Insights | By Howard Tiersky

Gaining Organizational Agility

Why is it that we need so much agility for digital transformation? The answer is simple: the speed of digital.

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Digital moves fast. Technology is changing rapidly, and changing customer expectations. Competitors are moving rapidly, and start-ups and tech companies are going after your customers. You have to be able to come up with new ideas, test them quickly in the market, make quick decisions about what you’re going to pursue or not pursue, and how you’re going to change and evolve.

Remember in the movie The Matrix, when the bullets are flying past Keanu Reeves? He’s able to move very quickly, sensing which direction a threat is coming from, and adjusting his movements to successfully avoid them. That is the kind of agility that we need in the digital arena. It’s the kind of agility that most start-ups have, and many enterprises don’t.

What are some ways you can improve your organizational agility? In this article, we’ll discuss five specific types of agility that important for success in digital and digital transformation. We’ll also discover some of the things you can do. within the context of a large enterprise, to try and improve each of those types of agility.
 

Sensing

The first type of agility is the agility of sensing. But what does that mean? Imagine The Matrix. The first thing you have to focus on isn’t moving, but knowing what’s going on around you, so you can be alert and aware of all the things that might require action on your part. You can think of sensing agility in four major categories:
 

  • Customers
    Ultimately, your customers’ behavior drives your success. Study their behavior on your websites, mobile applications, in stores, and through the other channels in which you interact with them. Be constantly measuring and watching their behavior. Agility in this area isn’t just how quickly you’re collecting data, but how nimble and agile you are in analyzing that data, and in understanding what it means so you can determine what actions to take.

    In addition to your own behavioral metrics, how else can you study your customer? Make sure to measure their ongoing satisfaction, survey them, conduct usability testing, and use data from third-party research that shows technographic, behavioral trends and psychographic trends. There are many sources of information to help you understand your customer segments and how they may be changing.
     
  • Technology
    Technology is changing at a rate like never before, whether it’s wearable tech, big data, or virtual reality. Things like beacons and other network tools allow us to sense where our customers are with more accuracy than ever before. There are so many technologies that have the potential, at the right point in time and at the right level of maturity, to enable you to create a new value for your customer. Paying attention to and sensing these changes in the technology landscape will allow you to quickly figure out when they’ve reached a point where you can take action. If you don’t (or don’t move quickly enough), you can expect your competitors, traditional or start-up, to be doing just that.
     
  • Competitors
    It’s critical to have to sense what your competitors are doing, and to constantly research competitive strategies. How are they changing their product mix or pricing? How are they changing their customer service, and where are they failing to deliver for their current, or might fail their future, customers? How are they communicating with your customers, to bring them over to their side?
     
  • Regulatory
    Regulations are especially key if you’re in a heavily regulated industry (though, most industries are subject to some level of regulation.) As regulations change over time, they can change current opportunities, or even create new ones.

That’s a lot to pay attention to! How can you effectively put sensing programs in place? The first thing to remember is that simply gathering information is not sufficient. You need to gather the information, and then analyze it to develop actionable insights. Finally, you’ll need to social and share that information with your team.

When you break it down, there’s no big mystery on how to achieve a sensing culture. The main thing you need are resources that are both dedicated to these activities, and that have the right research and analytical skills. Recognize that a part of success in digital is to be constantly sensing, and create a culture where information from sensing is being communicated and disseminated on an ongoing basis. Encourage your people to voraciously consume information, and use it in actionable ways as they develop products and services to improve the digital experience of the customer.
 

Technology

The primary tool of the digital world is the tool of technology. Do the tools you have at your enterprise allow you to move quickly from an idea to a customer experience?

Generally, that’s not the experience in most enterprises; many struggle with technology stacks that were created in an era before we had the need for this level of agility. They may have been conceived with a certain kind of transactional process in mind that’s either no longer applicable or reflects only one of many different types of transactional processes that you need to support. Truthfully, a lot of aging technology needs to be replaced, or needs to be wrapped so that it can gain the necessary level of agility.

Here are three specific things you can do to help guide work between your business and IT departments and see how to move forward technology that you currently have supporting digital forward.

  • Requirements
    What does requirements mean? Traditionally, the business side would define the requirements needed for a particular project on a particular channel and IT would build them for us (hopefully successfully!) The problem this model is that the end result is only what’s needed at that moment. Today, we need to be able to change, evolve, and adapt so quickly that process is too slow. If every time we realize what we need, we have to go back through a whole time-consuming IT build, things wouldn’t move quickly enough. When you’re thinking about requirements, don’t only think in the context of what you need today, but ask the broader question of the requirements for technological agility, and communicate that to your IT department.
    After all, the IT department and those responsible for implementing technology all need to understand what needs to be flexible — because you can’t make everything flexible. There needs to be ongoing dialogue to focus the requirements around the things that need to be able to change on an ongoing basis.
     
