Part 1
Having spent over ten years in the digital trenches of corporate multinationals, and most of those in positions with copious opportunities for having to live with my own decisions, I’ve learned a lot of valuable lessons.
The first and most important one is that there are no cookie-cutter solutions. It may seem enticingly simple at that first presentation where the sparkly-eyed consultant shares his sense-of-urgency and resolution slides. Get a digital team together, drive a startup culture, be agile, start a few Tribes or Circles. Before you know it, you’ll be plowing full steam ahead on awesome transformative ideas with the wind in your hair and competitors at your back.
The truth is not as simple. Most companies of 40.000+ employees don’t work like startups. They have the inertia of seemingly endless dependencies, legacy-systems, opinions, and legal obligations, that drive most digital VP’s to isolate Digital. Build a separate new culture, jerry-rig it on top of the old, and see what rubs off.
The problem is that this approach doesn’t leverage the existing organization at all. The outcomes are often generic ideas that any outside consultants could have come up with. Maybe a product or two will take off, but unless you’re fortunate and they make more money than your core business, it will be a short-term and isolated success that doesn’t lift the end-to-end value chain much.
For real company-spanning digital transformation, you need to combine the two. Create the necessary space for agility and innovation to grow, in a way that incorporates and leverages the hard-earned skills and experience of the employees.
In the following, I will delineate a few of the core actions needed to make that happen.
Agility at scale
Being agile at scale is hard. SAFe does wonders if your primary purpose in life is building the one software suite to rule them all, but not all enterprises are that lucky. Most of them are in the aging, and decidedly uncool business of selling physical products, having legacy technology they can’t get rid of, and so anti-hipster that they insist on keeping their less-than-carbon-neutral production sites running.
Hiring a digital VP and bringing on a slew of digital initiatives, while building a new and agile organization on top of the old, may excite investors, but it isn’t a solution. Enterprise IT feels cumbersome because, on a certain level, it needs to be. Building something new on top without incorporating that need, just delays the problem.
It leaves IT between the rock of executives wanting digital to happen quickly, and the hard place of bearded youths excitedly throwing half-done products “over the wall.” It leaves organizations dichotic, spending too much effort on internal pressures to react to the external dynamics that they are there to address.
Rebuilding a train while running it at full speed is no simple task, but you can be smart about it. Agility isn’t about how fast you can develop something, but about how soon you can get new ideas into people’s hands. The value of agility doesn’t come from being able to say “pretotyping a UX” quickly or being able to deliver a one-weekend hackathon, but from how fast you can have a working solution in the hands of everybody.
Agility is built from the ground up. It comes from thinking ahead. From carefully stacking the cards in favour of responsiveness. Not everywhere, but where it is needed. It sounds counterintuitive, it is definitely not cool or hipster, but it’s the truth and everybody knows it.
Take AI as an example. Creating a one-off ML solution that will dazzle top management is relatively easy. At least if you know your way beyond the standard chatbots and RPA tools.
Take that same AI solution and put it in the hands of ten of your friends, and it may work fine. But reach twenty (or annoying uncle Ben with the big thumbs), and your developer will give you that dreaded “but it works on MY computer,” someone will point out that the data you’re using is violating GDPR legislation, or you’ll hit a new requirement that forces you to start over.
The inevitable party-pooper moment. We’ve all been there. You need to stack those cards towards agility.
The first and classic step is layering. Frank Duffy introduced shearing layers in the ’90s as a way to think about buildings aging at multiple speeds, and Gartner reintroduced it as PACE to address how different layers of technology should be able to evolve at different speeds and still work together.
Thinking of your enterprise application stack as layers working together at different speeds, with your innovative platforms at the top, is a significant first step, but it will only give you flexibility. It will not make you agile.
I’ll never forget the launch of one particular “innovation enterprise framework” built on these principles. There were so many hoops to jump through to get a simple server running, that I wouldn’t wish it on circus animals, but it did get us to where we could at least get data safely out of the back-end. As a first step, that is quite significant.
The second step is a proactive service design. You won’t find this in theory books, but most CIOs will have some version of it in their playbook.
