You’ve recognized the need to transform your organization. You have agile practices evolving and a target technology architecture. You’re making the organization smarter with data and providing them self-service tools and practices. You’re establishing product management disciplines to listen to customer needs and bring new digital products to market. You are also balancing product development with a balanced portfolio of operations-, compliance-, and research-driven initiatives.
If it took you several hours to read through this book, it’s going to take you a lot longer to implement these changes in your organization. It’s not an easy transformation, and I’ve seen some organizations adapt in under six months, while others took longer than 18. It largely depends on the culture that you’re working with and how quickly leaders and managers are willing to leave sacred cows behind and adopt new practices. In my experience, company culture is the most overwhelming factor in getting these practices instituted. The size of organizations, the number of geographic locations, the disparity in businesses and products, and the magnitude of legacy systems are all factors but secondary to cultural issues.
If you ask any executive whether he wants to be an agile organization, then the answer is going to be yes. Who wants to be slow and rigid? Ask the same executive whether he would rather see a stable technology architecture that can be used to drive winning customer experiences and share data ubiquitously. No doubt.
Do you want to build new products that grow revenue? Of course! Do you want a process to track investments and enable the organization to share their best ideas? Of course, you do. Do you want products that delight customers and grow market share?
When you ask questions like this, you’re going to get a lot of head nodding and support. These are simple expectations that any executive wants and expects for the organization to grow. For organizations that want to compete in a digital world, this all comes down to two simple attributes that organizations need to target.
Digital organizations need to be both smarter and faster.
You see successful startups that might have a natural edge going faster but must work really hard to be smarter in order to outfox larger competitors and to bring on early customers. You see some enterprises that have all the data and practices to be smarter but may not have the culture, leadership, communications, or practices to move faster and pivot to beat out new competitors. Being digital requires organizations large and small, old and new, in entrenched markets or defining new ones in order to be smarter and faster.
You can also see that being smart but not fast doesn’t work and that being fast but not smart also has its limitations. That’s one reason being digital is so hard for many organizations as it requires a balanced approach to becoming smarter and faster in mutually beneficial ways.
You can build products really fast but target the wrong customer segment and deliver a poor-quality experience. You can be overly methodical and scientific and therefore slow and miss a market opportunity. You can be extraordinarily smart finding insights in your ERP and CRM data but have no practices to action them fast enough.
Other attributes companies pursue are by-products of smarter and faster. Companies that are more automated and efficient are both smarter and faster. Higher quality, better user experiences, and higher levels of security are smarter ways to engage and service customers. Innovative companies that attract top talent and have modernized workplace technologies and policies can be both smarter and faster.
Becoming smarter and faster is what truly differentiates digital organizations from their peers. They empower employees with data to make smarter and faster decisions. They invest in platforms so that they can bring new capabilities to bear faster. They leverage agile to be smarter and faster in reacting to customer feedback and market conditions. They experiment bringing minimally viable products to market faster and then are smarter to react to prospect and customer needs. These leaders also recognize that bringing new competitive digital capabilities to market is required to ward off competition, to grow, and to become more profitable.
Figure 7-1 shows this at a more detailed level. How do you explain to the organization why agile practices, technology practices, portfolio management, data practices and product management enable the organization to be smarter and faster?
Now that you understand the basics of digital, one of your primary objectives is to find other leaders that will align with you on becoming smarter and faster. You can’t take on this transformational challenge alone, and eventually you’ll need to get the whole organization on board. In my experience, change starts by finding the early adopters—the ones that “get it” right away and who are willing to partner with you on approaches and practices.
Figure 7-1. How driving digital practices enable a smarter-faster organization
You will certainly need at least a couple of supporters from the executive leadership team and ideally the CEO or business GM as an active sponsor. However, you will also need to identify early adopters that will be strong participants or leaders within the transformation program. It helps to get technologists on board with agile, sales operators involved in your citizen’s data science program, and financial analysts participating in your portfolio management programs.
When you think about bringing early adopters on board, you should think about their personal goals and mission. Let’s break this into three categories of whom you will be pitching and how you will have to position the transformation program to them.
