Innovation

Growing Responsiveness: Designing the Rules of Digital Transformation

CIO or IT Director is a curious title these days, it’s becoming unsure of who it really is. Having held this title in major companies people assume that I am a technical geek of some sort. Nothing could be further from the truth.

October 24, 2016

My last external appraisal opened with the worrying sentence

Anthony has an unusual background to be running an IT department’  

However, far from being career limiting, I would argue that this is actually the best thing to have written about you if you are an IT Exec in the Digital Age.

So why am I ‘unusual’? Well my background is firmly on the business side. I graduated into sales and ran my own consultancy for 12 years, without a line of code in sight. Today my role is to support transformation in IT, or to be more precise to help IT and the business uncover the benefits of new techniques.

These techniques can arise in new IT infrastructure, IT tools, social collaboration platforms, fail-fast innovation strategies, redesigning key processes or building a new strategy for the company’s future direction. Very often their adoption is part of a bigger picture of change – what people are calling “Digital Transformation”. It’s maybe not the best term, it ignores how much of the change is really about the way people relate to each other, but let’s go with it for now, as I want to provide some insights on how I manage this process.

A Case in Point

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In 2015 I was responsible for Global Enterprise IT at Rentokil Initial. Rentokil is easy to misjudge as a company. Some see the vans on the high street as something like like the local plumbers, but the company is actually huge. Rentokil Initial has 30,000+ employees and a global turnover in excess of $2 billion. It’s a diversified pest control and hygiene company that deals in routine and extraordinary hygiene issues, ranging from the traditional pest business and hygiene services, to specialist services like trauma and crime scene cleaning.

Bringing digital change to companies of this size and complexity is not about applying a top ten to-do list. There is no formula for it. In the end it comes down to how people interact with each other, therefore what their beliefs are, their sense of risk and their incentives. Always the change has a context: some fear of disruption.

In my experience of large organisations there is often a tension between sustaining its existing businesses while knowing that technology will disrupt it. And at the same time keeping the markets onside.

For example, the heart of Rentokil’s business is based around a simple model, as many companies are. However, it’s a relentlessly curious organisation and has realised it can use technology to significantly differentiate its services. There are parts of many businesses where today the human in a van or on a bike will be replaced by the Internet of Things – sensors, robots, drones, autonomous vehicles, and algorithms.

To give you an example, I know of one company that is automating the process of making decisions about what to innovate. The theory is, humans are particularly bad at making decisions about where to invest in innovation. Sensors, data and algorithms, on the other hand, can pinpoint exactly what needs to be improved. It is better not to leave such critical decisions with the politics of a department or a silo.

Many companies operate in this new world, where data driven discovery will be very disruptive and threaten competitiveness and jobs. That’s a tough place to manage change. So phase one for many people is to bring in new efficiencies in areas like scheduling but phase two, displacement of people and the creation of new markets, are on the horizon.

We also need to acknowledge that change takes place with imperfect information. To underline that a little, you have the issues raised above of creating the right dialogue, but you have to do that without knowing exactly where you are headed or if you can master the technical skills to achieve your goals. That is actually exciting stuff and it’s the kind of milieu where people can forge strong collegial bonds and achieve extraordinary things together.

It is essential to deliver clear messages that people can relate to – that will help the change process. I don’t want to pretend that there is a formula for this but here are some guide rails that I find useful.

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The principles of responsive change

1   Dealing with uncertainty

While there are books and articles out there that can provide a guide, the real task you face is to get the right people talking in ways that promote change. In particular, you’ve really got to create the right balance between the exciting opportunities that lie ahead and the need for cooperation to get there. Sounds easy, but many key people feel threatened in different ways. You might think “the threat” is a political issue in middle management, but it can be the CEO feeling his whole legacy and reputation is at risk from your actions.

It’s a brave CEO that chooses to disrupt his own business model, but if you don’t other external forces will do this for you. As Jack Welch, Chairman and CEO of General Electric,  famously said of business “If the rate of change on the outside exceeds the rate of change on the inside, the end is near.”

The possible negatives in this situation can easily add up. Like everyone knows, you have to keep executing while you bring about fundamental change – nothing new in this.

The new bits in the change equation are the pressure for speed and the complexity of learning many new things quickly. Today you have to negotiate change among people who feel threatened, but also in that situation you might all lack some of the knowledge needed to make new processes work effectively. You are sort of flying blind. Not completely so, but important peripheral vision is inevitably missing and that can dent people’s confidence.

I believe it is a CIO’s responsibility to manage this situation. I look for the colleagues who are excited by the opportunity to drive it along with me.

2   Evangelising the benefits of a new architecture

I said at the start that I am not a technical geek. I think that is a strong position from which to manage technological change. Because of my background, I always ensure that I understand all the benefits of innovation and take nothing for granted.