Predict what technologies will be essential to innovation in 1–2 years and build up the capabilities to deliver on them before anyone knows they need them. That may sound far fetched, but it’s not rocket science.
I just spent three months of my spare time working with one of the leading enterprise AI companies in Denmark. I helped them build their new go-to-market and communication strategy, and they showed me all about the opportunities and governance pitfalls of enterprise AI.
Why? Because it’s been fairly obvious for a long time that AI will play a key role in future digital transformation, and I didn’t want to get stuck delivering data-lakes, AI scaling, and other things requested right now.
I wanted to get ahead of that curve. I wanted to understand how to build AI service layers with native data compliance at scale. I wanted to start preparing automated product-recognition, customer purpose analysis, and other core services of the future before I’m asked for it.
This is the first real step towards true enterprise agility, set yourself up to be able to deliver 80% of a solution in 1% of the time and cost by looking at where the ball will be instead of where it is.
For inspiration, take a look at how Amazon built up hosting and data capabilities to be modular while they were still only an online bookstore. From a strictly “get the books out there quickly”-perspective, it didn’t make a lot of sense, but from a “prepare to add services once we get new ideas,” it was the difference between Netflix and Pets.com.
The third and most crucial step is to stop looking at hammers and start looking at nails. Some years ago, our Communications VP got involved in building a new “social intranet” with our Digital team. They spent a year, two-digit million, and I don’t know how many worn-down developer keyboards creating the “next big thing.”
She wasn’t impressed. Even less so when I had the head of my SharePoint Online team build her the same solution using standard components, migrate all of their content, and make it look a lot better in the meeting while we were still discussing the solution she had received.
There is no guarantee that SharePoint was the right solution, but it was 80% of the solution, in less 1% of the time and cost, and on a platform that could scale. Starting there would have given them back 99% of their budget and time to built something genuinely innovative rather than just replicating what already existed.
The challenge here is that most digital departments come from startup culture. They’re used to grabbing a few cloud-servers and code away. They’re not used to an enterprise environment that already has tons of capabilities and opportunities to help them move faster or more quickly than any startup ever could.
To avoid missing those opportunities, you need to bridge Digital and IT. You need to get all your brains in the room and not just the ones with beards and sneakers. Sure, you can have separate innovation floors with lounge-chairs, whiteboard walls, and baristas, but don’t have them be where Digital sits. Have them be shared floors, where you get everybody together, and work out what to do about each nail. Maybe you don’t even need nails?
I know that having the guys stomping on the speeder in the same room as the people camping on the brakes is a tough sell. But do the effort to bridge the gap, prepare the technologies you need in advance and you’ll find that enterprise agility can be a lot faster and more effective than even your most impatient sales exec expects.
Enterprise agility may sound far-fetched, but it is not. Build your application stack to be flexible, invest in the technologies you’ll need early, and don’t isolate digital activities in one department. You’ll find that agility at scale isn’t just possible. It is also a lot more fun and effective than what you do today.
TL;DR — Being agile at an enterprise scale isn’t an oxymoron. It requires that you get comfortable running your business at multiple speeds, anticipate what technologies will be needed, and don’t isolate anyone from the process.
Part 2
This article is the second in a series of three. Feel free to read them together, separately, or skip to the TL;DR summary at the end of each.
Innovation at scale
Digital disruption is real, and enterprises need to innovate to survive. Sure, but as most of us have quickly realized, innovating at scale in a line of business where your revenue is almost entirely based on your ability to run existing core services is a tough job.
On the one hand, building a digital department as a separate unit with a fail-fast culture may be a safe approach from a cost perspective, but from a value-perspective, it doesn’t have enough impact. As Microsoft realized almost twenty years ago when they decided on their Cloud strategy, impactful innovation happens at eye level. It needs to be in people’s hands in weeks rather than years.
