What Leadership Role Does An Effective CEO Need To Play In Today’s Business World?

Our Modernisation Journey

For a long time the default response to an aging legacy core business application was wholesale replacement - those were the golden days of the ERP and the ‘off the shelf’ package solution.

More recently organisations have started to think about what they could do differently to leverage the investment they have made in their ‘legacy’ applications and how they can better manage the risks associated with whole-sale replacement. There’s certainly no shortage of horror stories about large-scale system replacement projects going off the rails, and the price tag of some of those projects is eye watering - out of the price range of most organisations in New Zealand.

So what are the alternatives? The key to understanding what alternatives are available to you is a clear understanding of your ‘why’. Why do you need to do anything about your legacy application at all? Perhaps it’s about supportability - the application mostly does what you need from a business perspective but the software and hardware it runs on is no longer supported? Perhaps it’s about usability - maybe you need it to run on a mobile device but it’s been written to run on a desktop computers? Is it a workforce thing - are you struggling to find people who ‘code your language’? Whatever the reason the good news is that you have a range of options available to you including modularising, modernising, replatforming, extending, replacing etc. The picture below shows our ‘Modernisation on a Page’ view, explained in more detail below.

For us the ‘why’ was centred around enabling our organisational transformation. The context in which we operate is changing rapidly and we need to ensure we have fit for future capabilities and platforms in place to navigate those changes.

Our legacy application is over a decade old and is a monolithic application made up of a 11M+ lines of Java code. To get it future ready we needed to focus on first modularising the application as a lead into then modernising or replacing the various components.

We have invested a lot in building the right capabilities and culture within our teams to support the shift we need to make. Modularising is as much about changing the way our teams work as it is about technology changes such a microservices, APIs and changing code repository structures etc. Moving towards a Feature Driven Development process, and bringing along the right DevOps, Agile and CI/CD building blocks, represented a change to our working practices, processes, tools and the way we think about things.

One of the key challenges facing organisations who move towards delivering online services is agility and speed to market. Customer don’t want to (and won’t) wait weeks or months for changes or fixes to your application. That may have been ‘ok’ in a traditional enterprise IT context but it won’t work when you shift to external customer delivery. You need to be able to respond to change in a timely manner and that takes investment in infrastructure and capability. For us modularisation is a critical enabler of the move towards a build pipeline model which allows us to better meet those challenges associated with being an online service delivery organisation.

The delivery pipelines also underpin our move towards a product-centric team structure, where each team can run its own product-based delivery at its own cadence.

As part of modernising the application we also had to make some changes to the underpinning infrastructure. Our shift towards being more evidence-based and intelligence led as an organisation means we need to make some big changes at the data layer. Whilst we run enterprise grade databases today we know that over the coming few years the volume and velocity of data we deal with will increase significantly. We need to ensure we have a suitable data infrastructure that can not only support advanced analytics but over time allows us to get further into the realms of machine learning, analytics and AI.

We are also looking at what investments in business intelligence and data analytics capabilities we need to be making which will build on this modernised data layer.

All of our infrastructure is currently either virtualised (on-premise model) or cloud based. Our current batch based/key date driven model means we have a few high capacity days a year - for example, around 100,000+ users visit the website in one day in January each year. We have traditionally capacity managed to those peak workloads but the hybrid model we’re adopting allows us more choice around where we run our workloads and the ability to burst during high peak usage times. Our shift towards being event driven - rather than batch based - will also help to alleviate some of those peaks over time.

Using a mix of virtualisation, containerisation, serverless and software as a service allows us maximum flexibility in relation to the platforms and infrastructure we use to deliver our products and services.The adoption of cloud and ‘as a service’ based offerings mean your finance model is going to change - we are adopting a FinOps based model to work through these changes and implement the right risk and cost control points.

We have made good progress on our modernisation journey - having delivered a major modularisation and upgrade release earlier in the year - and we are already starting to see the benefits of a more flexible, responsive architecture.

At the same time we are working on the development of business to business (B2B) and business to consumer (B2C) APIs, sorting out our Digital Identity Management (IDM) platform, replatforming legacy line of business applications, looking at our business intelligence & data analytics capabilities as well as shifting our operating model to be DevOp-esque.

Piece by piece - step by step - we are putting in place the building blocks which will support our organisation transformation into the digital age.

