skip this part. If you do not know anything about Clubhouse, here are some important points to be aware of:

  • It’s a voice-only social platform that lets users create rooms and start conversations.
  • Users can join rooms and participate in conversations.
  • Each room will have moderators to oversee conversations.
  • It’s an invite-only app, which means you need to be invited to join.
  • It’s only available in iOS but an android version is being developed.
 
Join US NOW: Be part of Management Events’ Clubhouse (@Managementev) and gain exclusive access to deep-dives from industry experts and key decision-makers.
 

How To Harness Clubhouse

 

Now that you have a basic understanding of Clubhouse, how or why should you use Clubhouse?

While it is still in its infancy, Clubhouse does offer tangible short-term and long-term business gains that other social media platforms do not. As a business or organization, it’d be wise to take advantage of what the app has to offer, especially now with people such as Elon Musk being part of it.

 

Expanding Your Business Network

 

At face value, Clubhouse might not guarantee success for your business goals, however, it can be a valuable tool to expand your network and open up opportunities for growth and potential partnerships.

Once you’ve secured an invitation, experiment with the platform and follow different clubs, join rooms and connect with people that could be cultivated into networking opportunities for your organization or a source for valuable insights and inspiration.

The app has seen high-profile figures joining and engaging consistently, making it a vibrant platform for decision-makers to network with peers, work with visionaries, and maybe even be inspired by like-minded leaders.

 

A Place For Knowledge Sharing

 

At its core, Clubhouse is about sharing. Be it sharing information, ideas, or insider knowledge, the app provides a great place for insights from industry peers that otherwise might not be easily accessible.

Of course, it doesn’t compare to tailored industry events or virtual networking sessions for businesses, it is still a hotbed for CXOs to share their findings, engage in discussion on industry trends, and gain unique perspectives from other c-levels.

Whether it is about marketing, AI, finance, or even business transformations, there are a wide variety of topics and rooms that you can explore and learn from to help you solve or strengthen your business.

 
Next-level Insights: Gain exclusives insights on industry trends from experts at Management Events’ Clubhouse (@Managementev) sessions.
 

Huge Pool of Talent and Recruitment

 

As you visit rooms and join in discussions relevant to your industry, you’ll come across people with the skills and experience that your business might need. Given the exponential growth of Clubhouse’s userbase, this makes it a valuable platform for talent resources and recruitment.

There have been many cases of recruiters utilizing the app by finding talents through networking in the chat rooms or just setting an impromptu interview on the spot. During Elon Musk’s infamous interview on Clubhouse, he used the opportunity to promote NeuraLink and went on to encourage engineers to apply to his company, highlighting the instantaneous interaction that you can have on the app.

Finding the right people can be as easy as joining a room and mentioning that you are looking for people to help with your business. Within minutes, you’ll be receiving messages from talents and the services that they offer.

 

What The Future Holds For Clubhouse

 

While Clubhouse is definitely the buzzword for many right now, its future as a pillar of business networking is still in question. There are tons of potential within the app, but also numerous issues that still need resolving.

Some of those issues include a better method to filter audiences, a better system to moderate, and most importantly, the security concerns over data and audio leaks.

Whether or not Clubhouse will become a super-aggregator remains to be seen but the potential is there. With the developers looking to improve the platform by adding creator tools and quality-of-life improvements, the app can be a powerful tool in the hands of C-level executives in the future.

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Pandora’s CIO Peter Cabello Holmberg: Building A Hub Of Agility And Digitalization

Pandora took the business world by storm this year as the renowned international jewelry retailer successfully drove digital transformation and innovation in the midst of COVID-19 and launched the much-talked-about Digital Hub.

To find out more about the Digital Hub and Pandora’s agile aspirations, Management Events interviewed Pandora’s CIO, Peter Cabello Holmberg, winner of CIO of the Year 2020, who shared the objectives of the ‘Hub’ and its importance in Pandora’s continued digital strategy.

 
(Photo: Mikael Rieck, from Computerworld)
 

THE DIGITAL HUB

 

The Digital Hub, also known as the Hub, opened its doors in Copenhagen in July 2020. But what exactly is the Digital Hub?

 

The Digital Hub is actually a place. It’s a physical location; a full floor in a building next to our global office, where we have room for some 200 headcounts. We initially called it ‘Global Office 2’, but as we wanted to create some hype around digital and our digital strategies, we decided on ‘Digital Hub’.

Also, we were running out of space in our global office, and we had pockets of digital talents – the IT, marketing, and e-commerce teams – sitting in different places globally. That wasn’t optimal so we wanted to consolidate our digital talents in Copenhagen.

We believe that having our digital talents in the same location would help our delivery speed, and our intention was to have a new layout of office space that could facilitate agile ways of working, where people can move around and sit in teams to exchange knowledge on a daily basis.

In the early phases, we discussed building it in New York or Amsterdam, but we decided to build it next to our global office in Copenhagen because there was a need for proximity with the rest of the senior executives there. We were super lucky that we could get the office space next to our global office.

 

How did the idea of the Hub come about?