On the other hand, transforming your entire organization into tribes blissfully kan-banning their way through hyper-automation and connected retail projects runs a high risk of just confusing everyone. No matter the excitement level of your Digital VP, there is truly no sadder sight than a group of blank-faced execs leaving their hard-earned experience in the dust, throwing buzzwords around, and trying to avoid standing out as the too black-hat legacy one of the bunch.
To be honest, tribes confuse me too. Historically, tribes are insulated at vast distances, rarely interacting. How can that be a recipe for innovating a business? But I digress, back on point.
The point is that business innovation is not new. Digital has added opportunities that can be highly disruptive and hard to grasp, but at its core, it is no different from Heinz putting ketchup in a glass-bottle more than a hundred years ago. Instead of his competitors’ gooey brown substance in a dark pot, he used a glass bottle, so the red color beneath became visible. He put a label on the neck to hide the brown surface it had before vacuum sealing and delivered a beautiful red sauce that changed the game. Great product, game-changing experience.
When Sony launched the WH-1000XM3’s, which combined smart controls, audiophile sound, and discreet looks, it didn’t matter that nobody could pronounce the name. It was the first headphones to be both good quality AND smart, and it brought them right to the forefront of that market. Great product, game-changing experience.
Have a business selling beverages from vans in New York? Don’t waste money on an app so people can find your vans. Why would they? Make a deal with a running app, consolidate their data with your route-planning, and put your vans where people are. Great product, game-changing experience.
And not just on the external ground-shaking level. Early in my career, an intranet search engine had somehow garnered the ire of top management. The search page took two seconds to start loading and would break if you pushed the button twice, which everybody did — a lot.
No amount of costly developers could remove those two seconds delay, but a smart front-end developer put a small box on the page that would pop up the moment you pushed the button. It just said “searching…”. After that, the search engine was “fixed” without having changed at all. Again, all about the experience.
What Heinz, Gates, Jobs, Bezos, and everyone else who has ever excelled at this has amply demonstrated, is that the product can be outstanding, but the company providing the more compelling experience will win. Digital gives us great opportunities for reinventing that experience, but if you’re not lucky enough to have one of those true digital visionaries at the helm, make do with what you have.
The best card you have for building digital innovation at scale is the hard-earned experience of your existing organization. So instead of confusing them or hiding from them, make them active participants, and your innovation will reach new levels.
The first part of building an innovative culture is to create awareness of the outside-in experience. I’m amazed at how few organizations ask employees to spend one day every year in their customers’ shoes. Not just externally, but internally as well. Have IT employees spend a day in HR, have HR spend a day in sales, have salespeople spend a day with a customer. Have them mix it up and come back to share their findings with their colleagues.
Even without digital being a factor, you’ll see innovative ideas pop-up across the board, priorities reshuffling towards better use of people’s time, and better cohesion across units.
As one sales-exec once told me after she realized we spent six weeks clearing a new customer before sending them any brand materials or products: “This is just silly.”
Taking the outside-in view is that uncomfortable but necessary step outside your comfort zone, where you face your own idiosyncrasies. It’s when you stop focusing on improving what you do, and start focusing on what needs to be done.
The second part of building innovation at scale is to create digital competence, not just in an isolated team, but as part of the corporate culture. Everybody doesn’t have to be an expert. Present what is possible. Present what others are doing. Present what we are doing. Show all the cool things happening out there. Inspire people. You may create unrealistic expectations here and there. Still, the foundation of the ideas coming in will be sounder and more impactful than anything six ex-digital bureau people with a whiteboard and lounge chairs can imagine. No matter how much time you give them.
Not that those guys don’t have a place in the process. They do. They are the ones that do the inspiration and will have to do the filtering and transform the ideas into realistic product proposals. They are the ones providing input for the technology roadmap and the overall innovation plan that looks years into the future for what capabilities needs to be built up to succeed long-term.
The point is that digital innovation at scale requires everyone. Not just digital people. Everyone. If you succeed in that, the impact will be on a completely different level.
TL;DR Innovation requires the ability to take the outside-in perspective. Promote that perspective by forcing people out of their c
Part 3
This article is the third in a series of three. Feel free to read them together, separately, or skip to the TL;DR summary at the end of each.