Board and CEO—What’s the vision, and how will these practices help transform the business? Where and when will new revenue and cost efficiencies materialize? Who will be new target customer segments, who are competitors in these spaces, and how is the corporation going to develop a winning program?
Executive team—How does the transformational program enable me to achieve my goals and objectives?
Managers and employees—How can I get my job done faster, smarter, and with less stress? What skills will I pick up along the way, and what incentives are there for my accomplishments?
I know, it’s a lot to swallow. In addition to just getting the mechanics of the processes instituted, you now need a strategy on how to communicate and sell this program across the organization. Individuals have different motivating factors and constraints, so you’re not going to be able to do this with a one-size-fits-all approach.
How do you identify potential early adopters? They have to be willing to participate with little considerations for how it will personally benefit them. They need to have good listening skills and be willing to learn but also know how and when it is time to lead, contribute, and question. Ideally they should be good communicators and educators so that they can help sell your practices and bring others on board. They should show a willingness to take some risk and work harder. They should be somewhat dissatisfied with the status quo and show a yearning to do more, smarter, and faster.
In the early days of transformation, you must be very strategic about whom you bring on, what practices you focus on, and what you lay out as both a vision and short-term goals. In my experience, this can be different depending on business needs, company culture, skills available, barriers to becoming digital, competitive threats, and alignment or conflicts with existing practices. If the organization already practices agile, then maybe all it needs is an upgrade in specific practices. If the greatest threat to the organization is new products from startups, then maybe the organization needs a product management practice and nimble technologies to test some competitive offerings. If the organization is entrenched in legacy practices and has limited funds to invest, then becoming more data driven and enabling portfolio management practices may help find efficiencies.
So let’s look at an example. Let’s say you’re instituting agile practices to help bring new digital products to market. Who are your early adopters, and how can you use the smarter-faster framework to get them on board?
Agile is democratic process, and it’s most important to get the team on board. Sell them on both smarter and faster as they will less likely be distracted and have better short-term requirements when business users are asked to prioritize and define acceptance criteria every sprint. You’re going to need the product owner on board with a process that enables adjusting priorities and delivering an MVP to market sooner. If sales is the primary stakeholder, I would pick out some key salespeople who have valuable input on the product and sell them on the same vision. To the CEO and Board, I would sell them on a process that can be driven by customer needs, that will become more predictable as the team matures the practice, and that ultimately will help execute on a roadmap of growing products.
Driving digital requires you to make some concrete, focused decisions about people and practices that you target and demonstrate a strong alignment to business priority. Take on too many people too quickly or attempt to impact too many practices, and you increase the likelihood of burning out participants or failing completely. Investing in practices too far ahead or outside of business needs, and you’re likely to lose strategic support if short-term business priorities are compromised or if participants push back when they fail to see the alignment.
Going too slow can also be very detrimental. It can lead to business failure and disruptions to entire industries. To see this, let’s look at what happened to the newspaper industry.
The internet started to go mainstream in 1995.1 Some newspapers responded early to this “new media,” as it was called then, by finding ways to develop websites and push their content online. I know this because AdOne, the startup I joined in 1996 offered newspapers an SaaS solution for hosting and searching classified ads. By 1999, 11 newspaper companies had invested in AdOne,2 and we had a majority of their newspapers participating in at least one of our products.
But just enabling newspaper readers to search ads online was not sufficient once digital disruptors emerged. By 1997, eBay had hosted 2 million auctions.3 In May 1999, Monster.com4 was serving 42,000 clients, listing 204,000 jobs, holding more than 1.3 million active resumes, and recording 7.6 million “hits” per month. By 2001, Craigslist5 was in at least 10 major U.S. markets. So, while newspaper revenue increased in the booming late 1990s, they came to a crashing halt 2001–2009 once the Internet bubble burst in 2001 and digital disruptors changed the business model to low-cost digital listings that enabled buyer and seller marketplaces. The Newspaper Association of America shows the impact to newspaper advertising revenue6 falling by approximately 70% over the last ten years.
As I see it, newspapers had a three- to five-year window to enable digital transformation. By 2001, they needed to be willing to cannibalize their print revenue and move aggressively into digital businesses with competitive pricing and winning user experiences.