 

We’ve been working with our thoughts and aspirations on digitizing across our value teams for a couple of years. And what we realized was that we had to orchestrate ourselves differently to deliver faster on our digital aspirations.

We’ve been relying on waterfall approaches, business cases, and other methods that were very slow for us to get things started and signed off, so we needed a different operating model and a different engine room.

It was that realization – for us to deliver on our digital aspirations, have more transactions on our online channels, and improve digital marketing, omnichannel, and in-store technology – that we felt the need to bring the technology, e-commerce, and marketing teams together and implement new, agile ways of working.

 

Projects like the Digital Hub are huge investments, and getting the stakeholders’ buy-in is always a challenge. How was the project presented for the executive buy-in?

 

I went to the CEO and the executive leadership teams a year and a half or 2 years ago and said that we needed to do an IT transformation. I said that I would save money for the company, build new career duties, and introduce agile working. And I got a sign-off on that.

The CEO bought into it because we – on top of the savings – also presented strong business cases for digitalization and data-driven consumer growth that were very attractive with significant incremental revenue.

 

AGILE WORKING AND CHANGE MANAGEMENT

 

After getting the sign off on introducing agile ways of working, how did you start its implementation?

 

We did a number of introduction sessions before we did anything else. We talked about what agile is, its meaning and principles, and the choice of methodology, and introduced the terminology. We also did a few proofs of concepts, small projects that we would normally put into an agile release train (ART), and applied agile ways of working, like scrum meetings.

Other than that, we had meticulous discussions about Spotify and SAFe, and supporting tools for agile ways of working. We initially made a decision to go with both models, which was a mess for us. Now we’re back to the principle of one model.

We made some decisions along the way that were just wrong. So when we went live, we went in knowing that we had to learn if the decisions and changes worked and asked everyone to give feedback so that we could adjust on areas that didn’t work.

 

Major organizational transformations can be difficult to execute smoothly. How did Pandora handle the change management?

 

This was a massive change management exercise, but we knew we had to shift our ways of working completely.

So we gave people a flavor of how this change would look. We started to talk about what an ART should be like and introduced new and different roles to both the business and organizations. We pieced it step by step, presenting increasingly more elements of agile working.

There was change management happening both bottom-up and top-down, but at some point, we came together and communicated to everyone involved that ‘This is how it’s going to look, and here are the members of the Arts’.

We communicated the incoming change to all parts of the organization with 50 to 70 lightning talks about agile working held for all the employees to participate. More than 1,200 people from the entire business signed up to learn about it.

Even when we went live with our first ART, we continued having lightning talks because more and more people wanted to know about it.”

We try to stay as open and transparent along the way so that everybody knows what was happening. It was a lot of communication on where we were, what was happening next, and what to expect.

 

HIRING AND TALENT MANAGEMENT

 

With all the transformation initiatives, what were the responses from the teams and employees?

 

The interesting thing is, as we implemented the agile ways of working, our churn rate of people in IT, marketing, and e-commerce leaving Pandora has gone down. Even though we did this massive transformation, the turnover rate has decreased.

From what I’ve seen and heard, people are actually quite excited to try agile working. They want to see how it works. Some have already tried it and are super happy with it. And those who have always worked in traditional waterfall approaches are keen to learn about agile ways of working because everyone’s talking about it.

 

With about 200 employees working on a collective digital strategy, how does the Hub ensure that decisions and responsibilities are delegated to the right people and teams?

 

We have a number of ARTs now, and the biggest and most mature one is our consumer ART.

Whatever the team does in this agile release train is tied to our business strategy, so there’s a link from the strategy to how we work with agile portfolio, lead portfolio management, and so on. So we can track from strategy to ARTs to APEX to features to use cases.

Since we have defined the ART with all the members and different roles, there’s full transparency on who’s responsible for what. Everyone knows what their role is in the whole process.

Furthermore, the tool that we use holds the overall description of the business strategy, and breaks down into the related ARTs and components, so that we’re constantly updated on the business timeline and deliveries. Hence, I would know exactly what’s going to be delivered and when. It’s pretty amazing.

 

It’s not news that Pandora has been actively hiring digital talents for the Hub. What talents are being seeked, and what hiring strategies are being used?

 

We’re hiring very different types of profiles into the Digital Hub from all over the world – Columbia, Argentina, the US, and Singapore. We want people who are creative, who have an opinion, who want to push things forward and make a difference. And because we also want to set them free with the business, we want them to be self-operating.

What we did with hiring was create hype around the Digital Hub. We had the CEO talk about the Hub when he was interviewed, and we sent out press releases and reached out to different media. We also talked to universities about what we were doing and trying to achieve and spread the word that we wanted to build a digital powerhouse in Pandora and be number 1 in our industry.

So we set the ambition level quite high, which is part of attracting talents while doing features and events and mobilizing all types of channels to spread the word.

 

What challenges did the Digital Hub encounter in terms of recruiting talents and managing the current workforce?

 

One of our bigger problems was that, when we got a ‘go’ for the Hub, it was the time when COVID-19 hit. So we had to hire these positions using Teams and Zoom since we couldn’t meet the candidates face-to-face.