Cost and compliance at scale
At one company I worked at, we once had a genuinely impactful role that I was lucky enough to hold for almost three years. We called it a “Product Manager,” but if you know modern frameworks, you wouldn’t recognize it. Instead of owning the user-experience or have any kind of engineering input, I owned a domain of products as part Enterprise Architect and part budget-accountable.
In other words, I didn’t just own the strategy and roadmap; I didn’t just oversee project costs; I was also accountable for the running costs and the value I’d promised to deliver. There were no easy ways out. All bucks stopped at my desk. Any misguided optimism on my part and it would land right back on my table.
It may sound terrible, but it was awesome. Working in a 40.000+ employee company, this was the first time I had a chance to build a complete end-to-end overview of my value-chain and could see the impacts up and down the line. My domain was “everything not-ERP related,” and among other things, it allowed me to build the business case for what would become the first large-scale roll-out of Office 365 in Europe.
The details of that project are for another time, but it gave me a unique insight into the challenges of retaining cost and value ownership in large organizations. Particularly in a domain where local innovation and self-governance were rampant way earlier than in other areas. Anyone who remembers the craze of self-developed Access apps will know what I mean.
Now that everyone with a company credit-card can launch a sophisticated company IT service — in about the time it takes a gourmet coffee-machine to finish a Latte and at about the same price — that problem has escalated. Not least, because that service may cost the same as a Latte to launch, but costs escalate at a rate of per-user-per-month, the service doesn’t integrate with anything else, and it typically has opaque terms of use that nobody reads.
Scale that up, and couple it with GDPR and the need to innovate, and you have an issue that can quickly undermine any digital transformation. The sheer volume of noise from competing apps, solutions, services, ideas that keep popping up throughout departments and affiliates, and the risk they entail is enough to overwhelm anyone. You get an organization that is mired in internal governance instead of transforming.
The core issue is that large organizations have big accountability-distances. There is too far between the people spending money and the people earning it. Too far between the people taking risks and the people affected by them.
Having learned from the initial Dot-com bust, modern startups are usually too small and too well managed for this to be a real issue. However, add a “digital initiative” in a multinational organization with a carte blanche to “do something,” and the risk of things escalating becomes much higher.
The key is to close the distance between cause and effect. Maybe not into one person, like we did with our custom “product manager” role, but at least enough that people start to see the potential impact of their actions.
Instead of just having employee policies, bring in tools that monitor internet-traffic and warn people if they’re doing something stupid. If that excellent free web-based Image editor they just started using, have terms-of-use that hand over IP rights for all uploaded media, give them a heads up. Don’t just rely on group-wide audits and reading the riot act.
Instead of having central license costs, start reporting them per division, per department, and maybe even per person if legal allows it. Show people and managers what they spend. Of course, you can’t do that with all IT costs or even all licenses, but that is not the point. The point is to nudge people. To show them enough that they start making smarter decisions on their own.
The ability to control cost and risk centrally went out of the window with internet-services, portable apps, and mobile app stores. You no longer have a security perimeter for your company. You have one in your data center, on personal devices, and in the minds of each employee.
To retain control of cost and risk at scale, you, therefore, need to leverage that people are by large good-intentioned. People do not want to damage their company. They are making the best decisions they can with the information they have.
Providing that information promotes better decisions and is by far the most effective way to avoid governance overload that would otherwise drown your digital transformation.
TL;DR — Cost and compliance at scale are no longer possible as strictly central activities. You need to nudge your employees by giving them the right information at the right time.
Final words
This series is not the definitive word on Digital Transformation. It is merely a primer. A few valuable lessons to show that Digital is doable at scale and even in very complex organizations. That although complex to achieve, the core tenets are not as complicated as some pundits will have us believe.
Digital transformation is here. It is happening now, and by sharing a few of the things I’ve learned dealing with it on a daily basis, I hope you may find a bit of inspiration to help you move forward faster and with a bit more peace of mind.
If not, I hope you at least liked the painted rocks I used for illustrations. They may not be pretty, but they were a lot of fun to make.