Why all this negativity, when technology - at least in theory - makes so much possible? It’s not necessarily that executives aren’t aware of the opportunities, or that they fear change itself. Over three-quarters of those surveyed by KPMG, for example, agreed growth depends on the ability to challenge business norms. The issue is a lack of confidence in the internal capacity to change; or in the enterprise’s ability to break out of a cycle of playing ‘catch-up’ with new technologies and more innovative competitors.
More than anything, in the 2020s competitiveness will be defined by the ability to anticipate and embrace change, rather than adapt to it after the fact - a core characteristic of the modern digital business (MDB).
By harnessing technology and undergoing an internal realignment, enterprises can position themselves to manage, even benefit from, the unpredictable. For any company still grappling with inertia or the sheer number of options on their doorstep, becoming a MDB might seem like a tall order. But a new year is all about new beginnings, and in this issue of Perspectives, ThoughtWorks experts who have been on the frontlines of multiple transformations introduce the building blocks that can be used to construct a modern digital business.
The mission: Bigger is not necessarily better
As contradictory as it may sound, one of the best initial moves executives can make is to stop thinking of transformation as by definition ‘big.’ The consistency with which transformations are painted as massively complex, ambitious undertakings convinces a lot of business leaders they have to attempt something spectacular - which can result in equally spectacular failures.
“If you’ve taken a ‘big bang’ approach, the first time you learn how adoption works is when you’re done,” says Ange Ferguson, ThoughtWorks Group Managing Director for Digital Transformation. “It’s very hard to adjust your product or your approach in order to increase adoption once you’ve actually finished the work.”
Gary O’Brien, ThoughtWorks Digital Fluency Principal, and co-author of the new book Digital Transformation Game Plan, puts responsibility for the persistently high rates of transformation failure - around 60-80%, by most estimates - on standardized consulting models that have prioritized cost savings over more foundational change.
“Organizations are sold a cookie-cutter approach to making (transformation) successful, but you can’t just take what another company has done and apply it to yourself,” he says.
Many consultancies, in O’Brien’s view, tend to push big bang approaches with little prior knowledge of the individual enterprise’s context and circumstances.
Sometimes, he says, “the only way for them to make money is to save you money immediately, and the best way to do that is to reorg. So you lose a whole bunch of talent that goes somewhere else, in a reorg based on what another company did, and end up in a state where you can’t change it.”
Another common fallacy, according to Ferguson, is seeing transformation as an end in itself. “People get really stuck on this idea of digital strategy and digital transformation, and sometimes it’s easy to forget that it’s in service of something larger - business strategy, business transformation and ultimately, delivering value to the customer.”
This involves thinking less about what transformation requires and more about what the organization needs - or as Ferguson puts it, the capabilities necessary “to respond at speed, to be able to experiment, to take advantage of all the opportunities that technology brings you, and to deliver on your business goals.”
Since every enterprise defines its own goals and is dealing with a different set of internal and external dynamics, the capabilities it has to develop will inevitably be, to at least some extent, unique. That means, as O’Brien puts it, instead of trying desperately to become the next Netflix, each company needs to find its “authentic digital self.”
“Assessment is important, but context is key,” he says. “Having context on your industry, strategy, competitive position, what’s going on in the world - that’s what’s important to actually work out how far down this digital road you need to go. A very small step is all some organizations need.”
Rather than broad, sweeping, change, the enterprise can start with a ‘thin slice’ - a tactical, targeted initiative that address a single process or capability that needs to be enhanced - but that also cuts ‘deep’ in that it has consequences for every layer of the organization, from senior executives down to developers.