We also had to go about the hiring processes in a different way because everybody was on lockdown globally, and we couldn’t fly them in and bring them to the Digital Hub. From Day One, they had to start from their home office. We sent PCs and laptops to them, and onboard them from their home and whichever country they were in.

 

Now that the Hub is completed, what initiatives is Pandora taking to ensure a functional communicative and collaborative culture?

 

The Hub initially was driven by the CDO, CIO, and our SVP for data analytics. Now that we have consolidated these functions under a CDTO then the Hub is anchored with the CDTO. We’re trying to create a community so that the Hub is seen as one team with one common purpose.

Now, the Digital Hub has its own dynamics, and there are social events, fireside chats, and town halls where people across different organizations can participate. We put these people together in one location, and what this has actually done is broken down the silos that we were experiencing previously.

We’ve been sitting on different floors, in different buildings, in different countries. Now that we have brought the teams together, they talk to each other every day – they literally sit next to each other – so it has broken down the silos between different functions. We’re much more aligned compared to before, and that is a huge improvement for us.

 

DATA AND DIGITALIZATION

 

In terms of technology and innovation, what challenges did you face with the Hub?

 

We didn’t have many challenges with our technologies and choice of technologies when we started the transformation.

We already had a roadmap on what to do with data. We had our online platform, our salesforce, e-commerce, and cloud. Our biggest challenges are with integrations, master data, and a scattered point of sales landscape. But overall, we are in fairly good shape.

 

What stage is the digital transformation of Pandora at the current moment? What other processes are underway to boost the brand’s digital experience?

 

What we have now is a pretty solid digital strategy that has been shaping up over the last 8 months or so.

We’re going all in on our user data for tips on marketing and personalization. We’re also considering communities for people who are interested in our type of jewelry, and planning to introduce a global loyalty program that will hopefully further drive brand loyalty.

The consumer ART is working with data, and working with the marketing team on digital marketing and personalization. In regards to data-driven consumer growth, we also set the teams free to use data to drive sales. By combining the different data sources that we have, such as our transactions and customer browsing data, the ART teams are free to make decisions on their own to allow faster decision-making.

 

What are the biggest differences between the company’s past and present data utilization?

 

It’s two different worlds before the Hub and after the Hub is live. The incremental revenue that is delivered from our data-driven consumer efforts is just outstanding.

We’ve built the integration between different sources in our stack, applied new technologies, and hired Ph.D.-titled profiles to work with data so that we can learn more about our consumers.

We didn’t have that data focus a year and a half ago. I think we had one person in Pandora working with data, but now we have 60+ people working only on advanced data analytics and the use of data.

 

SUCCESS AND THE FUTURE

 

What do you consider to be the key achievements of the Hub?

 
(Image: Peter Elmholt, from ZDNet)

What’s interesting is that the agile way of working that we implemented has really proven its value when the pandemic hit.

Our stock prices have gone up some 100% during 2020 when COVID-19 hit, and that’s quite amazing. It’s actually all down to our technology readiness and the shifts from physical stores to taking advantage of our online channels and digital initiatives.

We were able to step back and look at our priorities and completely change our focus, and now the rest of the business – HR, finance, and other parts of our commercial organization – want to embrace agile working because they see its value. This is just the start and we want to do even more.

Additionally, we see that we can move much faster now. Because the teams are dedicated to the agile release trains (ARTs), they’ve become very efficient and knowledgeable about their role, purpose, and responsibilities. So we’re able to come up with solutions to business strategies at a faster rate.

 

There are always expected ROIs for major projects. What is the anticipated ROI in 2021 due to the Hub?

 

When we first started, my focus, and marketing’s focus, was on revenue-generating and return on investment. It was clear when we went to our CEO that what we proposed was very attractive and that data-driven consumer growth, meaning advanced data analytics alone, would pay for our Digital Hub. And we still have many other initiatives that we’re driving.

In some cases, in terms of ROI, we’re talking about a factor of 10 of the investment. Also, our stock prices have gone up significantly because we took advantage of our online channels and digital initiatives. I think that alone shows the impact of getting digital right.

 

What are the upcoming plans and strategies for the Digital Hub and Pandora?

 

We are in the middle of finalizing our digital strategy for the next 3 to 5 years. We never had a digital strategy before, but now we have it, and it sets the direction for our technology investments across our value chain – where we want to invest our bodies and resources.

Also, we’re focusing on how we can take agile working and our technology operating model to the next level. Yes, we started out with Agile but we’ve only been live for a year or so. Now, how do we bring this further? What do we need to invest in? What kind of profiles, like what agile coaches or release train engineers, do we need to bring on board to further mature our agile ways of working?

 

What commercial goals does Pandora seek to achieve in 2021? What role does the Hub play in achieving these goals?

 

Our key focus right now, and into the next 3 to 5 years, will be on revenue-generating initiatives. We want to drive even more revenue through our online channels.

Aside from that, we’re also focusing on creating an even more seamless customer journey across our different channels. We want to engage with our consumers in a more meaningful way – be more precise in what and when we communicate so that we become more relevant.

Of course, we do all of these to drive revenue, and the Digital Hub is instrumental for us to proceed with the plans.