I’ve recently discovered McKinsey podcast and it was just great to hear other people just describe what I do with my teams 🙂 in these early-days episodes:
The 4 capabilities for digital transformation are exactly what I’ve seen being well done or missing in so many client environments:
- Robust but fast decision making on bold decision eg. How much to invest in digital / when
- Connected business system to link product go to market and technology
- Radical cost reduction by removing processes with digital technology for faster go to market at higher quality or lower cost
- 2-speed IT architecture – which is exactly what Gartner explains in their illustration of bimodal IT with Sprinter and Runner analogy
As an advocate of cross-functional teams and journey-based work, it was music to me to hear that such journey-based (cross functional) teams focusing on digitizing the core business have to be set up by CEO.
And as a firm believer in service marketing as differentiator in customer experience and a value driver (see Apple’s latest results showing their 31% growth in services revenue in Q3 2018, leading to them becoming a $1 Trillion company) it was also interesting to see the examples of companies moving from product sales to service based. This requires different and big changes in business models and operations. I feel the magnitude of this shift is often mis-understood or underestimated even by the biggest advocates of such services in client organisations.
Like the authors say regarding the 2 dimension of identifying new frontiers of value (journey-based teams and service-based approach):
“if it’s a whole new business model based on the core, that is going to require separate funding, possibly a separate organization that will need to be insulated from all the traditional overhead, policies, things that hamper the legacy business.”
Then, as you think about your consumer journey, this episode on the importance of consideration (not just awareness) for brand growth is full of research and useful stats
Complete this with the well-put episode on principles and pitfalls of agile (really liked the facts that the authors emphasize the importance of embracing all the principles of agile rather than “cherry picking” the convenient ones)
“the beautiful things about these principles of Agile is you need to think of them in a holistic way. You can’t just cherry pick a few of them. “
“the things I typically see that they cherry pick are that they do the easy stuff, they get a few people and anoint them scrum masters. But what they don’t want to do, is they don’t want to have autonomous teams. They don’t want to let go. This is hard.“
This is what Ideo describes as “Theatre of innovation”, how design thinking can be used as a superficial tool to make a company seem innovative – even when it’s not (and we‘ve all seen it).
I like principle #2 around focusing on people interactions versus process (sooo true);
And #4 empower the team:
“The team knows more about the customers, it knows more about what it can do. If you make it autonomous, within some boundaries, you can have something special. The team performs at a new level. The quality of the product goes up.”
flowing “up, all the way to the top, to people that have been promoted—based on past behavior and successes—to people that supposedly know more.”
I like the emphasis on autonomous teams and the importance of changing the culture and ways of workings across the organisation (incl. procurement, finance, compliance). What I’m not hearing here, back to principle #1, is user testing (qualitative and quantitative). I fully agree with the importance of the PO role especially the “organisational capital” and leadership that it requires. But you can not just have PO (product owners) or agile teams “representing” users. You fundamentally have to include consumers in the product development.
Steve Denning also really helps with Understanding Fake Agile (SAFe, Agile light etc…) and defines Business Agility as the agility of the entire organisation with 3 strategic agility laws (whereby unless you are obeying all these “laws”, you can’t really call your organization Agile):
- the Law of the Customer
- the Law of the Small Team
- the Law of the Network
These include both operational agility (making the existing business better) and strategic agility (generating new products and services and so bringing in new customers).
Ultimately this other episode sums it up:
I love the simple statement towards the end around 21’30
“When it comes to the next-generation operating model, conceptually people find it easy to digest, to at least understand. […] There’s someone who leads digital. There’s someone who leads automation. Getting those folks to interact and coordinate is just not easy. They all have their own road maps, pipelines, prioritization schedules, and how you get those things to coordinate does require senior leadership to help coordinate.”
Like I alwas say, it’s all about execution and coordination between teams & different incentives.
And that has to come from the top!