7 Themes for Making an Exponential Difference in the World

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.

Platforms for Digital Business

The nature of what organisations want & need from their IT systems has well & truly changed. It used to be all about efficiency & automating repeatable business processes; now its about creating whole new products, services and customer experiences using technology. It used to be all about cost; now its about agility & speed to market.

Of course in reality the world isn’t that black & white; like everything else its a balancing act. A range of different platforms is needed to support the efficient and effective operations of a modern organisation - especially if the organisation has legacy systems.

We are adopting what we’ve dubbed the ‘hybrid platform’ approach. That means making use of a range of on-premise, public cloud and SaaS based platforms. This gives us maximum flexibility, forces standardisation in areas where it makes sense and frees us up to put most of our effort into the things that are truly unique (differentiators) to our organisation.

Using a mix of platforms means we have to put in place some foundational building blocks such as identity & access management which supports a federated model, operational & security management tools which traverse traditional system boundaries and processes & practices that support service aggregation & federation. Additionally we need to know which platforms we want to use and will actually work for us. We often refer to these - and other building blocks - as the ‘orchestration and governance’ layer.

Using a range of platforms means we can go at whatever ‘speed’ we need to. We can maintain a core of legacy master data (slow moving) whilst connecting it to a chatbot service (fast moving) to provide end users with self-service functionality in a matter of days, not weeks or months.

Public cloud services and SaaS offerings form the basis for most of our new application development however at the same time we have a fleet of legacy business applications which would need to be re-written/re-factored to operate in a pure cloud environment. For those we need platforms that support a more traditional, tiered architecture. For the bulk of our applications we utilise a mix of virtualisation and containerisation.

Our data centre infrastructure is part of what enables us to operate at these different speeds. VMWare and AWS recently announced a partnership which allows organisations to fuse their on-premise and AWS platforms. The idea is that we can continue to utilise the tools & processes we have in place whilst taking advantage of the services and functionality offered by AWS, all whilst seamlessly spanning data centre facilities anywhere in the world (in our case Wellington and Sydney). This enables the hybrid model and also simplifies any migrations to the public cloud by allowing you to stage & manage them better.

A few weeks ago we completed a proof of concept of the VMWare on AWS offering and we able to successfully create a Software Defined Data Centre (SDDC) environment which delivered on the promise of the hybrid model. The POC passed on all the test scenarios & success criteria we set out and gave us the confidence that the hybrid platform architecture we want to build is possible, scalable and cost effective.

Careful application portfolio management (another discipline you need to develop) will allow us now to decide how we tackle modernising our legacy IT systems. For some we may choose to rewrite them, however for others it may simply be a matter of replatforming them onto our hybrid platform.

The days of standardisation and ‘one size fits all’ are over. Modern organisations need a range of platforms to enable their business. I think this applies to both technologies and practices - it’s one of the reasons I believe the traditional PMO approach is well and truly dead (did it ever actually work for anyone?!?).

Understanding the drivers for each part of your organisation and what ‘speed’ they need to go at will allow you to respond to (and sometimes even preempt) the platform needs of your organisation.

Disclaimer - I’m not advocating for or promoting any product or vendor in this post, rather the intent is to share thinking & experiences so others can build on those/factor them into their own activities (or not). As always I would suggest you do your own research and figure out what will work best for you.

Notes on Digital Governance

Digital Transformation is the new black. If you’re not doing Digital Transformation then what are you doing?!? With disruption looming around every corner how do you chart and navigate the course through ‘digital adoption’ to keep you and your organisation relevant?

Every major revolution has brought with it step change, and digital is no exception. The ‘peer to peer’ economy is transforming things like accommodation (Airbnb), transport (Uber) and even money (Blockchain) but my observation is that many (most) organisations don’t have the tools and mechanisms in place to traverse this step change. They are trying to use yesterday’s tools to manage today’s challenges. I’ve found this particularly true when it come to corporate and programme/project governance.

