How complexity is forcing us to rethink transformation

In this episode of the Innovation Realized podcast, Errol Gardner, EY Global Vice Chair of Consulting, discusses the importance of embracing technology and highlights role of leaders in driving transformation.

Key takeaways:

Change requires emotional commitment – everyone needs to align on the need, and feel passionate about doing so
Create an environment of psychological safety where people feel comfortable to call out problems – before it’s too late
Hone your sensory skills – be alert to necessary interventions “turning points” to keep transformations on track
Great team captains recognize diversity of thought, that people are individuals, tailoring their approach to get each person on side
When adopting new technologies like AI, be pragmatic – is it best to be a leader or fast follower?
Focus on the long game versus short-term disruption

For your convenience, full text transcript of this podcast is also available.

Narrator

Hello and welcome to the EY Innovation Realized podcast series by Elevation Barn.
Our world is characterized by more forceful changes that appear quicker, trigger more interconnected and widespread impacts, and often strike all at once. Some call this the poly crisis or perma crisis. Whatever you choose to call it, the bottom line is a business climate that has become far more complex. This environment requires leaders to rethink core assumptions, challenge establish assumptions, and rethink best practices that no longer work.
This Elevate series will bring you inside the 2024 EY Innovation Realized Global Summit to hear the new ways of thinking our complex world requires. Each episode is a provocative one-on-one conversation between a leader exploring these vital topics and impact leader, Will Travis, founder and CEO of Elevation Barn.
Elevation Barn is an international community of world leaders and experts focused on unlocking a purpose-driven legacy for sustainable personal and business growth. To learn more, visit elevationbarn.com.
And now to your host, Will Travis.

Travis

Errol Gardner is the EY Global Vice Chair of Consulting. Errol leads EY global consulting with over 130,000 professionals worldwide. He advises clients on transforming businesses enabled by technology and data with a human-centered approach.
Errol joined EY as a partner in 2009 and has several leadership positions, including the EY Global Leader for Technology Consulting. He has served clients in oil and gas, power and utilities, and has focused on banking and insurance in recent years.
Errol is passionate about diversity, equity, and inclusion and co-chairs EY’s Global Social Equity Task Force (GSET). He is a member of the Executive Leadership Council, an organization committed to increasing the numbers of C-suite black executives on corporate boards.
On a personal note, he's an avid Manchester United fan and regularly enjoys watching his team at home.
Errol, welcome.

Gardner

Thank you very much for having me.

Travis

I'm very delighted, especially having a fellow Manchester supporter coming from that place in my life. How often do you go back?
I'm glad to hear you're a Manchester United.

Travis

I am now. How often you go back there?

Gardner

Well, I'm a season ticket holder for United now. Obviously, with my role, it's quite difficult to, on the one hand, travel the world, and then, when I go home and with my wife and two daughters, say at the weekend, oh, by the way, I'm off to Manchester. So, I probably go less than I would like to, but I probably go and see them maybe 10-12 times a season.

Travis

Oh, amazing. Good. It's good to have that balance of what's in the heart as well as in the organization.

Gardner

But I watch and follow them all the time. So, on TV, they get all the worst of my mood swings when I'm good, and when we're winning, and increasingly at the moment, in the last few years, when we're not, it's a bit of a problem.

Travis

Well, thank you for letting me miss home a little bit on that one. Well, let's go into these questions. I've got some great questions for you. I'm looking for your perspective, the wisdom that you've had within the group, the diversity of thought, and the representation of the business is critical for the angle on these. Organizations are operating under increasingly complex internal environments, as we all know, disruptions that are more frequent, more impactful, and more interconnected. How does this change the characteristics an organization needs to thrive?

