In the 1950s, the average tenure of an S&P 500 company was 60 years. Today it’s under 20 years, and the predictions are that it will be just 12 years a decade from now. These forecasts are scary. Worse, they are accompanied by the prevailing attitude that digital disruption is the root cause of these shorter life spans and something to be feared. But, it is important to remember that, as much as we might want to believe otherwise, no one can predict the future. No amount of data science or analytics can really tell us what will happen tomorrow, let alone 10 years from now.
Therefore, your future is in your hands. You can be the disruptor rather than the disrupted. All you have to do is view disruption as something to embrace rather than fear. All it takes is a disruptive mindset and courageous leadership to guide you through digital transformation. Let’s look at how.
Technology Transformation Challenges
Having led technology transformation efforts at EMC, Dell EMC, and now Cognizant, I’ve seen a recurring pattern, which I think applies equally no matter which industry you’re in. There are three main IT challenges that you need to address as part of your digital transformation journey:
- Maintenance of systems that keep the business running
- Innovation that enables you to adopt new technology for greater business value
- Re-imagining how you will delight users and customers and redefine your competitive advantage
As illustrated, these things all overlap and contribute in different ways to business value and revenue. The question then becomes how to balance these priorities, so your business can innovate fast enough to get ahead of the competition.
In terms of maintenance, consider on-premises, monolithic systems like ERP. The temptation might be to leave these undisturbed. However, if you want to achieve the level of agility needed to stay ahead of the pack, you need to deconstruct these legacy systems and migrate them to the cloud. Modernizing these resource-intensive, hardened systems will eventually release the time and resources you need to focus more on innovation and delighting customers.
Two significant barriers to achieving this are fear of failing fueled by so many stories of transformation disaster and the relentless pressure to meet other apparently more urgent business requirements. So, the seemingly huge task of modernizing legacy applications gets pushed to the back burner.
Unfortunately, the postponement of such modernization is like a production line manager repairing parts of 20-year-old machinery instead of investing in a new system. Ultimately, productivity lost because of maintenance downtime means less delivery of customer value. The same can be said of cobbling together small pieces of software to sit on top of a legacy system. If it’s even possible, digital innovation is slower and more expensive than it needs to be. Anyone who looks at this from a lean perspective would see the false economy of postponing such modernization.
Although digital transformation can be scary compared to the familiarity of repairing pieces of broken systems, it’s the cost-effective choice, especially if you want to stay ahead of the disruptors. So, how do you go about it? What does it look like?
The Anatomy of a Transformation Movement
Although successful transformation is about people, culture, and technology, I’m convinced that people are the most important piece of this jigsaw puzzle. After all, it’s people and their behaviors that change, not the organization per se. So, organizations must focus on people, skills, and change management requirements if their transformation efforts are to succeed.
In a digital world, although software is front and center of delivering new business models and experiences, software cannot magically create value. You need ideas from people at all levels of the business, bottom-up and top-down. You need the development skills to bring solutions into being. You need the insightful feedback from people affected, whether that’s users, managers, customers, or business partners. Here’s how it can break down.
Starting At the Top
From the top, leaders should provide a clear vision of where the transformation will take the company. That’s not to say transformation stops when it reaches a static destination. Rather, there have to be clear milestones along the path that people can buy into.
Leaders should also support the culture of experimentation and value the right things. Focusing on short-term return on investment kills permission to fail and with that goes the courage to experiment. Return on investment will come in due course, but at the early stage valuing lessons learned and adoption is far more important.
Where IT Fits
Just as the Toyota production system has transformed all kinds of manufacturing production line, application development and delivery teams need to embrace continuous improvement and remember that the end goal is delivery of value to customers.
Of course, agile and DevOps practices are focused on these objectives. However, the potential risks and rewards of digital innovation are so serious that, from my point of view, application development and delivery teams need to push the envelope if their companies are to disrupt. I see these teams embracing a whole range of approaches, including lean startup, extreme programming, test-driven development, and continuous delivery while ruthlessly eliminating waste.
No matter where individuals are in an organization, for digital transformation to be effective, they must realize they own the responsibility for their own transformation. Failing to learn and adapt makes individuals vulnerable to change. They need to be active participants in transformation. So, we all have a responsibility to seek out new skills that make us an asset to the company and be ready to adapt as silos come down and automation changes processes.
Above all else, everyone needs to become user- and customer-obsessed, placing the needs of those we serve at the center of everything we do. And, this takes courage.
The Rise of the Courageous Executive
The truth is many organizations are succeeding in their transformation efforts. Increasingly these programs are led by digitally savvy executives.They have the necessary engineering background to perceive the possibilities of technology change and embrace it with a better approach. Most of them are young and have come up through the ranks, but others are senior leaders who are flexible and amenable to dispensing with processes that are no longer relevant.