Some organisations are starting to tackle Digital Age governance issues such as digital literacy and diversity however it does feel like it’s currently a game of catch up and I’ve seen limited evidence of this permeating to the coal face of governance - most governance groups still seem under-equipped to govern in this new digital world.

There are a few things I’ve observed - some of which are obvious and others are little more obscure - about digital governance that I thought I’d share with you, in no particular order:

• In my opinion most project reporting is rapidly becoming unfit for purpose. The RAG status based project report’s days should be numbered. Whilst reporting as we know it forms part of good project hygiene it is often too high level (ineffective) and doesn’t support the right kinds of conversations happening at a governance level. Most project reports at best tell only some part of the story and at worst detract from areas that should get more focus/concern.
  

• Related to that I’ve seen too many people on governance groups who don’t fully understand their roles on the group and/or feel unequipped to fulfill those roles. Digital Governance is a new skillset and people need to realise this means upskilling/training/coaching, even for people who have previous governance experience. You can no longer wear the ‘I don’t get that technology stuff’ as some sort of badge of honour - to govern effectively you have to understand it.

• In the customer-centred world your governance function needs to incorporate the voice of the customer, be that via direct membership or some kind of a proxy. And no a customer survey or questionnaire does not represent customer engagement. I’m talking about active and ongoing dialogue based engagement. How customers experience and perceive your products & services should be top of the discussion list at every governance forum.

• The Programme Management Office (or similar function) is even more critical in the Digital world but it too needs to adjust its focus and how it operates. The PMO needs to be more focused on benefits/outcomes realisation & risk management and less on progress or spend tracking. No one should care if you’re on time and budget if you haven’t delivered the value you needed to by key milestones.

• In that same vein it is essential to measure progress, not process. Saying your 60% of the way through a project is meaningless unless you can express that in terms of impact & delivery. Measure progress by asking probing questions about what has actually been delivered, what impact has it had on our customers and what benefits have been realised/risk mitigated.

• Governance in the digital world needs to happen at different levels of the organisation. It’s no longer exclusively the domain of senior management. Technical governance for example is crucial to the long term sustainability and supportability of any products & services you build. Getting the balance of representation - skills, experience and perspective - on your governance group right is essential to making the best possible decisions as you navigate digital transformation.

• Part of the responsibility of any effective governance group is to probe for the dirty laundry - find it, understand it and address it. Don’t avoid it. What are the real risks and barriers to success - do you have reliance on specific individuals or lack of capability in some areas? It’s the role of the governance function to flush out those things and ensure they are being managed appropriately. Nothing sets off my bull-radar quicker than an ‘all green’ status report on a large, complex project - it should do the same for you. The role of governance is not to keep the reporting in the green, it’s to deliver the right results and if that means being in amber for a while then so be it.

• As we move forward into the Digital Age things are becoming more connected and complex - most organisations are realising they cannot go it alone and are starting to partner to delivery products & services. That’s good news and the right direction to go in the majority case but what most organisations don’t do is grow their capability to effectively partner - they assume it’s just an extension of procurement which it really isn’t.

• The organisations that I’ve seen getting it right establish a complimentary unit to the PMO called something like the Vendor Management Office (VMO). The VMO should have the right skills and processes in place to manage delivery via partners & vendors - things such as evaluating partner services, overseeing day to day service delivery interactions and long term relationship management should all be part of the VMOs role. Governance functions should have as much oversight of VMOs as they do of PMOs.
  

• Traditional governance is comfortable with commercial contracts. Partnership requires a set of agreements that go beyond any contract. You need a shared understanding of things like ‘good enough’ and ‘quality’ to ensure that you’re all aligned behind meeting your customers expectations of your products & services. These aren’t argueably part of the governance function however you should be ensuring that these things are in place and working correctly. They should be part of your operational management and simply baked into how you work. The VMO plays a critical role in getting that in place. In practice these might be as simple as acceptance criteria and checkpoints that are built into the way you work with your partner organisations that are understood by everyone involved.