Gardner

Well, that's a really broad question. And I think, you know, I could answer that a number of different ways. I think what I'd start with is in the era that we're in, I think a lot of organizations, if you think about it post-pandemic, and having been through as big an impact has that had on any organization, literally, in any part of the world, I think now recovering from that, the impact of that has had on their workforce in the workforce dynamics, are people in the office or not, are people back on the production line or not, what does that look like? But then dealing with the ever-increasing tide of technology change and how they need to embrace that, dealing with some of the geopolitical tensions and issues that we have at the moment. I mean, you know, part of the implication of that is a high inflation environment. So, we've seen in terms of cost of living and what that means in terms of the ability of organizations to retain their workforce in the same way, to then thinking about things like sustainability and people or organizations having to embrace how they become more eco-friendly. And if they're an energy producer, how they switch to new ways of developing their products or in their consumer…, how they figure out how they use energy in a much better way going forward. So, all of these things kind of collide in terms of what organizations need to do.
And then, ultimately, it's down to people within those organizations to make that change happen. And human beings by nature don't like change. They're quite happy to talk about change as it relates to other people changing, but when it comes to them changing, it’s a different story. So, I think the biggest thing that organizations have to do with all of these topics, which are very extraneous in nature, and complex and diverse, is that, ultimately, it's the people that make all of these things happen.
And, you know, I think we talk a lot about the right brain and left brain way of looking at them, if you like, there's the IQ bit that, do I understand why I need to do something. But fundamentally, it comes down to a bunch of emotions with people, and whether they want to do something so the nature of that change, being able to thrive depends a lot on leaders, workers, management, executives being aligned on the need to change, wanting to change, and feeling passionate about doing so.

Travis

Have you ever noticed any key characteristic changes with how workforces are segregated, or decisions are made, or how people are interacting together?

Gardner

Well, I think this is an ever-changing situation, as I say, from a post pandemic perspective, now, we've got a generation of what everybody knows as Gen Z coming into the workplace, who know no difference other than an environment of working remotely so they've either studied remotely and or they came into the workforce working remotely. And so, they want flexibility. And so, when people say, now you will learn and your career will get better by being in the office and learning from your elders, if you like, and those that are more experienced than you, they say, but we don't want the commute for an hour or 90 minutes a day, we like the flexibility, we like being able to work at 9pm in the evening, and not do a traditional nine to five and sit down in a commuter network for periods of time. So that's one end of the spectrum.
And then you've got a number of people that checked out of the work environment at particular age that we're getting to a point, right, in almost at the other end of the age spectrum. And how do we get those people back? How do we kind of get them to reengage within the work environment? So, this kind of multi-generational workforce, which was always had, of course, but they've got very different experiences and expectations. Because, in addition to the pandemic aspect, both the Gen Zs and millennials are primarily digital first natives and individuals who will always embrace technology very quickly. And they're being managed by people who are not that, and who, for the most part, do not embrace technology so easily and will look for other ways and means to do things. So probably levels of frustration that you get within on both sides, in terms of that equation, but that's certainly a feature of what I see within organizations.

Travis

How do you find that for leaders, what kind of guidance can you offer, or suggest to help cope with transformation? Because many people at the rock face are busy just trying to get the business to survive, especially with the disruptive markets? And they were saying this morning, you know, 95% of leaders know they have to change how they're looking at things. They need to innovate to look at this in a new way, or they're going to struggle. What advice would you give leaders to re-approach this transformation agenda?

Gardner

Well, I think that the first piece of advice to recognize, and we talk a lot about this, is transformation was historically seen as something you did, very rarely. Partly because it's quite a big undertaking, then, you know, in general terms, you'd commit to something, the funding that's required, the dislocation that drives in your business means you do it and then you kind of close it down. And then it may take a while before you do it again. The reality is, now that is business as usual. So, you've got to constantly be thinking about the degree of change that you're onboarding and taking as an organization because it's necessary for all the reasons that we've talked about with some of the disruption that's out there and response that you need to put in place. And if, therefore, it's business as usual, it requires a new muscle in terms of how both you as a leader, but then also, how your teams operate, to think that there is not the run of the mill, BAU [Business As Usual] type of work that people have historically reverted to, to say, well, this is my traditional job. Transformation, by its definition means that you're doing something different. You're doing something that's challenging that BAU mindset. And so, you've got to, I think, change the perception of the workers within your organization. And again, the leaders and all of those, to think about how do they think about work differently as a consequence. And I think that requires a number of different skills then that people need to take on board.
And one of the things, I don't think now's a good time to talk about it. So, we've done quite a lot of research with Säid Business School at Oxford University, in why do transformations still, on a regular basis, fail. And what are some of the conditions as to why that happens? And back to the advice then to leaders, we did some research in 2021, that came up with six pieces of advice and feedback. But ultimately, to summarize that it was very much that leaders need to focus actually on the types of characteristics of what happens that make these things fail or not succeed, are based around human emotion, and the need to tap into and understand the interventions that you as a leader can make, to make people feel more empowered, better about making these things happen and the change occurring. And we talk a lot about psychological safety, providing an environment that people feel comfortable to call out when there's a problem, to not always be saying everything's fine. And to allow an organization to be open and honest about and let their workers within their organization say, we might have a problem with this, and I've got some ideas on how we might want to fix it, but I want to make sure we acknowledge that we've got a problem, and how can we do that?
A lot of organizations culturally prefer people to come up with, you know, better rose-tinted spectacle views of how things are going, and bury any issues that they have. And generally, what that means is that those issues just become bigger problems, and fester. And by the time that they've been ignored for a period of time, they become too big to actually address them, which is why you get to a point of failure.

