Gilles Babinet’s recipes for transforming organization at work

Gilles Babinet is an expert in the field of innovation and digital transformation. We talk about how CEOs can impact speed of execution, feat. Elon Musk.

Gilles Babinet’s recipes for transforming organization at work

The NextGen Team
October 28, 2020

A successful entrepreneur, astute observer of innovation and digital transformations, thinker on management and new forms of work organization, Gilles Babinet is one of the few to have rubbed shoulders with dozens and dozens of entrepreneurs, from SMEs to CAC40 giants. His expertise is all the more valuable in that management and new forms of work organization still seem to have not yet completed their transformation. Questions and doubts remain. Gilles Babinet has observed and analyzed some successes such as Haier, Hydro-Québec and McDonald’s, but also many failures, particularly in large organizations, which are clearly far from being able to carry out the transformations required by the new entrepreneurial order.

It must be said that when Gilles Babinet accompanied transformations in the workplace, particularly through digital technology, there was still no real reference system, books or university research on the subject. A pioneer, in short. And a pioneer who saw many companies crashing on the wall of innovation, reproducing errors that were still intuitive.

In particular, he has seen a recurring confusion between the means and objectives of innovation, like companies that invest massively in new technology instead of digital transformation: guaranteed failure.

His observations and analyses have gradually led him to rethink the relationship between operations and strategy in a logic of work transformation. How can systems be made as efficient as possible? How to transpose them, if only possible?

Quickly, Gilles Babinet had the intuition that the transformation of a company is based on a very strong interweaving of management, governance and technology.

Trying to play on just one of these variables is not worth it, and seems doomed to failure. Many companies, however, particularly in Europe, intend to become liberated companies, but without touching anything of their dusty, old-fashioned management model. In short, agile or decentralised authority within the company will not be able to avoid a complete revolution in organisation, starting with the way employees are linked together.

This does not mean that the transformation of companies must systematically tend towards a more horizontal redistribution of authority or the disappearance of managers. Gilles Babinet likes to take the example of Elon Musk’s companies to support his analysis, from “democracies” or companies to organizations that are both massively distributed and also highly authoritarian. Add to this relatively traditional fields of activity, such as satellites, energy or the automobile, and you end up 1000 leagues away from the preconceived idea of new work organisations.

How then can we explain that the American “genius boy” companies manage to have such tight innovation cycles and pulverize in only a few years the previous levels of excellence? The answer lies in three words: data, management and governance.

Another reason, long ignored or underestimated, is the radical nature of these models. Radicality in the sense that these companies that manage to impose themselves in the agile world are not based on incremental innovation models. Hence also the difficulty for old models to adapt: very often this amounts to a leap into the void that requires extremely courageous management.

To the point of claiming that such adaptation is impossible? There are many examples of this.

In any case, there is no miracle recipe, but Gilles Babinet has learned a few lessons from it all the same. In his eyes, digital transformation from within is often doomed to failure. The example of McDonald’s is significant. Undertaking their digital transformation on American soil, they took the gamble of creating new Business Units in several states and populating them with talent. Then, the transformation had to be done little by little, incrementally… A failure. Technological heritage, heterogeneity of systems, corporate culture often prove to be insurmountable. Another key reason is the culture of the individuals who make up the ranks of traditional companies. As intuitive as it may seem, the employees of these giants of the last century, if they are where they are today, are there because they are not entrepreneurs, because they were unable or unwilling to launch their own adventure. Therefore, expecting an entrepreneurial culture from the employees of McDonald’s or any other traditional company is nonsense. A little bit like asking a cat to pretend to be a dog… It will never succeed, no matter how good a cat it is.

This question of entrepreneurial culture is also closely linked to the difficulty of thinking and initiating digital transformations internally. Contrary to what one might think, the main obstacle will not be the regulator or the customers to be convinced, but rather the employees within the company who do not wish to see their habits disrupted or their role called into question by these transformations. The case of the Polish mbank group seems to confirm this hypothesis. After buying out a banking startup, i.e. an external acquisition, the managers of the Polish group gave them carte blanche and invested massively in their information system. Result? 12 years later, they have 4 times as many customers. An undeniable success, but just think about it: they took the risk of identifying promising transgressors and gave them the power of true barons. The bet was crazy, it was worth it.