• In a world where things are changing at sometimes whirlwind pace you should schedule in (yes actually put into the diary) periodic challenge reviews of projects during which you review the fit of what you’re doing with organisational direction, the need of the customer and ongoing sustainability. Are you still doing the right thing, will the customer use it and can you afford to deliver & support it? It’s important to face facts that some projects fail to deliver and there’s no point in throwing good money after bad.

Those are just some of my insights and observations, hopefully they’re useful to you - I’m really privileged to work with various groups of awesome people, figuring out a path forward and learning along the way.

If you have any insights or follow up comments feel free to drop me a line.

End of This Tour - Q&A

Over the last 3 months I have spent quite a bit of time mentoring, advising and speaking on a range of digital and technology related topics. The interviews and panel discussions have all been fun and I’ve met some great people along the way but they have also demanded a lot of my time (most of it being my own time, outside of work hours) and given other time pressures starting to stack up at the moment that’s going to be unsustainable. So it’s time for a break.

I will still be working with some specific groups on key initiatives but please don’t be offended if the response to your request to speak at your next event is ‘no’ - nothing about you or you event, there are just too many conflicting demands on my time.

I thought I’d capture some of the common or re-occurring questions (and my answers) from panel discussion and interview as a blog post, hopefully providing you with some useful insights & experiences (from my perspective - as always I reserve the right to be wrong or to change my mind).

So with that said, let’s get into it.

What is a “digital culture”?

In my experience digital culture is many things to different people and is applicable to multiple topics — but it all boils down to one thing: the relationship between humans & technology and how that shapes our everyday lives. It’s about how technology, and the access to information (internet), shapes the way we think, interact, behave and communicate. In most organisations digital culture manifests itself as increased agility, a closer connection with the customer, the willingness to take more calculated risks and to adjust course based on the data collected along the way.

What’s the cost to organisations of pursuing a digital cultural change?

Today almost every industry & sector is being disrupted by technology and so I think pursuing a digital culture is no longer a choice most organisations can afford not to make. In a digital world, one of the biggest risks is not taking risks. Developments in things like artificial intelligence and machine learning will undoubtedly change our everyday lives, our society and the economy yet no one can foresee (with too much certainty) exactly how things will change. Having a digital culture will allow you and your organisation to navigate these times of uncertainty & capitalise on the opportunities they bring rather than pulling the blanket over you head & hoping it passes.

Organisations often count the cost of pursuing digital change in terms of cannibalizing exist revenue streams - instead they should focus on the opportunity to remake and grow those revenue streams in a digital world.

How do you measure the success of the digital cultural change and when does the journey end?

Culture change is not an activity with a clearly defined beginning and end - the reality is that the journey never ends but it gets more interesting and impactful with time.

I have previous measured digital culture change along 4 key metrics:

1. People Measures - this is largely about self assessment. How do people that work at your company feel - do they buy into the vision, can they relate it to their role and what do they say about the organisation in non work circles?

2. Customer Measures - how do customers and the community experience your products and services? What are you doing well that you should continue doing, what could you be doing better and what should you stop doing all together?

3. Business Indicators - how does what you’re doing around culture link to your vision and link with your business imperatives? This is the realm of business efficiency powered by cultural change. Business indicators usually fall into two categories: tangible and intangible; both of which are important.

4. Financial Measures - in my experience if you take care of your people, customers and business then the money takes care of itself. The aim is usually to increase revenue, avoid cost and take risk out of the equation as much as possible.

In an organisation who is responsible for driving the change to the current culture?

I think the answer is everyone, but it needs to be led from the top. The most successful change initiatives I’ve been part of have been based on cross-functional teams demonstrating a range of transformations and building the rationale and momentum for change. Never underestimate the squeaky wheel as a catalyst for change.

I’ve always maintained that the culture of an organisation is the behaviour of it’s leadership. Consciously or unconsciously leaders model what is expected - and accepted - in the so doing set out the culture of the organisation.

