I’ve worked in the technology field for more than 20 years across a wide variety of development, architecture, leadership, and change management roles. In my career, I’ve seen significant change in every expectation around technology creation. End customers demand more refined experiences, workflows perfectly suited to their individual needs, and learning curves measured in seconds rather than days. Technology buyers expect solutions nearly out of the box, eschewing long configuration and customization periods in favor of easily integrated point solutions. Technology builders have access to thousands of tools and components that enable in moments what used to take months of custom coding to provide.
Operations involve account management of a cloud provider hosting hundreds of immutable instances rather than fixing individual servers. Deployment means monitoring a pipeline operation rather than an all-weekend manual process of moving files and updating configuration. Funders expect results in weeks rather than quarters or years. None of these stakeholders has any appetite or tolerance for defects or other poor quality, and security incidents can damage brands and careers in moments.
In theory, all these demands can be routinely met through the increased capability provided by modern technology methods. Businesses rely completely on digital capabilities in every aspect of their operations. Technology creators have several well-proven frameworks for identifying, funding, creating, and validating technology. Operations groups, where they are still separate from development groups, have access to automation capabilities for every aspect of their responsibilities, and capabilities for managing cloud infrastructure improve daily.
However, a great number of companies are incapable of taking advantage of these capabilities. Somehow, technology projects are taking longer, demonstrating lower quality, and increasing stress on workers, leaders, and customers. Why? Fundamentally, our existing management and operational habits prevent us from benefiting from the intersection of these innovations.
Every new expectation and innovation-driven opportunity requires companies to work together across historical silos. These collaborations can’t be addressed with traditional organizational processes; they require rapidly changing, highly dynamic collaborations that cannot be easily represented on an org chart. They need to bypass existing approval and communication pathways to operate at the required speed; this places incredible stress on the company’s control and monitoring processes.
This difficult transition is not unexpected. Socioeconomic scholar Carlota Perez identified five historic technological ages that drove massive change at every level of society. The means of production changed, changing dominant business models, sources and application of capital, types of required infrastructure, skills across the workforce, organizational shapes required to deliver against the promise of the new technology, and management models required to operate those businesses. The current transition into the age of software and digital technologies is well into its turning period, with the associated disruption and stress placed on any company with its roots in the previous age.
Quite simply, those companies are trying to exist and thrive in the new age while using operating models from the previous age. This is the real context of digital transformation. It isn’t about using digital technology to implement existing models or creating digital-enabled models that complement existing businesses. Companies must completely change their shape, mindset, and engagement model to meet the expectations of the new age.
Unfortunately, proponents of various technologies, methodologies, and products often use the new expectations as a scare tactic to drive change. It is better viewed as a huge opportunity for companies to serve their customers in a fundamentally more satisfying way, improve the lives of their employees and vendors, and capture greater market share as the digital age transitions from the turning point to the deployment period. Fear-driven tactics for change often result in successive layers of duct tape and Band-Aids, resulting in an ever-more convoluted company. The combination of accepting reality and choosing to aspire to greatness enables alignment around a simpler, cleaner organizational model, and it’s one of the most important tools of creating a future-state organization capable of performing in the digital age.
Fear tactics aren’t required. In the words of Tasktop CEO Mik Kersten, “The problem is not with our organizations realizing that they need to transform; the problem is that organizations are using managerial frameworks and infrastructure models from past revolutions to manage their businesses in this one.” The focus on aspiration and openness to significant change creates the potential to evolve and practice new frameworks and models. This practice brings the people along, engaging employees, leaders at every level, and even vendors in activities that will shape the future. With nurturing, this practice creates a culture that is purpose-aligned, customer-centric, decision-empowered, and actively transparent. In short, it mobilizes the entire company to behave differently. It is transformative.
Digital Age Company Characteristics
There are a handful of behaviors and characteristics that can dramatically accelerate change if they are embedded in leadership’s culture and mindset. The first three are internally focused (how the company is led); the next four are externally focused (what customers experience):
Align to customer purpose; enable action. Leadership focuses on providing clarity of purpose and ensures that purpose is completely centered around customers and their needs. Leaders then encourage and permit significant latitude in how to achieve that purpose at every level of the company.