Stalling transformation, its a leadership thing.

A rapidly growing number of organisations are reporting their digital transformations as either about to stall or stalling. In fact, according to a November 2018 survey by IDG, more than 50 percent of companies polled have abandoned their transformation projects. Forrester echos this, claiming that half of all digital transformation projects have stalled.

Those are some worrying stats at a time when all industries are undergoing disruptions and fighting for long-term relevance. I believe we’ve long passed the ‘transform or die’ stage; it’s no longer even a choice however too many organisations, and exec teams, still don’t feel that sense of urgency. Give it a few more years and those organisations will become the taxi companies of the transport industry.

Various analysts attribute these stalls - or deadlocks - to a range of factors: budgets, competing priorities, organisational and technology silos, security concerns and that fantastic catch-all of culture all get mention in these various whitepapers.

In my experience the issue is dead simple in the majority of cases; it hinges on leadership. Organisations simply have the wrong type of leadership to drive transformation. The old adage of ‘what got you here won’t get you there’ has never been truer.

So how do you know if you have the wrong type of leadership? There are a number of qualities to look for to assess if you have the right type of leadership in your organisation:

• Self-awareness - the right leaders know their both their strengths and weaknesses, and are prepared to be open and real about them. The industrial age thinking that management have all the ideas and answers has really had its day. If you have to constantly convince senior leaders that it was ‘their idea’ to get anything done then that should be a red flag.
• Greenwashing and unjustified optimism - another casualty of the industrial age management wisdom is the drive for positivity, especially the kind that happens just before an organisation folds. I’m a huge believer in positive thinking and pushing forward but the reality is you can’t effectively manage by fairytale. If you’re always greenwashing or editing memos to paint a positive story then that should be a clear warning flag. It’s something I fondly call ostrich management - head in the sand…going nowhere.
• Decision making and autonomy - modern leaders empower and energise their teams to achieve results. Devolution of decision making is something to watch for - if every decision feels like it’s yet another memo heading up to the exec team then that is usually a bad signal.
• Problem solving and exploration - complexity is increasing all around us on a daily basis - divergent thinking and exploring possibilities are essential qualities of leadership. Leaders should facilitate the solving of problems - not aim to be chief problem solvers themselves, which usually turns into micromanagement.
• Measuring value and contribution - again, the industrial age ‘time served’ model simply is no longer fit for purpose. Measuring someone’s contribution is about results - here and now - not how long they have been around. The ‘job for life’ days are over and we need to shelve the thinking that came with it. Jack Welch of GE fame advocated regularly culling the bottom 10-15% of performers which seems a bit brutal but equally modern, agile organisations simply have no room to be piling up the deadwood. If your leadership structure is heavy with people whose value and contribution is unclear to most people around them then perhaps its time to review it.
• Collaboration and influence - modern leadership is inclusive and collaborative, bringing all parties along on the journey as much as possible. Influence has replaced authority as one of the most powerful tools in your leadership toolkit. An operating model where conversations only happen in pockets and decisions are made at the ‘apex’ kill collaboration and innovation and are something to watch out for and avoid.
• Resilience and navigating ambiguity - leadership teams that are constantly asking for more information before making a decision have a bumpy ride ahead - the world is increasingly ambiguous and being able to navigate that ambiguity (and it’s results) is an essential trait of fit for purpose leadership. A balance of data and ‘gut based’ decision making is required and if your organisation gets paralyzed by wanting more data it will simply be left behind by others who are willing to operate in a more ‘just in time’ manner.

The best leadership teams I have worked with have focused just as much on how they lead as they have on who/what they lead. Leaders should be holding each other accountable to exhibit the right values and behaviours, especially at an executive level. If you’re not having a conversation to check in on how you’re leading on a regular basis then I’d suggest that should be top of the agenda for your next exec team session. Be willing to be hard on yourselves as leaders and actually act on what you find - too many teams spend too much timing explaining away things rather than actually acting on them to fix whatever issues exist.

I totally understand there are plenty of people who have built careers on doing what they have always done, and that change is confronting - we are however moving beyond industrial age management into digital leadership which is a different ball game and change is the new normal. Steady state - or stalling - simply isn’t good enough anymore. We need to usher in a new generation of digital business leadership - we owe it to our organisations, our customers and most importantly our people.