I can’t afford to rely on common assumptions about the benefits of new architectures like microservices. It is incumbent on me to really understand and frame the benefits properly as applied to my organisation, and be able to communicate those to people with far less time than me to investigate these benefits.

So my first objective is to get to the bottom of what’s new and why it helps. I try to do that with colleagues and prefer not to use consultants. We have to understand rather than be told by someone else.

3   You will be multimodal

The most immediate consequence of change is that we need to become multimodal. You can’t just get rid of legacy, so you must find better ways to exploit it. The key is to look at your application portfolio through two lenses, the one that operates the business and the one that differentiates the business. Yes, operational efficiency will always improve business performance, but this alone will not provide a step change in your fortunes.

Legacy requires a different approach and this means having a team of resources dedicated to maintaining and securing legacy. It means having  another team to exploit new architectures, tools and applications.

Nobody can tell you how best to balance these needs, it is your problem to explore and solve. It often means late nights working with colleagues who can help devise new process flows, new decision processes and new work methods that you can then share around with other people to get their feedback and input.

Multimodal working means you will still have waterfall development processes for some core elements of the business, while looking to microservices and continuous delivery for others. The key again is not to see the IT component as an end in itself.

Continuous integration and delivery can give you more robust customer feedback and superb developer productivity. But if it is not delivering new value to the customer there’s little point. That dialogue I mentioned above is critical to ensuring that these new techniques are there to deliver innovation to establish competitive advantage, something so new that business colleagues and IT colleagues will need to change how they work. These are the real challenges.

4   Enterprise agility

To focus solely on delivering new technology and tools quickly is not a smart way to think about change. You need to go a step further and focus on the real enabler, Enterprise Agility. All too often I have seen an Agile development house mated to a fixed time, scope & price customer expectation. These are terrible bedfellows as they focus on different things.

Firms are held hostage by the tyranny of the 3 Bs: Budget, Business Case and Best Practice. We happily quote all three as being perfect at the start of a project and assure our sponsors that ‘best practice will see us through’. These projects always start happy – we’re all going to make a difference! Then months later as the Bs fail we are surprised (again!) that they end sad.

My inclination is to flip that on its head. I don’t encourage people to start sad, but do find it is constructive to begin rather puzzled, or perplexed if you like, and then take the journey with a common sense of discovery, believing that it will end happy.

Key to that: Never assume you have the monopoly on making all the new, always look to buy in what you can within projects. Don’t fixate on building the greatest app, focus on getting hold of a good app fast. My best teams are those that scavenge for new stuff, get stuff for free, rent it and buy it when they need to. Build is the last resort. My mantra is: Make it Quick, Make it Good, Make it Great, in that order.

Finally, I find organisations are always trying to build the last great thing. There’s a really strong inclination to make decisions late about stuff that’s already out there. In 2016 you need to be building for 2021, but the reflex is to do what those other folks are doing, the ones you read about in the trade press. Agility means being able to build in anticipation of change, the future is already out there, it’s just not evenly distributed yet.

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5   Two Sides of Freedom – Letting Go and Creating the Right Framework

One of the things executives do is accumulate power where they can. It’s natural. You are taking responsibility and you need control, but actually that makes us blockers. Projects don’t deliver because of our defensiveness, or you end up in fights. My experience is exactly this – I have tried to keep hold of things because I ‘owned IT’ and I care about my job description. That brought me into conflict with people and threatened progress. I had to learn to let go of responsibilities my department traditionally held dear and transfer them to other departments, so that ‘the whole’ could function better.

There’s another side to that too. New technology is freeing people up to think more and it is supporting people to experiment more. Some companies initiate this part of the process by giving people the opportunity to come up with new ideas and pursue some intrapreneurship programmes. Of course there are now platforms to help you generate more and more ideas.

All that is very liberating but companies need rules. Freedom needs a framework. I find I have to keep writing that framework. That’s what the late nights are for – working with colleagues to provide a structure that liberates people. I now see that as more of my job than holding onto power.

6   Time for an ultimatum

In digital transformation you cannot offer a guarantee of success other than to say: I know what I am doing. You cannot give guarantees in the way that a CFO or CEO might want. Your work will meet resistance. And you may reach a point where you have to turn to the folks with the ultimate control and responsibility and say, more or less, trust me or fire me. Back me or sack me.

You are there to make change happen and when there are no guarantees it comes back to the issue I raised above. You are the person that needs to make the dialogue work. For that to happen, trust in you has to be pretty explicit or you are undermined. Conversely, you really are there to get this transformation job done. If the resistance is too high, your time is spent better somewhere else.

7   Rewriting the rules of the organisation

Finally though, we have to recognise it’s a bit more than that – you are there to help people write the rules for transformation; to interpret how this company, with these people, in this situation, with technology at this state of maturity, can find a way forward. In my experience that will always be different simply because the variables are always different. You have to convey the “no formula” truism and win people over to the reality that you, they, all of you, are redesigning the organisation and you are doing it freehand.