Thyago Ohana

You are a senior business leader. Your company's strategic growth plans include the building of a new plant and you are entrusted with the leadership of this construction project.

Time passes, construction has started, and the first floor of your five-story building is ready for inspection. Proudly wearing your hard hat, you visit the site and find out that 95% of the plans were met. Only very few of the foundations are faulty, but you don't mind it! You sign it off and the erection of the second floor starts.

The second floor is ready. 75% fine this time. You sign it off again. And well, I think you know where this is going. Later on, by the time your fourth floor starts to take shape, the disregarded gaps in the foundations and the previous floors suddenly impact the whole structure. Further construction works are subject to embargos and the whole project slows down, getting delayed as more and more time is needed to fix the existing errors.

This plot does not sound like a reasonable scenario YOU as an experienced leader would find yourself into. After all, you would never let your building's second floor start before you were 100% sure about the foundations of the first – and so on and so forth.

What if this project building was your company's digital transformation program? Would the success rate of 95% or 75% "per floor" be enough to carry on?

Knowledge-centric Programs build Knowledge Gaps

Building knowledge, skills and capabilities is somewhat like the process of building a structure with pillars, walls and a roof. You start by laying the foundations and slowly, on top the basics, you develop more complex concepts that are dependent on the previously acquired learning.

Much like traditional educational systems, corporate digital up-skilling programs [the school] often train their target group [the students] through initiatives mostly focused on the assessed knowledge deficit [the syllabus]. After completing the trainings, workshops and courses offered [the classes], employees may or may not be assessed for the knowledge acquired in form of quizzes or actual projects [the exams].

It needs no scientific basis to state that at the end of this journey, different people will have reached distinct levels of acquired know-how. And like in most schools, both learners with a 95% and a 75% level of acquired knowledge will progress to the next stage. This is a theme for a separate blog post, by the way. 

The tricky part about these systems when in the context of a strategic digital growth agenda is that as these programs continue, knowledge gaps will remain persistent in the organization, increasing progressively the farther away they are from the foundations.

To accelerate Digital Growth, look at both sides of this Formula

To bring about transformation, digital up-skilling through knowledge is imperative – “Don’t take me wrong! That much is inarguable.” Knowledge-centric programs ONLY are a problem, though! Without an eye on Engagement, the learning [building] progresses with disregard for the accumulated knowledge gaps. Later on, this leads to a negative impact on the overall organizational digital literacy.

This is why digital up-skilling programs should also assess behavior-deficits and cater strategies aimed at helping people not just know better, but also do better.

To help us visualize this notion and taking into account that our specific scenario refers to driving growth by empowering people through knowledge, I came up with a theoretical Digital Growth Formula that evaluates change and digital transformation. The formula is as follows: Digital Growth is a direct product of Digital Knowledge times Engagement, where Knowledge equals Learning plus Experience and Engagement  equals Mindset to the power of Motivation. That is:

Digital Growth = Digital Knowledge × Engagement

whereby

Digital Knowledge = Learning + Experience

and

Engagement = Mindset^Motivation

therefore:

Digital Growth = (Learning + Experience) × Mindset ^Motivation

So here's the key! Most digital transformation strategies will legitimately focus on the left side of the formula, Knowledge. But like said before, the progressive gaps in Learning will eventually slow these marks down. Moreover, Experience is highly time-bound. Hence, the way to accelerate growth now is to focus on the other side of the formula: Engagement  – in other words – on Mindset and Motivation.

Looking at Mindset numerically helps understand its impact on Growth

To talk about mindset without mentioning the concept of the growth mindset would be an oversight. This theory has been gaining momentum in recent years across organizations of all sizes. In some corporate circles, the growth mindset has even become a jargon everybody loves. “And let's be honest, the term is the kind of vocabulary that resonates very well when eloquently used in strategic plans and presentations.”

Coined by the American psychologist Carol Dweck in her 2006 best-seller "Mindset: The New Psychology of Success", the growth mindset and its opposite, the fixed mindset, both refer to perceptions people have about themselves. The foundation of her theory is that people with a fixed mindset believe their intelligence is static and that their knowledge, skills and talents are innate traits that do not change. Knowledge and achievement gaps for these people are better hidden. People with a growth mindset, on the other hand, understand that their intelligence can be improved over time through continuous hard work and perseverance. For them, the gaps are goals to be closed.

Now back to the proposed formula and once again to help us visualize the theory in the corporate digital transformation framework, we see that driving Digital Growth is intrinsically connected to Mindset. A fixed mindset person would see its Mindset levels fluctuate between 0 and 1, thus keeping Digital Growth at a bare maximum that equals his/her level of Digital Knowledge. And we saw already that knowledge gaps tend to remain persistent and increase progressively over time.

A person with a growth mindset, instead, believes that his/her abilities can be developed and that their knowledge gaps can be closed through efforts and dedication. With the variable Mindset > 1, this is where the compensation starts, driving Digital Growth upward.

A Digital Growth Ethos driven by Motivation is akin to a Company’s very own second Soul

Let’s wander off for a second. Do you think people smoke because they just don’t know smoking kills? – “Of course not!” That is a classic example that we humans often behave irrationally, no matter how much knowledge we have about a certain thing. The truth is: we don’t always do what’s best for us in the long run because the benefit [living longer] is too abstract or far-off in the future. But we often do what’s best for us now [enjoy that cigarette break]. More often than not, the underlying force driving our decisions such as smoking is called motivation.

Once again reflecting back on the proposed formula for the sake of visualizing the theory, we see that the variable Motivation is by far the most powerful one in driving growth. Calculated anywhere from 0 ad ∞, it is eventually motivation that will tell successful digital transformation programs apart from those that fail. It is not technology and it is not how fancy or all-encompassing the syllabus of the digital growth program is. It is people.

Applying this concept to the far-reaching implications of motivation for corporate digital up-skilling programs, we see once again how irrelevant knowledge-centricity is when driving Digital Growth. What is the point of knowing all there is to learn in a company’s digital ecosystem if there is nobody to drive value with it? It is the people behind these many tools, platforms, techniques or protocols that are going to keep on driving these when the trainings, workshops and courses are over. It’s like a social cue saying “Quit smoking” every time it’s time for a cigarette break. 😉

The Motivation variable and its impact on self-development for growth must be taken seriously. At the strategic top level, leaders must understand that it is the organization’s responsibility to create safe spaces and give employees the opportunity to develop a growth mindset – to believe they can and strive for growth. For the middle and top-line management, it means establishing a growth ethos, where effort, resilience and continuous improvement is appraised and where people can and want to develop. Both must understand that motivation is not just an item to be checked off the annual employee appraisal meeting nor an extra line in the next paycheck, but an effort that requires investment.

And at last, this investment does not mean outsourcing the role of change agents to externals. Unlocking the potential of internal talents is a company’s best shot at building its growth ethos. And if you wonder what I mean with it. Think of it like an organization’s second soul. When the “old normal” dies – and eventually it will – the digital growth ethos will live further.