If other industries follow the path that newspapers did, then they have this three- to five-year period to execute their digital transformations. This implies that maturing many of the practices I outlined in this book should occur over the first one or two years. Now that may sound like a long time, but people and organizations move slow when making foundational changes to practices, values, missions, and goals. So, while you should adjust to the pace of the organization, your job as digital leader is to drive them smarter and faster because you may not have the luxury of time.
Many but not all your leaders will want to be smarter and faster. Some executives still try to keep decision making at the top and would rather see an organization of followers. They prefer to use their instincts and gut to make decisions and are overwhelmed when too much data is presented to them. Some are comfortable with the pace of today’s operations and are not overly interested in the challenges to make things faster or more efficient. Some are conservative business decision makers and risk averse, so practice changes, product development, and the need to transform are not things they will easily embrace. Some expect to leave the organization or retire before transformations materialize and have no interest in rocking the boat, learning, or taking any personal risks. Some will just not have the skills to perform in a digital world and will make it difficult to transition from existing practices and tools.
The other barrier worth calling out is that the company’s incentive plans will need adjustments to gain the support of middle and later adopters. This is especially the case when compensation has a significant variable component that is performance based and likely aligned to the legacy business model and operations. An advertisement salesperson commissioned 10% for $100,000 print display ads isn’t going to be on board selling $5,000 digital banner ads at the same percentage if the effort involved in closing the sale is equivalent.
It’s important to recognize who and why individuals are resistant to change, but in my experience, their actions are what you will witness first. You’ll need to be able to recognize the patterns of these actions and have approaches to deal with them.
Some will listen, agree to the principles and practices that you are instituting, but elect not to get involved. They go back to doing things the old way and don’t challenge themselves to do things differently or pave the way for others to follow them. If their intentions are honest, then these people may be too busy to participate or are overly driven by goals or incentives aligned to the legacy business.
The best thing to do for these people, especially if they are critical to the success of the transformation, is to spell out exactly what you need them to do in small chunks. Hopefully by spelling things out, they’ll challenge you on any adjustments needed to make the plan successful and will find a way to execute it. If not, then they probably weren’t on board in the first place.
In the second type of reaction is the passive-aggressive group that listens, nods their heads, claims that they are on board, but has no intention of taking an active role. You can tell that they are passive-aggressive if you confront them and spell things out but then get a bunch of excuses from them. Some will avoid meeting you, skip group meetings, and find other reasons for not following through on commitments. The good news about passive-aggressive individuals is that they are unlikely to be confrontational and won’t battle your mission or goals openly. The bad news is when they hold positions of authority and their staff is not led by example or driven to participate in the transformation.
Your best option to bring along passive-aggressive leaders is to recruit others with positions of influence to play a role in getting the desired behaviors and actions. This may be someone on their staff, a peer that they trust, their boss, or a leader higher up in the organization. People on their staff should demonstrate where the transformation is bringing success. Use peers to expose where they may have dependencies and to provide some pressure to get involved. Use superiors when you need help getting a carrot and a stick to drive change.
Others still go beyond passive-aggressive behaviors and force you down paths that suck time and energy away from your important priorities. They’ll ask you to repeat things that you sold them on months ago. They’ll demand more explicit training for their staff but won’t dedicate the time required for them to learn new skills. Some will have you chase unnecessary details or force you to respond to a trickling stream of questions. They may ask for reports or metrics before you’re ready to measure or communicate them.
These behaviors can go from an annoyance to being confrontational very quickly. If the individual or group begins setting unrealistic expectations or ups the bar when you demonstrate some success, then they are, with or without realizing it, undermining the transformation.
This is a difficult situation, but I can offer a couple of suggestions. First, dramatically minimize your needs and expectations from these individuals. Be very specific on what’s needed from them, and keep the scope as confined as possible. When you do need them, make sure you have the request documented and detailed. Make these persons look good where possible. Most importantly—and this is contrary to many of the principles outlined in this book—you need to be careful on the level of information and details you share with them. Arming them with more information feeds the beast, and their response will likely be to ask more question, demand more details, and send you farther down a path of little return.
