Yuval Dvir on how firms can measure the success of business change

Yuval Dvir has held senior transformation roles at Microsoft, Skype and now Google Cloud - where he spearheads global scaled partnerships - having formerly been an innovation and funding consultant, venture capital practice for EY in Israel. Now based in London, where he is a business executive for SandBoxAQ, he explains to The AI Speakers Agency how his engineering and consulting backgrounds give him perspective on how businesses must evolve in the face of relentless change.

From your experience leading change at major global companies, how do you define genuine transformation - and what separates it from change for change’s sake?

Yeah, so I think the way I look at it is it needs to be, you know, a positive transformation and positive change. I think changing for the sake of change doesn’t sort of get us anywhere.

So, if something is working, it does not necessarily need to fix it right away. But what we’re seeing nowadays in how the world operates is certain fundamentals of change in how you run a business, how you build the company, how you design and structure, how you manage a team.

A lot of that is triggered by technology, but there are other sorts of reasons that are pushing organisations to change. So, I think that’s why, you know, change and transformation is important.

And if you think of it from a business lens, I think a transformation is the essence of what it means to kind of run a business. It’s taking all those business principles from product and engineering and commercialisation and marketing and condensing it into sort of the key items - almost a nectar of what it means to have business acumen.

Because there’s an urgency, there’s a limited amount of time, and the impact required is significant. The ability to influence the people is very important. Eventually, the whole idea of a transformation is to improve business results.

They usually lag a successful transformation, but there needs to be an objective of it. Without an objective and just, you know, saying we need to change or transform because that’s the buzzword of the industry, then we’re just paying lip service to the industry. We need to really think internally about what sort of change is required and how to go about it.

Many executives still resist change, even when market conditions demand it. What’s your message to leaders who are hesitant to evolve - and what risks do they run by standing still?

I think everyone, you know, every business leader is also, you know, human first. And as humans, on the one hand, we like change, but on the other hand, the brain likes predictability.

Many times, it likes to go into the path of least resistance. So, we have a tendency to look for the path of least resistance and the easy way out, which in many cases, from an evolutionary perspective, is a very positive thing.

Because if you can achieve a certain goal without using too much energy, you tend to survive longer. However, while that’s very good in the short run, in the long term you lose your edge. And it’s the same thing with business - if you go for the short term, if you don’t push yourself, if you don’t challenge yourself mentally, then eventually you’re going to lose your edge.

You’ll finally find yourself, as a person and as a business, irrelevant as well. So, the whole idea of why we need to change is, you know, if I look at it from multiple pillars:

First, from the business perspective, all businesses want to avoid what we call the Kodak moment. Kodak was a very successful company and obviously missed completely on the digital camera transformation - not because they hadn’t thought about it, but because their culture internally was so bureaucratic and filled with politics and egos that they couldn’t make the right decision and follow through.

From a business perspective, it’s really about avoiding the Kodak moment and staying relevant. From a technology perspective, it’s also true - to really stay relevant. You know, cloud is coming into play, the internet came about - you don’t want to continue working in the 20th century. You need to take those new technologies and be relevant to your customers, who require better, faster service and new technologies in play.

That’s very true from a technology perspective - the need to change. And then, for leaders - again, leaders and employees are both people - from a leader’s perspective, you need to know how to lead.

Nowadays, post-pandemic, you need to know how to lead the remote workforce, a virtual workforce, having authority and influence from afar - which some leaders are not comfortable with. Especially as we get older and live longer, we’ll have multiple careers. So, it’s always important to stay on top of that and not find yourself irrelevant in a few years just because you hung on to practices that are no longer relevant.

From an employee’s perspective, what’s in it for me, and what’s in it for you in change, is again staying relevant - making yourself even more attractive to future employers by knowing how to work remotely, adopting these new tools, staying competitive, and working with uncertainty.

And when we bring the goal of the business and company transformation into the individual incentive, that’s how you align incentives and ensure that any change you propose will stick - because it’s organically understood by people from a grassroots perspective, and everyone is pointing in the right direction.

Measuring transformation is notoriously difficult. What indicators or success metrics do you believe truly capture whether a business change is working?

Yeah, it’s quite a difficult thing to deal with because, let’s start from the end - the whole idea of a transformation is to improve business results.

So, we need to figure out what those business results are that we want to focus on, and at what timeframe we should start measuring them to see a positive change. That doesn’t necessarily need to be revenue-related.

If we’re building a product, how’s the quality of service of that product? How many bugs do we have with each iteration, and are we seeing improvement in that? It really depends, as well, on the business - what are the key metrics we’re looking at?

I think back at Skycon, we did a transformation and separated metrics into four pillars. Some of them were reach - how many connected users do we have? Engagement - how many active users, and how does that improve as the transformation progresses?

Then, we had monetisation - our conversion rate, our attach rate - how’s that improving? How are we removing noise from RPMs, helping them make better decisions?

Lastly, sustainable operation. Throughout those, one of the key things that’s very hard to measure but you can feel and sense is culture. Do we really have a meritocracy culture as much as possible? It can’t be perfect - we’re human - but something close to it is a real transparency.

You need to weed out people who have taken bad behaviours into the organisation - not sharing information, seeking spotlight, avoiding transparency - doing what we call mirror dressing and smoke and mirrors.

So, those are the types of metrics we should be looking for, remembering that ultimately, it’s about improving business results. If the results don’t improve within a year or two, something’s probably not working - it might be the change, or the strategic vision not aligning with the transformation.

Culture is often described as the invisible hand that drives transformation. Why does culture become so critical during major periods of organisational change?

So, I think culture is basically the glue - it’s the DNA of the organisation. It defines the norms and behaviours by which the organisation operates.

Culture is hard to change, especially if you’re an established startup or business. It’s almost impossible to change. But culture is eventually derived from the leaders - and it’s not just the words of the leaders, though communication is key throughout transformation.

More communication is better, but it’s mostly about action, because people are more honest in their actions than in their words. If they see leaders talk but not walk the same way, that’s the most destructive thing to culture - it creates a very negative culture.

But if leaders behave the way they want the organisation to act, then that improves, and people imitate it. That’s why meritocracy comes into play - if we incentivise and reward people for the right behaviours, then more and more people will behave that way. And voilà, you’ve got the culture you aspire to have.

Culture is key because it determines how we talk to our customers, what customer service is. Culture determines whether, when you’ve got a problem that’s out of your scope, you say: "It doesn’t matter - we’re still the same company, I’ll own this end-to-end.

Large organisations often struggle with this - they’re too focused on their own P&L. That’s also a problem of leadership. Whenever something comes up that’s not tied to their P&L, they forget it.

In my group, I’ve said clearly that we need to look at the entire scope of the customer. That doesn’t mean we need to own everything, but we own that relationship - ensuring that whenever customers engage with any part of our business, they’re responded to and supported.

Eventually, that demonstrates how it pays off to our own P&L - because if customers see value in what you offer, they’ll be more inclined towards your influence and building a business together. It eventually pays, but it requires strategic vision to see how that payoff comes forward.

That’s why culture is so critical. Organisations have realised its importance over the last few decades - but I don’t think they’ve fully realised how culture gets created, or how important leaders are in shaping it, for good and bad.