Traditional Bureaucratic Structures Will Not Fare Well in the Era of Digital Transformation; Future Ready Enterprises Are Pushing Power to the Edge

By Lane Cooper, Editorial Director, BizTechReports

While the initial wave of digital transformation initiatives have largely focused on building new technology platforms across a near infinite variety of cloud environments, the true benefits of any shift will only occur with an equally dramatic change in how organizations are structured, says Bruno Guicardi, President and Co-Founder of CI&T, in a thought leadership interview.

BizTechReports caught up with Guicardi on the heels of the Future Ready Digital Business Summit held on February 19th in Oakland, California. The event featured a keynote presentation from noted author Gary Hamel, who delivered a research-based critique of conventional organizational structures and participated in a panel and workshop discussion with Guicardi. 

“It is becoming increasingly clear that existing leadership paradigms will not work effectively in the era of digital transformation,” says Guicardi.

Full Interview with Bruno Guicardi

As companies of all sizes explore ways to bring ideas to market more quickly, industry leaders are concluding that highly bureaucratic, hierarchical and process-intensive organizations are standing in the way of systematic changes necessary for capturing the full value of transformation.

“In a recent survey conducted by CI&T, we found that it takes large organizations as many as 26 months to bring an idea to market from the time point at which it is initially formed. These long lead times happen because there are so many silos and layers of management that are involved in evaluating and signing off on new ideas,” explains Guicardi.

The process is not just time consuming but also expensive and ultimately inefficient. By the time new products, services or other categories of innovations are introduced, many of the issues that made the ideas highly relevant shift...or even evolve out of existence.

“As a result, new ideas are outdated by the time they make it to market. What is needed is an environment that accelerates the pace of new innovations to market at a lower cost,” he says. 

Most organizations would also benefit from putting a higher quantity of ideas through a vetting process that is exposed to market dynamics more often throughout their development.

“Today, most organizations tend to focus on a couple -- or at most a handful -- of ideas that receive high-profile commitments from senior leaders in the structure. When these ideas fail, it ends up costing the enterprise a lot,” says Guicardi.

Future-ready organizations that have successfully parted with traditional hierarchies tend to turn this model of innovation on its head. Instead of having a few ideas that are fully funded, this new breed of organization creates environments in which far more ideas -- hundreds even -- are simultaneously pursued. 

“Moreover, they let the market itself -- not some internal review process -- determine whether or not the idea is on a path to success,” he says.

Intrapreneurial VCs

The organizations most likely to dominate their markets as we move deeper into the decade will be those who enable innovation in the same way that the venture capital community evaluates investment opportunities.

“By pushing power to the edge and creating a culture that empowers teams to make bets on new ideas, companies can be exposed to a constant stream of potential innovations that will advance their organization,” says Guicardi.  

This approach recognizes that ideas have a high mortality rate; most fail to pay off. 

“That is no problem, you simply stop funding them and they go away naturally. What is exciting is what happens with successful ideas. As they prove themselves in the market, you can continue to nurture them. You can put more resources behind ideas that are already demonstrating success in the market,” he says.

It is very difficult, however, for this dynamic to emerge in rigid hierarchical structures. 

“For this reason, it is important for executive leaders, mid-level managers -- even rank-and-file employees -- to examine current structures and explore how culture, technology and processes can be better harnessed to support a future-ready organization,” he concludes.