Change requires space - it’s very hard for people to participate in change initiatives if they are working flat out all day. The key is to allow people the time, space and license to figure out what a digital culture means to them.You can support that through coaching, mentoring, education workshops and setting out some time ring-fenced for change & innovation.

What are the benefits and potential challenges which an organisation might face when embedding a digital culture?

Each organisation is different and working out what embedding a digital culture might mean for your organisation can take some time. Benefits I’ve seen realised relate to improved efficiency, faster decision making, improved customer experience, being able to reach new markets and of course improving profitability/service delivery.

The main challenges I’ve seen have included resistance to change, lack of understanding of the need for change (these two often go hand in hand), not having the right people around the table, not collecting the right data to inform decisions as you go and the cost & complexity of integrating with legacy systems & processes.

Sometimes organisations are presented with so many different options that they simply don’t know where to start. In that case starting with the squeaky wheel and building some momentum is a good place to look first.

What strategies are available to change/challenge the existing culture within an organisation?

In my experience the most successful strategy for change is based on leadership - selling the vision of the future and helping people to see themselves in that future. It’s about creating enthusiasm and energy for change - seeing the opportunity and embracing uncertainty. That way everyone takes a stake and ownership in the change and rallies towards a common goal(s).

The second approach is centred around management; redefining roles, measures and control systems creates a way for people to make the transition from today to the future in a relative ‘safe’ and easy to understand way.

The last - and least effective - approach is around control. Using coercion and disincentives as a last resort, if the first two approaches fail. In my experience the control approach is really a stop gap and often is simply an off ramp for people who don’t want to or can’t make the change with the organisation.

Will we all be replaced by machines?

Machines have been replacing humans for decades - you only need to walk through a car manufacturing plant to see how many robots already carry out tasks previously done by factory workers. It’s not a case of whether this trend will continue but rather how rapidly it will accelerate in the coming decade, enabled by machine learning, algorithms and artificial intelligence.

To date the focus for machines has been around increased efficiency and decreasing error or defect rates, the next stage is for machines to move into jobs that require more than just precision automation and repetition.

Machines will definitely change the nature of many jobs but I think in many cases they will augment - rather than replace - them. The usage of machines will create the opportunity for workers to focus on different, potentially more valuable, activities. For example, ATMs have been around for about 50 years but during that time the number of bank tellers has actually risen slightly - the nature of what they did changed when ATMs were introduced.

I think the introduction of more and more machines will change how we think about jobs and what a job in the future will look like.

Which technology do you think will make the biggest difference, why and how?

That’s a really tough one to call. I think my top three would be autonomous vehicles, artificial intelligence and wearables. I think all three will significantly change the way we live our lives within the next 5 years but different industries and geographies will adopt the technology differently.

For me the major disruptor continues to be Moore’s Law. The relentless improvement in price, performance, size and power utilization of computing power that Gordon Moore predicted back in the 1960’s is in my mind still the uber disruptor. Who knows what is just around the corner as a result of this relentless march of technology progress.

Digital culture is about being able to adopt and leverage technology developments are they become available and maximise their value to your customers and organisation.

What’s the secret to successful high performing teams? What is the ideal team makeup in terms of roles and size?

I’m an advocate of product teams that fit the ‘two pizza’ rule - the permanent team size should be no bigger than you can feed with 2 pizzas. The team should include cross-functional team members who can take a product or service from inception to production - albeit sometimes they might need some external help or input. If possible each team should publish a clear set of interfaces/APIs so that other teams can integrate with their product easily.

Team members should all align behind a shared vision and set of goals.and in my experience visual management tools such as Scrum, Kanban or similar work really well in this type of team dynamic.

That’s the desired state - it’s not always possible to start out that way (especially if you have legacy systems) - and it may be a matter of working progressively towards that team structure.

Inter-team communication is vital - frequent information sharing sessions and demonstrations keep teams connected and foster innovation/fresh thinking.

Hopefully you found this an interesting read - if you have any burning question then fire them at me and I’ll do my best to answer them based on experiences.