Travis

Do you think because of the increase of working from home, is increasing the importance of attention to these factors to ensure that the systems can work for those that may not be under the microscope inside an organization? And how can leaders balance that, that they can handle this often segregated workforce that the united front doesn't help itself?

Gardner

Well, I think that we've probably had two dynamics that work a little bit against each other. So, I think one aspect of people working remotely and the impact of that has been that many organizations have embraced digital and video technology to communicate and to connect with people. So, what that's allowed leaders to do, I think, is actually connect to their workforce more materially, and more frequently, than they probably would in the physical world, if you like they have to physically turn up somewhere to meet with people and have conversations with them. So, it gives them an opportunity to see and be with them and sense where they are on their journey more often. But the flip side of that, of course, is as you will know, in a world of digital technology, and you and I are sitting down across the table from each other, you don't have that thing called “body language” that you can read and get a sense of how is somebody really feeling and or responding to what I'm saying. And, of course, we all read so much more into how somebody is, and what they state their mind is, based on those things. And of course, you don't get that across a two-dimensional video screen. So, I think that causes a challenge to say, am I seeing how that person is really feeling based on what I see on whatever kind of call that I've had and discussion that I've had, either with an individual or with a group of people.

Travis

Yeah, I mean, you've been well heard as being somebody saying that the importance of putting people in the heart of transformation very much starts with the individuals. This is a disruptive environment, and diversity of thought seems to be now being celebrated more, and perspective. Are you saying that there's more respect and more camaraderie that's happening within the workforce because people, to your point, are sitting opposite each other, when that happens it's more appreciated, or are you finding people are becoming more distant?

Gardner

I think it depends on the situation, depends on the organization, depends on the industry, depends on the culture of various organizations, because you've got people that work in office environments, you've got people who work in factories, you've got people working in service industries. So, there's a number of different workplace dynamics, I think, that you see in place. But if teaming is an important aspect of what people do, and teaming by that meaning you have to collaborate with others be in person or remotely, then, you know, having the right conditions for that to be successful are important. And I would always say, maybe this shows my age, that [it is] much easier to do when you've done that physically, at least in part, maybe at the beginning part of what you do, then you can move it to a remote relationship. But if your relationship is always remote and virtual, I think it becomes much harder then to collaborate and team in the effective way that you need to.
But I think fundamentally, you know, the acknowledgement that leaders need to make of these nuances and these aspects, features, characteristics of impact to IQ [Intelligence Quotient] and EQ [Emotional Quotient], that you get a sense, not that you're just giving people tasks and activities, and they're executing them, but how are they going about doing that? How good are they feeling about it? Do they have an issue with it? Do they agree with it? And all of these things are an important part of that human condition that generally will help to contribute to something happening faster, more effectively, more successfully, versus the opposite.

Gardner

So how do leaders adapt their behavior and mindsets? What advice could you give them to help them understand how to do this? Because it's okay saying it, but many leaders have been taught on this hero's journey. And this kindred quest is now becoming more important. What guidance could you give them of how to do that? Any sort of, this is a simple approach and this is the way that we look at it?