But the most difficult barrier is when someone buys into the vision but is antagonistic to the methodologies and practices you are driving. They may like the concepts of agile but want to run initiatives using waterfall plans. They want to build up digital talent but are driving for different sourcing strategies. They drive MVPs that are orders of magnitude greater than what’s necessary or feasible. They are perfectionists and elect to pick out flaws more often than compliment the team on the benefits of their deliverables. They hoard information and share it only in forums that challenge your authority.
These people are likely to be your colleagues and senior people in the organization. They may be on your steering committees or are key stakeholders in some of the initiatives. You can’t dismiss or ignore them.
Every transformation program that I’ve led or participated in has one or more people exhibiting these behaviors from time to time. Leaders like yourself, entrusted to drive an organization through transformation, wield great power and authority, so it’s natural that other leaders will be envious and want a piece of the action. Your colleagues have had success leading and managing change, driving initiatives, developing KPIs, or developing products and want influence and some control of business methodologies and future practices. They want to own a bigger piece of the program.
You might have a few things working against you. You might have been hired to run the transformation program and have to work with colleagues who mistrust outsiders. You might be a CIO, CTO, or technology leader working with leaders who prefer the “old” IT that were stewards to the business need and not entrusted to lead the business. You might be a woman working on a male-dominated leadership team, or you might be a decade or more younger that your colleagues. These are all potential areas for your colleagues to either distrust, challenge, or exploit you to get more power and control.
This is why it’s all too important that the CEO participate in enterprise-wide transformational initiatives and that General Managers or Presidents oversee individual business transformations. One of the primary roles these leaders need to own is setting roles and responsibilities and resolving leadership conflicts. These challenges can’t be sorted out up front as new issues will emerge and flare up as leaders get involved, feel challenged, or possibly feel threatened by the transformation. The CEO, President, or GM needs to either recognize the conflicts, or you must take steps to expose them and get their involvement.
Make sure that not only the issue at hand is resolved but that some structure is identified and documented to provide clarity and used to avoid future confrontations. Sometimes that’s clarity on roles, sometimes it may be who or how specific decisions are made, and sometimes it’s to reshape vision or scope. The point is that you can’t allow key organizational decisions to linger, and you can’t afford the time to revisit them.
We started this journey with the transformation imperative and why virtually all business need to reimagine their digital businesses. The practices laid out regarding agile, technology architecture, portfolio management, data science, and product management are all there to help you lead an organization and drive digital results smarter and faster.
As you move smarter and faster, you’ll start to see the world differently and through what I call the digital lens, shown in Figure 7-2.7 You’ll have the product management practices to better connect with customers and prospects on ways to make your products and services more convenient. You’ll be developing mature interfaces like web and mobile but also considering emerging interfaces like voice, wearables, and virtual reality in the upcoming years.
Figure 7-2. How smarter-faster organizations see the world through a digital lens
When the underlying capabilities of the organization require an upgrade, then you’ll no longer consider new technologies as large, risky, disruptive investments. You have portfolio practices to help sort out which investments and upgrades to prioritize and agile practices to bring new capabilities from pilot to production. You’ll be investing in your data architecture, so leveraging your data with the new frontier of data services like AI, blockchain, or IoT will no longer feel unattainable. You’ll also be able to see where your business’s assets can be used to provide your own data services or APIs to either provide benefits to your customers, enable new sales channels, or expand reach into new markets.
Once you are smarter and faster, the threats of new digitally native competitors and startups may feel less intimidating. You should be able to size up their strengths and weaknesses and find ways to either compete, cooperate, or partner with them.
Similarly, when new regulations emerge, a new security threat requires remediation, or you elect to provide customers more privacy options, the steps required should no longer feel insurmountable. You’ll have a more practical way to set a vision on what needs to be done and have more efficient ways to implement.
Finally, stronger practices and more reliable execution will enable business leaders to contemplate new business opportunities and models. Maybe there’s an opportunity to transition a group of services into a subscription with recurring revenue? Maybe crowdsourcing a process will enable you to collect new data that will be valuable to customers? Maybe you’ll have more time to explore partnerships?
Competitive threats, new opportunities, impacts of maturing technologies, and the need to provide increasing value to customers require leaders that can leverage the digital lens. They need confidence in the organization’s capabilities to go smarter and faster, which enables them to see the world through a lens of digital opportunities.
That is the meaning of driving digital.