Courageous executives recognize that disruptive technology doesn’t arrive on your desk with a slick installer. More likely it appears on GitHub without fanfare or announcement. Courageous executives have the curiosity to seek it out, and the technical acumen to give it a try.
Courageous executives are continually learning and always looking for the next thing that might give their business a competitive advantage. They’re not afraid to roll up their sleeves and give things a try. These characteristics equip them to build high-performing technology teams with empathy, mutual respect, and accessibility contributing to a “we’re all in this together,” can-do attitude.
And that better way is to learn by doing.
Courageous executives know that you cannot simply bolt on new tools and methodology and expect attitudes and behavior to change magically. Therefore, they foster cultural change as part of their transformation programs, orchestrating bold changes to the workplace as part of this new spirit of experimentation.
In my own experience, open workplaces go a long way to fostering this cultural change. I’ve seen them promote the collaboration, level of access, and speed of decision-making needed to support digital transformation and its faster way of working. Certainly at Dell EMC, taking down the walls between development and IT operations helped us deconstruct the organizational silos that existed before. This really accelerated our adoption of DevOps.
Having said this, it’s important to have empathy. One size doesn’t fit all. So, listen to those who can’t always be creative in a world without walls. Be prepared to design quiet zones and work routines that give people a respite from extreme collaboration.
The Implications on Technology
Businesses often tell me that they need to own their technology stack because they’re wary of vendor lock-in and in case they need more flexibility. A case in point might be adopting open source Kubernetes for containerization rather than licensing an application platform that has containerization built in.
When I hear this, I start asking questions to understand why they are devoting their limited and precious resources to building out their own unique platform. What these questions frequently reveal, is something like this:
- We have 10 people focused on building our technology stack.
- We have three or four operators using the stack.
- During the past year, we didn’t replace any of the components or have a need to customize it.
In which case, my response is: Does this seem like uber-focus to you? Is this really helping you get to market quickly?
The reality is many IT departments are building their own platforms because they think they need that level of flexibility. But, there’s no real reason for that these days. The risk is that people are immersing themselves in this kind of work because they’re engineers and they enjoy the technical challenge. This too is a cultural thing that must change. It’s not helping the business. The unintended consequence is just a different kind of vendor lock-in.
When you build your own platform to avoid vendor lock-in, just be aware, five years from now you might wake up to find you’re the only customer, and the vendor is you.
Instead of worrying about the tech, in this age of disruption, IT has to be poised for innovation and devote everything it can to creating value for customers. And to do that, I have four recommendations for all of those with courage:
- Disrupt yourself. Dedicate time quarterly to identify weakness in your technology and strategy and try to exploit it. Once exposed, close those gaps before your competitors do.
- Focus on speed. Remove roadblocks and increase learning cycles. Enabling your team to deliver fast will increase customer feedback. Faster feedback accelerates learning so that you can adapt more quickly to market needs.
- Start small and iterate fast. Start with something small and iterate quickly. Relentlessly focus on minimum viable products, and then use that faster feedback rate to evolve them quickly. Some experiments will fail. You have to take that in your stride. Have confidence in the knowledge that failing fast delivers learning you can afford, whereas failing slowly is the road to ruin.
- Stay focused on customer adoption. Revenue follows customer adoption, but in early stage experiments, adoption is a far more important KPI. Begin with a meaningful customer journey so the value to the business will be obvious, then demonstrate success.
How Low-Code Can Help
For successful digital transformation, the courageous executive needs to choose a technology stack that allows fast development, is secure, and promotes open standards. Enabling faster time to market is the essential measure of success. In that context “Good enough” trumps the intellectual indulgence of developing your own stack. Technology is simply a means to an end.
Teams that are focused on innovation need the ability to start small, start fast, without having to wait for infrastructure support to provide multiple environments. The world is changing at such a speed, that you cannot afford to clutter every experiment with drawn-out discussions about infrastructure provision.
The future is so unpredictable, the further you plan ahead, the greater the risk that those plans will become redundant. Requirements change, some experiments will fail. So, you need to focus on the next three steps, not the next three hundred.
You need more of your resources to be focused on creating customer value, through fast iteration of build-measure-learn. Reducing the proportion of your resources that have to spend their time on technology management will help you rebalance the team in this way. That will give you the greatest chance of getting to market before your competitors.
Against these criteria, low-code ought to be part of your digital transformation toolkit. The right kind of low-code platform will give you the ability to create consistent brilliant digital experiences across mobile and web applications, and the ability to get to market fast.
More of your IT talent can be focused on meeting the needs of your customers and less on the engineering required to keep things running.