Achieving Success Amid Disruptive Change
A New Paradigm Shift
The always on generation. This creates some interesting problems for companies. Legacy systems were not always set up to deliver across multiple platforms instantly. These new demands for services are causing “digital disruption” that introduces change. Management are being exposed to new ideas like Cloud computing, the Internet of things, computing everywhere, data analytics and big data. The mobilization of people through things like wearable technologies adds a new wrinkle. The barrier to entry in many industries is much lower than it was. Technology is much faster, more accessible and significantly cheaper. There are more qualified people than ever to come up with new products and deliver the changes. Physical market barriers are being removed constantly. New players don’t have the legacy system issues and are solely product focused. Companies are increasingly being put under pressure as new players come into the market. Examples of this are pharmacies becoming wellness centers, Google, Apple and others are becoming the conduit for making payments which traditionally can be 25% of a financial firm’s revenue stream. It took Alibaba less than a year to become China’s largest seller of money market funds. Amazon are offering 2 hour delivery in some markets. Clearly responding to these changes will take more than just becoming more digital.
There are many paradigm shifts that companies have to deal with. There is more of a customer focus than ever before. Even when companies deliver on their promise, less than 30% of customers are brand loyal. This requires that companies update, renew and re-invent their product and services, almost on the fly. With the availability of so much information there is increased risk and a much higher level of transparency. This is going to require improved communication and understanding of the mission, better tracking and analysis and an almost “live” view of the strategic roadmap or road ahead. Companies are going to have to ask, “Are we creating new things or just doing the past a little better?”
Are We Being Left Behind?
We see many new roles such as the data scientist, chief acceleration/velocity officer, and chief digital officer. How should we react to these roles? Should we react to them? To remain relevant IT needs to be a driving force behind changes within the organization. IT needs to be responsive and not be an inhibitor to organizations reaching their goals. This represents some major challenges for IT. While it's easy to discuss and change your strategy is not as easy to be a lightning speed producer of the solution
Utility Versus Strategic
Utility (think of these as “Production Systems” or keep the lights on). Once things are in “Production”, we can follow the traditional paradigm that works well in many organizations. We know the functionality and if something breaks, fixing it with the analysis-design-codetest-deploy method works. While supportive in nature they are necessary. They will be things like payroll, HR, email etc. They are often back office systems and are often off the shelf and / or Saas solutions. Very often there is a strong focus on cost reduction and efficiency in these areas.
Strategic (think of this as new development; and this is a creative “design” effort that cannot be lumped with the above). We don’t know what we don’t know, and discover as we go along, so cross-capability and cross-functional collaboration is key. These are your differentiation systems that are critical to running the business. Amazons’ distribution model is an example. This is the work that gives you an advantage. Often the response to this work needs to be immediate.
|Typical Companies DO HAVE||Most Companies DO NOT HAVE|
This will consume your best people and may be managed in a different way to increase speed to market. Strategic work could be further split by separating R&D which has a unique lifecycle of its own. These small percentage of projects will provide future advantage. There is also a very high failure rate in these. Not all R&D will be winners and it is critical that these be cut as early as possible. One has to remember that what is strategy today may become utility tomorrow. Another paradigm is that we developed products and continue to leverage them for as long as possible. The high rate of change and the massive availability of information will force this line of thinking to change. Those that ignore it will open the door to competitors. Strong consideration should be given to separating the two work streams both on a management and funding basis. You strategic projects need different cost models, justification models and may even be replaced on a regular basis.
Are We Delivering the Correct Things?
Creating a repeatable and achievable process around the company roadmap for supporting and achieving the company strategy has long been a problem for organizations. This has to work for both utility and strategic change. Clearly communicating and getting teams to deliver the required changes takes a skill set and agreed and repeatable processes that most organizations do not do well. Between multitasking and operational responsibilities it is hard to focus and govern these roadmaps. There are many moving pieces and hidden dependencies. Business value is not always delivered by a single project and in most cases it takes a group of initiatives to deliver value.
There are a number of considerations when we look at whether we are delivering on what we promised. Elizabeth Dotty from Harvard raised the following points:
- Make realistic Commitments
- Track key commitments
- Connect the dots – dependencies versus your own sphere of influence
- Follow a process don’t rely on heroics
- Knowing what you inherited – past commitments
- Know the contradictions around what was committed
Most organizations are not set up to develop these. Companies like RCG can be very useful in establishing these disciplines within an organization. We have well defined, battle tested approaches that can help define the key objectives, review current and future state. Force ranking the work is critical. Not all products can be priority one. The roadmap needs to be a continuous process with changing needs and priorities taken into account and appropriate actions taken.
- Be predictive and responsive
- Create a value focused culture in your delivery organizations
- Split your work into utility and strategic categories to help focus and delivery
- Be clear with your direction
- Have a solid approach for both strategic and utility. Don’t rely on heroics.