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.

Building in organisational adaptability

The way in which most businesses organise for value has a fundamental 20th century mass production design flaw. It constrains them from reaching both the capacity and capability to respond to the market at the speed our digital world demands.

It is specialisation.

Specialisation made a great deal of sense in a mass production world - enshrined in Adam Smith's pin factory, through Henry Ford's Model T and beyond.
But it presents a problem of friction for the modern, responsive organisation.

For example - if you have wonderful developers in one silo, and wonderful business leaders in another, you introduce a brake on responsiveness.
While you may have optimised your tech teams to develop, and your business teams to come up with ideas to value, in order to accelerate the generation of value these 'roles' should be more closely connected (as we see in Agile, Design Thinking, Lean Start-up, Holocracy and combinations thereof).
Specialisation made sense when neither party could easily access the skills of the other.

That has changed. Technology now enables business ideation. Technologies that enable one-to-one marketing, for example, can inspire businesses to ideate on the new models this supports. But the friction comes when tech delivery capacity and capability remain a bottleneck.

Those choke-points all too often force businesses back to 'as usual' when striving for new.
What is required is a way of giving business people technology skills and technology people business skills. In this way the organisation becomes more responsive to upturns and dips in  the requirement for both. It becomes built to adapt.

Pipe dream? Hardly - there are already many no-to-low code platforms and technologies which enable pretty much anyone with a laptop to develop their own applications and business process automation with nothing more than the lightest layer of additional coding*.
Business folk can be technology folk, too. At low cost. Minimum Viable Products can be crafted by the people with the vision and the insight - closing the strategy gap through direct and hands-on involvement.

And this cuts both ways. By applying managed innovation as a way of working (Agile, Design Thinking et al) Technology folk can become as enabled to access insight, set vision
and focus on value as their business colleagues.

Bringing both no-to-low code platforms and insight-led, human-centred managed innovation into your org, is a huge leap toward becoming a truly responsive organisation.

*I do not dismiss the importance of technologists. Even the best of these platforms 1. Had to be coded in the first place 2. Create their biggest bang for buck when some customisation is applied.

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