Gardner

Well, I think we mentioned earlier about some of the research that we've done. Just coincidentally, actually, this week, we published the second phase of that research, which very much goes into giving leaders some very specific advice about different points, that they can intervene, that will make a difference. We call them turning points effectively. So, in any scenario of what you're driving as an organization, you can very easily plot, based on some of the human dynamics of what's happening, and how people are bought into a change or transformation, whatever it may be, as to whether it's likely to go south, or whether it's likely to soar and people are going to support and achieve the outcome. And so, you know, part of the guidance to those leaders is getting better sensory skills about spotting where those moments are happening, when those turning points are happening. So, I think getting a better way of sensing that is really important. Now, you would say then, well, how does somebody do that if they don't natively have those skills? And I think this is where, again, you can actually for those that maybe are not high on EQ, you can still intellectualize this and actually say, well, this is a process and this is the way to help enable to make that happen.
So, surround yourself with people who can sense it, and then go into the rational mode of therefore what intervention do you need to make in order to make a difference. And so I think it's back to, you talked earlier about having diversity of thought and people, , if you're the type of leader who isn't that way inclined and doesn't have large elements of empathy or ability to reach out and understand how people may be feeling, then you need to have people within your team that can do that for you.
We talk a lot about influencers in their broadest sense, you know, that with the kind of generations that we have going up through social media now, but within organizational construct as well, there are also influencers who, not from a hierarchy or organizational structure perspective, but who influence the rhythms of the organization and the way people feel about things. So, understanding who some of those individuals are, getting them onside, getting the feedback from them directly as to what could we do differently that's going to make people feel better about this change, and more bought in and aligned to making this happen. I think that becomes really important in terms of driving the right interventions that are going to make this thing successful.
So, it's having those sensory skills to spot that there might be a problem in advance, and therefore intervening because what most organizations have is a bunch of KPIs, dashboards, metrics, that look at effectively recording problems when they're a problem. What I've just described is that sensing aspect, [which] is you would know about that before it's become a problem with those KPIs. So, then you can intervene to stop it becoming a problem. That's, I think, what leaders need to embrace, to get to the pathway of success.

Travis

We started touching on football. And being an avid fan, and focusing on observing human nature with football, what have you learned from the pitch that influences your philosophy on team, and how great teams within organizations that have players from all over the world, what have you learned from that that's helped influence your understandings?

Gardner

It's a great question, and very much applicable to the team I support, but because they've obviously had periods of great success as well, [and] now, not such great success. What I would say is team is, by definition, about a group of individuals. And they need to have an objective that unites them. And so that's very important in terms of what a football team does, and it's very important in terms of, organizationally, what happens within companies, governments, you know, etc. However, so it's a team of individuals with an objective, but the individuals within that team also are people who have their own point of view, who have their own ways of working, that you have to recognize that, as much as they'll align to the team objective, part of the ways and means of getting them to do that is acknowledging them as a human being in their own right, and making sure that you tailor, you know if you're the captain of the team, or the manager of the team, you tailor your approach to them that gets them onside, [so] that makes them feel motivated and committed to the overall team goal. So, I think it's those two dimensions. And, ultimately, it's having the discipline to see that the team ethos and the team ethic matters a huge amount and that everybody is committed to doing it for each other, and the success that comes from that. Because, fundamentally, there is no I in team, there is no success for an individual in a team sport. You've got to see the benefit of [how] the team benefits, ultimately the individual and then making sure that's clear to all of those folks, but adjusting the way that you operate, as I say, so that each individual feels that they're heard, that they're connecting with that captain, that manager, that coach, whoever it may be.

Travis

It's interesting. I love the parallel, you know, like, many businesses have been very successful. Many businesses go through these times of troughs like Manchester United. We're here for EY Innovation Realized, for this Rethink Agenda, what guidance would you give Man United to Rethink? And also the fans, you know, like, especially in organizations, it’s also how the consumers rethink?