Models of innovation also deserve attention and questioning. To use Gilles Babinet’s words, “Putting your finger in the wound”. The inspiring example of Spotify shows that innovation needs to be thought of in a totally cross-functional way and take all teams with it, regardless of the size of the company. Imagining a direction for innovation doesn’t really make sense in such an organization. Yet this is what many companies do. On the contrary, Daniel Ek, in order to maintain his speed of innovation despite thousands of employees, has opted for a total integration of scrum, a very loose system of reporting between innovation teams, and a large margin of autonomy for each unit that makes up the structure of his entrepreneurial flagship.

The last decisive element certainly lies in the person of the CEO.

It takes a lot of courage to undertake such transformations, to take the risk of failing to transform one’s company. Such courage is only possible if the CEO actually has a very pronounced and successful entrepreneurial culture, not to mention a proven taste for transgression.

An innovative entrepreneur will never skip breaking the rules, crossing the yellow lines. It is no coincidence that all the bosses or founders of GAFAM have, at one time or another, been thugs, hackers. Zuckerberg had stolen Harvard’s contacts in his time, Bill Gates used to steal from the library to get access to a computer and so on. Such a culture is essential: the CEO will have to bring it to his employees as well as to the shareholders.

It remains to be seen how a promising and innovative start-up can grow into a unicorn of several thousand employees in just a few years, without becoming fossilized in the process. What’s the secret behind the genius behind Spotify or the impressive track record of GAFAM? Gilles Babinet offers an original and thought-provoking answer. All these companies, without exception, are led by true management gurus.

Whether we’re talking about Daniel Ek, Bill Gates or Mark Zuckerberg, all of them are, or have been, engaged in a continuous, open-ended reflection on management and corporate culture. More than a variable, it is an obsession.

Add to it another obsession, that of being able to set a very precise vision to music through operations, and you get a recipe that seems to work.

So obviously, there is no miracle recipe for successfully and securely transforming a business. But relying in this way on those who are today at the top of the distributed authority and agile companies, sometimes after only a few years of existence, can only bring elements of an answer, tracks to find one’s own way in the jungle of new forms of organization. And for good reason, moving to other models of governance and other organizations of work has become, in just a few years, an imperative necessity.

This synthesis is the result of a collective and virtual “Thrive-In” session that took place on June 2, 2020 and whose recording can be found here :

Gilles Babinet’s recipes for transforming organization at work

The NextGen Team
July 7, 2020

A successful entrepreneur, astute observer of innovation and digital transformations, thinker on management and new forms of work organization, Gilles Babinet is one of the few to have rubbed shoulders with dozens and dozens of entrepreneurs, from SMEs to CAC40 giants. His expertise is all the more valuable in that management and new forms of work organization still seem to have not yet completed their transformation. Questions and doubts remain. Gilles Babinet has observed and analyzed some successes such as Haier, Hydro-Québec and McDonald’s, but also many failures, particularly in large organizations, which are clearly far from being able to carry out the transformations required by the new entrepreneurial order.

It must be said that when Gilles Babinet accompanied transformations in the workplace, particularly through digital technology, there was still no real reference system, books or university research on the subject. A pioneer, in short. And a pioneer who saw many companies crashing on the wall of innovation, reproducing errors that were still intuitive.

In particular, he has seen a recurring confusion between the means and objectives of innovation, like companies that invest massively in new technology instead of digital transformation: guaranteed failure.

His observations and analyses have gradually led him to rethink the relationship between operations and strategy in a logic of work transformation. How can systems be made as efficient as possible? How to transpose them, if only possible?

Quickly, Gilles Babinet had the intuition that the transformation of a company is based on a very strong interweaving of management, governance and technology.

Trying to play on just one of these variables is not worth it, and seems doomed to failure. Many companies, however, particularly in Europe, intend to become liberated companies, but without touching anything of their dusty, old-fashioned management model. In short, agile or decentralised authority within the company will not be able to avoid a complete revolution in organisation, starting with the way employees are linked together.

This does not mean that the transformation of companies must systematically tend towards a more horizontal redistribution of authority or the disappearance of managers. Gilles Babinet likes to take the example of Elon Musk’s companies to support his analysis, from “democracies” or companies to organizations that are both massively distributed and also highly authoritarian. Add to this relatively traditional fields of activity, such as satellites, energy or the automobile, and you end up 1000 leagues away from the preconceived idea of new work organisations.

How then can we explain that the American “genius boy” companies manage to have such tight innovation cycles and pulverize in only a few years the previous levels of excellence? The answer lies in three words: data, management and governance.

