Why mice get to eat dinosaurs

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Many of us work for a reason. We have something we want to achieve. We want to make change, fix a problem, get stuff done. In the ideal scenario 100% of our efforts are focused on exactly that.

Funnily enough, that's also the reason for every business ever to start. Every start-up is a solution to a problem that someone stumbled on, woke up screaming about or otherwise identified a 'gap on the market'.

So why does it often feel like your ambition to get things done, to make things better, ends up being constrained by the very organisations that were meant to be configured to share in and scale your ability to make that difference?

It's an old conundrum - labelled variously Dis-economies of Scale, career politics, empire building, silo'd thinking etc. Whatever the name the result is immense waste, both for the businesses themselves and for the customers they aim to serve.

This waste gets formalised in structural inertia that constrains the organisation's ability to adapt.
And unless these are understood, acknowledged and a plan for responding to them is drawn up - well that inertia will keep things as they were, stalling the ability to compete.

Of course you don't need to worry if there are no new entrants to your market arriving without all those constraints. But if there are (there always are) then you must address them or try to compete with roughly half your capability and capacity to respond focused on dealing with internal drag instead of focused on meeting market need.

The start-up mentality comes without the brakes. It's little surprise therefore that in case after case the businesses that have succeeded since digital began (you know the examples off by heart by now) have been start-ups built on a different way of working. I'm not saying every start-up will out-compete every incumbent. I am saying that those that survive long enough to emerge to compete come without the inertia of incumbents and are instantly better positioned to perform better.

The inability or unwillingness to identify and deal with their inertia is also why it is so hard to point to a large scale incumbent business in any sector and claim they have pulled off a genuine transformation driven by digital. Orgs that were not born digital have to deal with a heap of internal inertia such as:

Resistance to:

• Ending old supplier relationships in order to establish new ones. Better the devil you know, right?
• Admitting you may have backed the wrong horse (eg ending investments you built the case for and/or supported in the past). I haven't got to where I am today without sticking to my guns, right?
• Moving monoliths of capability and capacity from old to new requirements. What do we do with all these mouths we always fed with the old, while we scramble towards where the market is actually headed?
• Cannibalising what you do with cheaper alternatives. But that hits my margins! (Sure, wait for someone to eat your business from outside instead then).
• Anything we aren't absolutely clear about, have little experience in, or isn't core to our strengths. We have no expertise in X. Hint - if it's new, nor does anyone else. The thing to be expert in is learning and responding at speed.
• New Data. Seriously - how many times have you heard 'we tried this before and it failed' when the whole landscape in which the plan was meant to operate has shifted? New guys don't have your hang-ups (or as you may prefer to call it in the boardroom, your 'corporate memory')
• Accepting that success in your old model is not what's required to succeed in the new. Proven leaders in the old are just the folk for the new, right?

All of these and several others lead to the most debilitating inertia of all - rabbit-in-headlights syndrome. This is the resistance to making a decision in time to jump.

Of course - not only must you be able to make a decision fast enough, you also need to know which way to jump. That's where real strategy plays, where you ditch the 4x4s to find the insight to really understand the landscape, your opponents, the direction of travel of change/market demand, the wisest places to attack and defend, and the challenges yourselves and your rivals face in implementing the tactics that attack or defence will require. And I've shared much on this in recent posts. (eg The Job Of Digital Strategy).

For today, let's focus on how we can remove some of this inertia.

Perhaps its worth taking some lessons from DevOps (and emerging DesOps). It seems odd to me that many incumbent organisations are taking up, or being sold on, the advantages of one or both to make things but rarely getting the hint that perhaps this is how they should be organising themselves to operate for value.

For example, high-level lessons from DevOps:

Measure: Localise accountability.

This requires the redistribution of the power to act - you can't ask for accountability without it. Flattened hierarchies are pretty much inevitable.

Speed: Get to “learn” as quickly as possible.

That demands some Scrum Mastery... driving the notion of server-leaders whose job is to support the makers on their mission, and remove obstacles. If the inertias are your obstacles then, game on. This one organisational focus could save it.

Responsive: Pivot on lessons quickly.

See above. Speed without the power/capacity/capability to respond is just a faster way to crash).

Automate: Use software to do more to help create and manage what can be automated.

See also the idea of Scrum Mastery - as in removing obstacles, accelerating pace, repeating what can be replicated (getting to nuts and bolts you can re-use vs making a new set of nuts and bolts for each piece of work).

Small chunks: Reduce risk through compartmentalisation.

This one large orgs really struggle with. Small teams working at speed, enjoying distributed power with the capacity and capability to act on their own decisions).

There is power in these basic tenets of DevOps, much of it writ-through agile approaches and all of it core to a new way of working.

But let's be clear, this requires a different way of working, different flows of capital, different distributions of power. These come as standard in start-ups. But unless and until you are able to match the freedom to move that a start-up is born with, you will be out-competed, as sure as mammals followed dinosaurs.