Invest in outcomes, not efforts. Investment is aligned to those purposes rather than the projects and work required to achieve goals. This creates significant flexibility and permission to explore alternative approaches at the point where that flexibility has the greatest impact.
Release imposed control to gain steering control. Leaders practice letting go of old habits like directly controlling collaborations, backlogs, organizational structures, and fine-grained investment decisions. Instead, they learn to steer by funding to purpose, evolving purpose, and establishing lightweight guardrails.
Be responsive and connected to customers. Customers expect an ever-higher level of responsiveness and easy answers, and digital companies orient to provide that service however necessary. Cost of service is still a concern but is not permitted to damage the level of service.
Be honest and authentic with customers. The nature of the conversation changes, and the way a company shows up with its customers becomes a more dominant component of brand perception. This authenticity expands through the supply chain, requiring companies to care about what their customers care about.
Personalize to individuals. The age of one-size-fits-all software is over, and customers expect the capabilities they receive to be a great fit for their needs. They also expect to feel individually valued and respected by the companies from whom they choose to buy.
Prioritize buyer needs over seller products. The ease of new entry into markets requires companies to be constantly attentive to the problems their customers are actually buying solutions for, rather than focusing on what the company sells; otherwise, other companies will quickly discover that gap and exploit it.
The Change Journey
The transformation to a digital age company cannot be accomplished using methods from the old age. This is one of the hardest aspects of a successful digital transformation effort: it cannot be a project or initiative. It must be a focused journey of creating and sustaining new capabilities. The transition must be led and exemplified by the senior management, not delegated into any existing silo or role.
Companies attempt to decompose the change into a set of individual programs, leading to multiple parallel transformations. It isn’t uncommon to see a digital transformation, an Agile transformation, a DevOps transformation, and a customer experience transformation all running in parallel. This attempt to decompose change is reminiscent of the previous-age mindset of fixing different pieces of a machine with different specialists. Trying to change a company this way results in a tangled ball of yarn because of how interdependent all the efforts are. A digital age company is more like a living organism, requiring a holistic approach to training new behaviors, creating organizational health, and promoting structural flexibility. Be agile to be digital: set goals, experiment for impact, decentralize action, measure impact, and celebrate success.
In This Issue
In our first article, Matt Ganis introduces the core elements of digital, Agile, and DevOps individually. Regardless of individual experience with the concepts, this provides an important opportunity to reflect on the elements addressed throughout this issue: What does “digital” really mean to a company? What makes Agile different from what came before? What are the implications of DevOps and the speed it provides? The article highlights the degree of change required for various heavily impacted functions within the company and the impact of new behaviors that go against decades of habit.
Continuing the theme of understanding the impact of digital, Cristina Popescu and Danish Aziz introduce objectives and key results (OKRs), one of the core tools for creating alignment in times of intense change and anchoring the types of steering approaches capable of keeping up with the decision speed required to be effective in the digital age.
As a 20-year-old movement, Agile has picked up a number of misconceptions, offshoots, and antipatterns as the world has figured out how to make it effective in different environments. In our third piece, Jacek Chmiel examines potential biases and the impacts they have on how Agile and DevOps show up in our organizations, helping us reflect on how we might reimagine various aspects and break out of our old ways of thinking.
Overcoming existing biases and creating effective digital agility require putting energy into an incredibly broad range of change efforts across the company, impacting nearly every role. As leaders, we naturally focus on the exciting, high-impact areas, which unfortunately leads to blind spots around the boring, “un-fun” areas. In her article, Cheryl Crupi shares six hygiene factors that can be crippling if not addressed. The factors highlight the need for a holistic approach to agility that integrates elements of digital, Agile, DevOps, and many other modern practices for companies that want to be successful in the digital age.
Successful transformation requires organizations to structure and operate in new ways, which requires creating many new patterns for designing teams and their collaborations with other groups. Anna Wiedemann et al. close out the issue by introducing one example of an organizational structure tactic for enabling successful evolutionary change with a small group of development teams supported by a vendor-managed operations environment.
These articles were selected to challenge mindsets and prompt readers to inspect their existing beliefs from a variety of directions. As you read this issue of Cutter Business Technology Journal, let go of existing biases and assumptions about the concepts and listen for new insights. Reflect on your own behaviors and those of your organization, and seek opportunities to engage differently.