Another reason, long ignored or underestimated, is the radical nature of these models. Radicality in the sense that these companies that manage to impose themselves in the agile world are not based on incremental innovation models. Hence also the difficulty for old models to adapt: very often this amounts to a leap into the void that requires extremely courageous management.

To the point of claiming that such adaptation is impossible? There are many examples of this.

In any case, there is no miracle recipe, but Gilles Babinet has learned a few lessons from it all the same. In his eyes, digital transformation from within is often doomed to failure. The example of McDonald’s is significant. Undertaking their digital transformation on American soil, they took the gamble of creating new Business Units in several states and populating them with talent. Then, the transformation had to be done little by little, incrementally… A failure. Technological heritage, heterogeneity of systems, corporate culture often prove to be insurmountable. Another key reason is the culture of the individuals who make up the ranks of traditional companies. As intuitive as it may seem, the employees of these giants of the last century, if they are where they are today, are there because they are not entrepreneurs, because they were unable or unwilling to launch their own adventure. Therefore, expecting an entrepreneurial culture from the employees of McDonald’s or any other traditional company is nonsense. A little bit like asking a cat to pretend to be a dog… It will never succeed, no matter how good a cat it is.

This question of entrepreneurial culture is also closely linked to the difficulty of thinking and initiating digital transformations internally. Contrary to what one might think, the main obstacle will not be the regulator or the customers to be convinced, but rather the employees within the company who do not wish to see their habits disrupted or their role called into question by these transformations. The case of the Polish mbank group seems to confirm this hypothesis. After buying out a banking startup, i.e. an external acquisition, the managers of the Polish group gave them carte blanche and invested massively in their information system. Result? 12 years later, they have 4 times as many customers. An undeniable success, but just think about it: they took the risk of identifying promising transgressors and gave them the power of true barons. The bet was crazy, it was worth it.

Models of innovation also deserve attention and questioning. To use Gilles Babinet’s words, “Putting your finger in the wound”. The inspiring example of Spotify shows that innovation needs to be thought of in a totally cross-functional way and take all teams with it, regardless of the size of the company. Imagining a direction for innovation doesn’t really make sense in such an organization. Yet this is what many companies do. On the contrary, Daniel Ek, in order to maintain his speed of innovation despite thousands of employees, has opted for a total integration of scrum, a very loose system of reporting between innovation teams, and a large margin of autonomy for each unit that makes up the structure of his entrepreneurial flagship.

The last decisive element certainly lies in the person of the CEO.

It takes a lot of courage to undertake such transformations, to take the risk of failing to transform one’s company. Such courage is only possible if the CEO actually has a very pronounced and successful entrepreneurial culture, not to mention a proven taste for transgression.

An innovative entrepreneur will never skip breaking the rules, crossing the yellow lines. It is no coincidence that all the bosses or founders of GAFAM have, at one time or another, been thugs, hackers. Zuckerberg had stolen Harvard’s contacts in his time, Bill Gates used to steal from the library to get access to a computer and so on. Such a culture is essential: the CEO will have to bring it to his employees as well as to the shareholders.

It remains to be seen how a promising and innovative start-up can grow into a unicorn of several thousand employees in just a few years, without becoming fossilized in the process. What’s the secret behind the genius behind Spotify or the impressive track record of GAFAM? Gilles Babinet offers an original and thought-provoking answer. All these companies, without exception, are led by true management gurus.

Whether we’re talking about Daniel Ek, Bill Gates or Mark Zuckerberg, all of them are, or have been, engaged in a continuous, open-ended reflection on management and corporate culture. More than a variable, it is an obsession.

Add to it another obsession, that of being able to set a very precise vision to music through operations, and you get a recipe that seems to work.

So obviously, there is no miracle recipe for successfully and securely transforming a business. But relying in this way on those who are today at the top of the distributed authority and agile companies, sometimes after only a few years of existence, can only bring elements of an answer, tracks to find one’s own way in the jungle of new forms of organization. And for good reason, moving to other models of governance and other organizations of work has become, in just a few years, an imperative necessity.

This synthesis is the result of a collective and virtual “Thrive-In” session that took place on June 2, 2020 and whose recording can be found here :

Interviews
WRITTEN BY

The NextGen Team

Susanne Aebischer and Luc Bretones are the hosts of The NextGen Enterprise NET

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