Creating new value - or simply keeping up?

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Demand for digital transformation is at an all time high - according to a survey of 600 leading execs for a DXC report: 2019: The year of digital decisions. It provides timely evidence that supports my mapping of the situation facing industry right now - referred to in detail here.

Referencing that article (The Job Of Digital Strategy Consulting): Companies are testing the water, feeling their way with agile here, lean there, new-tools-but-same-ways -of-working almost everywhere... There is no certain way of doing or being digital yet. Not by some distance. But we must expect that there will be movement in that direction.

What the increased demand/desire tells us is that digital transformation is headed toward ubiquity and with it standarisation and the need for interoperability. There's an increasing realisation that companies must build themselves a new future and this is at such scale that trying to do this with hand wrought nuts and bolts is too bespoke - too slow and too expensive.

What this also reminds us is that digital transformation is not the end product. It is a process of creating the nuts and bolts on which higher-order complexity - the novel stuff that creates greatest value - gets built.

When you have all the nuts and bolts, and power supplies and gears and pulleys and all those things you need to make stuff, it doesn't magically self-assemble. into things of value.

How you are able to use what you have brought together - the pile of 'what's' your grand 'why' of digital transformation may have provided you - that is where the magic happens.

The insight, the imagination, the ideation, the design, the rapid iteration, the testing and scaling - without these your digital investments are simply 'efficiency' spends. They won't even reduce your IT budgett. When we make stuff more efficiently we tend to use more of it (as Simon Wardley points out. Think how many more nuts and bolts got used as a result of standardising them.

What is needed is a way in which you can standardise and make repeatable the insight, the imagination, the ideation, the design, the rapid iteration, the testing and scaling. What is needed is a new way of working.

This is the 'How' of digital transformation and it is where the fight for market mastery gets won and lost.

In 2019 this is the most pressing challenge for creating new value vs simply keeping up.

How to make the extraordinary, normal

Digital strategy consulting has a simple task to carry out.  A little situational analysis reveals that the job of digital strategy consulting is to turn the extraordinary into the everyday.

When we fail to do this we force customers into a chasm of uncertainty which they resort to filling with often inappropriate products. They look for magic.

A look at this Wardley map of evolution, (below) applicable to most products or services, gives us a way of exploring the digital strategy landscape.

Digital is maturing from novel toward common along the Ubiquity axis.  We will return to how far it has actually moved along that axis to help explain the tensions we may otherwise miss. But what we can be certain of is that demand is increasing and that means the movement is toward Common.

On the Certainty axis it is harder to see movement away from the Genesis zone. Companies are testing the water, feeling their way with agile here, lean there, new tools but same ways of working almost everywhere... There is no certain way of doing or being digital yet. Not by some distance.

Strategy is on the whole built from experiment. And while productisation is a mantra within most consulting houses, the reality is customisation built upon rapid-iteration experiments. Making those rapid iteration cycles more effective is state of the art in digital strategy right now. And that's because certainty remains low.

To summarise to this point: There is a greater demand for ubiquity than there is market capability to productise its response. Referring to the map below, it feels to me like we are high enough up the Ubiquity axes for products to be the norm, but on the Certainty axis, we have hardly got out of Genesis.

From Simon Wardley: via https://blog.gardeviance.org

Understanding this situation helps us better plan our response. My (badly drawn) map below illustrates both where it feels to me we are (X), and offers a response to what the evolutionary drivers suggest is the direction our customers will want us to take. Note, the product and custom boxes have contorted offering a much larger overlap than ordinarily expected (compared to the original, above). This is my take on responding to the distortion of current high demand vs current low supply.

X marks where we are now - market trend indicates the direction of evolution we must respond to 

It suggests that we have to respond with products which help take our customers further along the Certainty axis. 
To do this we should offer and embrace

• A clear role for digital consulting - Responding to the need of moving the customer to greater certainty, enabling them to take advantage of genuine productisation as it emerges (essential to the value-building activities of creating higher-order outputs - just as custom nuts and bolts enabled the building of higher order products customers could actually use and value).
• Hybrids of custom build and productisation (applicable to each nut and bolt - eg managed innovation, human insight-centred design, customer experience design, product lifecycle, eco-system build etc)
• Greatest customisation where the customer has least certainty.
• Active strategy teams combining diverse cultures; disruptive creatives (Wardley's Pioneers who will create the new) alongside those who will grow the market (Wardley's Settlers). 

That's just a start list. But it is at least one against which we can start a sensible discussion about what we supply versus what the customer needs, and, as always, I welcome your builds.

For more on Warldey Mapping start here: https://en.wikipedia.org/wiki/Wardley_map

The strategic importance of managed innovation in digital transformation

A couple of thoughts in visual form on the strategic importance of managed innovation in digital transformation - and the behaviours required of the people involved:

First - the strategic importance:

Second - the behaviours