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Why digital transformations should be dead

  • Product
  • Business
  • Digital

Digital transformations don’t work.

Everyone wants to talk about digital-led businesses. Every business is a software business, even when they aren’t, people will tell you. But the focus on big bang, project managed, change agent-driven initiatives tend to leave sour tastes in the mouths of long-standing staff. Naive technologists or agilists or product people for that matter exacerbate this when they perform the business strategy equivalent of the ‘seagull’. Discontent frequently morphs into outright opposition, and emotion becomes the dominant decision-making force rather than observation and planning. Eventually, what good will the agent(s) had is exhausted, and they leave the business. Sometimes voluntarily, sometimes less so.

Thus ends the digital transformation — a practical exercise in how to win friends and influence people, speaking from experience.

The end goal was a digitally-led business, with a focus on experiences and the products that power them. The more I learn from others in the industry, the more I feel like this is still the right outcome. Is there a business out there today that doesn’t want the best for their customers? Is there a business that doesn’t want to shift their customers from high-cost channels to lower-cost channels, while at the same time improving the experience those customers have? Is there a business that doesn’t want to maximise the lifetime value of a customer in a way that is engaging and delightful? Even companies that might not have the words to describe this nirvana surely want that for their customers and their bottom lines regardless?

The core assumption.

The core assumption I’m making is this: Businesses want - and have always wanted - highly engaged, happy customers who pay more money for the goods and services that business provides, while at the same time reducing costs as much as they can.

The thing that differs then, is not the goal, but how we get there as a group. The big question businesses have then is not the what, but how. Is it a shift in the customer segment or vertical? Is it the pursuit of new markets in new ways while maintaining old markets and old styles? Or is it a digital transformation? How do you decide when it could be any of these, at any time and in any order?

These are the questions that every digital, agile, product, devops, rockstar ninja consultancy on the planet have solved they will say, breathlessly in the white paper you paid for with your email address. Some of the claims might even be true. I don’t believe in any of them. The majority of the movements I see in industry pros look to digital transformation as the next step for any business. The approach: Hire product owners and managers, or shift the ones you have out of the marketing department. Let them be the agents of change as surely they will rally the business around them in pursuit of the customer! Customer Obsession will carry the day! Last time someone took that approach with me, I was made redundant. From what I’ve seen such things end one of two ways. Either you force out the existing staff that built the business, or the agents of change don’t get the support or cut through they need, and they move on. Losing momentum is the most significant risk with a transformation. By definition, it has a beginning, middle and end. A transformation implies a shifting of the status quo, techies, product people, design and experience folk are hired into the business with a mandate to change the way the company has worked up until that point - because if you don’t change you don’t transform. Those newbies to the business have new ways of working, and the implication is that those new ways are inherently better or more suitable for the company than the old ways that we built the business on in the first place!

This attitude implies that the newbies are inherently better or more suited than the existing staff that built the company and a collision point arrives. These groups clash until one group wins, and one group loses. I haven’t seen a clash like that de-escalated successfully.

Why then is there such a focus on a transformation? Why are we doing to entire businesses what we now try to avoid doing with the software that we tell companies they need to be thinking about first? As an industry, we’ve been attempting to move away from big bang releases on a Friday afternoon. Why do we treat whole companies the same way now? If we can figure out how to de-risk deploying and releasing software, surely we can focus on doing something similar for businesses that want to participate in a digital-first world.

Think about integration, rather than transformation. Rather than seeking to supplant, subvert or replace, we should be looking to merge, join and integrate.

In tech we try to remove silos. Why stop there?

How many times have you seen a technology team working siloed, away from the rest of the business? The predominant practice used to be waterfall, where the teams hide down on another floor for the entire duration of the project, only coming back to show the business what they’ve done at the very end of the budgeted time. Agile and Scrum have advanced that, now we talk about what we’ve been building with our stakeholders every few weeks (two weeks being most common). That’s a great achievement compared with waterfall.

With this way of working being a next step on the journey, what comes after that? Once you’ve got mature teams experienced with this way of working, it can happen that the product owners, design team and other team members are doing regular customer research sessions. Staff process that data into insights and product improvements. Next, they build that feedback into their digital products. The new approach works up to a point.

Eventually, it becomes difficult to improve some aspects of the product because the tech team might only own the digital representation of that product. Take a bank for an example close to heart. Suppose you get some feedback in a user session that the fees charged on a product make it unattractive to the user. Your tech team is incentivised to fix problems with the digital product. Still, now you’re finding issues with the traditional representation of that product - you can take that feedback back to the bank, but you’ve just hit another silo.

We’ve come so far in building cross-functional technical teams and cross-functional software product teams. The next logical increment is the cross-functional business team. When you think about the time before ‘digital’ existed as a thing people wrote white papers about; you’re just describing a regular team as we’ve seen for most of the history of business.

You might find that this is not a case of digital eating the world, or technology changing the way we do things. Such statements are arrogant and misguided. The way we position the concept is that there is something inherently better about us and the rest of the business world is lacking. It’s like the scrawny new kid on the block hit the gym and got monstrously huge over summer and is now flexing nerd rage on the rest of their class.

We should not be seeking to replace the old world order of business; we should be augmenting it. We should not be trying to transform our lessers. We should be using our skills and technology to push the entire company forward.

A kinder, more empathetic way is needed.

Suppose we had a business team that consisted of a domain product owner, digital product owner, a couple of developers and testers, maybe an analyst, devops type person and designer. Or suppose we took an existing technical team and asked that the principal business stakeholder joined that team, co-located and contributed permanently.

That pesky fee that’s turning off your customers in digital and retail channels could be solved quickly. Whenever the digital folk were undertaking a significant software initiative, they would likely already have the backing of their crucial stakeholder. That stakeholder would already be up to speed. They would be the most prominent advocate for that team to the rest of the business. Through co-location, you eliminate a host of meetings and sync up sessions. Through a shared context, you ensure that the company is on the same page as the techies. Sprint reviews become about inspecting and adapting the backlog from a whole of business perspective, not just a technical or feature perspective. Is it more valuable to change the way the product works, or change the way we position the product on the website? Such comparisons of work become meaningful because we can find an answer, rather than being thrown out there and not picked up by anyone.

This approach is by no means a panacea. It is still hard work. The nominated business person and the team still need to learn how to work together. What might seem like an unbridgeable gulf in some places could be just a very very large chasm - bridgable but with effort. The rest of the business needs to back such an endeavour. Come from a place of equality, rather than superiority. Acknowledge that your colleagues paid for your ticket here rather than expressing surprise they haven’t choked on a peanut before now. You’ll have a much better chance of success, without resentment and without forcing anyone out of work.

What do you get for success with this, as opposed to a digital transformation? For one, you can unsubscribe from all of the consultancy mailing lists cluttering your inbox. More importantly, you’ve empowered a group of people with experience across the digital divide and set them loose on the toughest problems your business has. By working incrementally (rather than in a big bang project-driven way) you de-risk the effort. You can manage the pace and spend (reducing pressure on staff old and new, and pressure on the bottom line through less staff and hiring costs). You also ensure that all of your team are engaged and working in the same direction, not just the subset of staff who have the wind behind them.

This is just back to basics.

What’s ironic is that this way is the way all business began. There are no silos in an eight-person business. In a way, we’re just getting back to basics. There’s poetic symmetry in that somewhere.

If I owned a business, and it was my money and legacy on the line, I’d avoid a digital transformation like the plague. I’m not in that position though, so I’ll leave it to the reader to pick up the torch.