Gardner

Well, I mean, you've lived in Manchester, and I know you're an avid Manchester United fan, or at least [a] recently converted one. But I think in any sporting scenario, as a fan, you've got to accept that there'll be times that you won't win, there'll be times when you're not going to be so successful. And I think you've got to accept that you're a fan for life. That, in many ways, makes it therefore different to a company-type scenario that, as an employee, if it doesn't work for you for a period of time, generally they'll check out and move somewhere else. As a football fan, you don't have that.
So, I think you need to acknowledge that, in many ways, the highs that you get when you do win, are actually a function of the fact that they don't happen all the time. And if they did happen all the time, and you see that now, arguably, you're from Manchester, so you've no doubt see that the blue side of the city who are winning a lot at the moment obviously have done that over the last 10-12 years, the excitement you get from each incremental individual win that gets above the ones that you've previously had, is not what it was. So, if you take the joy of [winning], and there's no more pain than the blue side of Manchester has suffered historically of going down, maybe ended in the twelfth tier of English football in the end, but when they won their first title. If you think about the joy that they had, at that point, versus where they get to now even though [the] Champions League success that they recently had, I don't think that would equate to that kind of joy. So, I think as a fan, you've got to always think that moment, when you come out of a trough, you come out of a difficult period, you'll find another moment that's a high, and that will be one of the best experiences you've ever had.

Travis

And it's a great, great lesson for leadership, you know, aligning expectancy, aligning what is achievement, and also the importance of the long game versus the short-term disruptions, Talking of which, you know, we've been talking very much about the human element, which is very close to your heart, but the transformation that's going through with emerging technology, where AI is bringing so much disruption, positive and negative, What do you think are the common pitfalls for tech adoption? And how can leaders overcome those?

Gardner

I think one of the challenges, and you've positioned this disruption and AI, I mean, this is obviously the biggest thing that's out there right now.
I'm nearly 35 years in the working environment of organizations adopting and adapting new technology over that period of time, and, in general terms, it's the hype cycle around technology, and the pace at which it's adopted and taken into especially corporate organizations, is never quite as fast as people would have you believe. So, it's always one of those things that it's overestimated in its impact at the outset, but its longer-term impact is probably underestimated in terms of what that would look like.
So, I think what you’re going to see is, for instance, in 10 years’ time, there'll be so much change as it relates to where AI is taking you, be it generative AI or AI more broadly. But in the next, probably 6-12 months, or maybe 18 months, there'll be, oh AI didn't really mean anything. It came, it was a big fad in 2023, and now it's fallen off a cliff, it's no longer important’. We saw that with the internet and the move to that. We saw it with ecommerce as you know, everybody said, well, that's not taken off. Nobody's going to buy anything in that way, shape, or form. We've seen it with Cloud, we've seen it with other technology disruptions that have come along, and I think we'll see it with AI as well. So, I think with that in mind, if you're a business leader, it's always about being pragmatic, based on which industry, what you do, how you could see the benefits of technology like that, to say, do you want to be a leader in that, do you want to drive that change because you can see the real benefits as to what that will bring to your business over and above others. Or do you actually want to be a fast follower, do you want to see others make mistakes [and let] others be the pathfinders, if you like, on finding the best way to use that technology. And then there's nothing wrong with copying success.

Travis

Absolutely. Well, it seems like there's never been a more important time as leaders can't get away with the backseat driving, they have to be in the front, and it seems to be no better time to have partners like EY alongside, so you have that diversity of thought and perspectives of what's happening on the long game.
So, thank you for sharing your insights today, Errol, really, really delightful. And good luck in the next game. I hope Manchester United manages to turn the corner.

Gardner

Thank you very much.

Narrator

We hope you’ve enjoyed this episode of the EY Innovation Realized Podcast Series by Elevation Barn.
If you would like to learn more about Errol Gardner, please visit ey.com.
To learn more about Elevation Barn, please visit us at elevationbarn.com.
To find out how EY leaders are helping clients rethink their business approach to unlock value for their organizations, visit ey.com.
To report accessibility issues with this podcast, email connect@elevationbarn.com

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Will Travis
Founder and CEO, Elevation Barn

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Episode 4

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0h 30m 45s

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How complexity is forcing us to rethink transformation

Key takeaways:

In this series

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