  • Software
    Software as a service platform is a huge help for all of us trying to make technology more agile. Why? Because in the old days, a software product (something like a major piece of enterprise software,) would require hardware implementation. It could take a year or two to implement it, and the implementation would require massive customizations. The software would be expensive to buy, implement, and customize. And if you wanted to make a change? You’re talking about abandoning major investments.
    In today’s SAAS world, we’ve created much more flexibility by using an integration layer around our most core systems and data. We can plug in different tools, whether a shopping cart tool, CRM, data mining tool, or mobile capabilities added into our apps. If we build out our capabilities using these types of platforms, we can swap out and change things much more rapidly.
    And with most of these SAAS platforms, we don’t have the issues associated with versions. Previously, if you were on one version of SAP, and you wanted to go to another version of SAP, it required a major headache of an upgrade. Today, versions build off core components in software. A product like SalesForce is constantly evolving and improving. Everyone is always on the most recent version of SalesForce, and you have a huge ecosystem of plug-ins and other code that’s designed to work with anyone’s implementation. That’s just one example of a SAAS platform that gives you an enormous amount of agility and flexibility, so it’s important to move yourself to SAAS platforms wherever possible.
     
  • Abstraction
    You want your product development team, product owners, content creators, and marketers to be able to tweak and adjust the digital experience as much and as rapidly as possible. That means you want to try to abstract the capabilities up from the level of code.
    There are three main areas of abstraction:

    Content Management: It’s imperative to be able to publish and edit content without needing to go through IT. I know that might sound super obvious and kind of old school, but I constantly see large enterprises where key parts of the content ecosystem isn’t accessible from a business perspective, and always requires IT involvement. Don’t let that happen to you!
    Presentation: It’s one thing to edit the content, but what if you want to change the layout? What if you want to change the process for content creation? Making those capabilities accessible to business users is possible with today’s experience management tools. We do a lot of work implementing these kinds of tools, and making sure that the business has the ability to make changes in the experience at their fingertips, and without having to go back to IT. This is a crucial capability for anything they’re going to want to frequently change.
    Business Rules: Implement a business rules engine as part of your technology stack, so that as you decide to make changes — whether in pricing, policy, or logic — they are not primarily in code that has to be changed by a developer. Then your business rules can be changed in more or less the same way your content is changed: by a business user that has the appropriate entitlements.
     

Decision Making

If you’re in a large enterprise, I’m guessing that you’ve had the experience of trying to move digital efforts forward, only to be faced with a multi-month or multi-quarter capital budget approval process that requires endless spreadsheets, forecasts, meetings.

On one hand, these things exist for good reason. When companies are going a large amount of capital investment, they want to make sure that those decisions involve all the right people, and are being thoroughly vetted. It makes sense to want to spend their money carefully, but in the digital world, this process just doesn’t work. The speed of decision-making from the old, quasi pre-digital world kills our efforts in the digital arena, because digital requires moving quickly. It’s crucial to create a faster process for getting those decisions made. In the digital realm, you’re better off being fast than being right. If you’re fast but wrong, you have agility. You’ll be able to sense how what you’re doing is wrong, and can react and make a shift. If you’re slow? Forget it.

Wayne Gretzky explains that he wins at hockey not by skating to where the puck is, rather, where the puck is going to be. Can you imagine seeing where the puck is going, but then having to fill out a 25-tabbed Excel spreadsheet, submit it to the capital-approval process, and wait several months? By then, the game is over, everyone’s gone home, and the puck’s been put back in the locker room. You need to be able to move more quickly than that.

To solve this problem, make sure that you have true alignment around the goals you’re trying to drive through digital. So often these capital-approval processes are about strategy and tactics: What are we going to do? What kind of tools are we going to use? What technologies are we going to buy? What capabilities are we going to provide to our customers? That’s exactly the kind of stuff we have to be agile about.

Agree with senior management on the things we’re trying to drive through digital: brand awareness, lower acquisition cost, increased wallet share, and increased conversion on the website. Once you agree on the key business goals, find people who you trust to run digital. Give them the money, and the room to fail on the way to success.

I worked with a large energy company once that made this shift because of these problems. They made the decision to give the Chief Information Officer and the Chief Marketing Officer a substantial capital budget to rapidly drive digital, with quarterly check-ins to report how they spent the money, and what the programs were achieving. This process was hugely successful for them, and resulted in large increases in digital revenue, that far eclipsed the investments that were being made.

Unfortunately, after two years of success, another even larger energy company came in and bought the first company, telling them, “That’s not how we do it.” They dismantled the process, and the gains and growth subsided.

You can learn from their story. Try your best to get the level of autonomy and authority needed for the folks on the ground, who are actually doing these digital transformation projects.
 

Strategy Shifts

Ninety percent of all start-ups fail. Those that succeed don’t often achieve success because their original idea, business model, or original concept was right. As I’ve mentioned previously, Facebook started off as a dating site, eBay started out as a Pez dispenser collectors’ site, and Flickr started out as an online role-playing game. These companies succeeded because they changed and shifted their strategy many times on their way to success.

In the enterprise world, we often judge projects on whether they achieved their original vision or goal, hit their original budget, or achieve the ROI based on their original funding. This mindset doesn’t work in the digital space. You run the risk of teams starting to see issues, problems, or reasons to shift their strategy, and not doing it, because they’re afraid of being judged by the project’s original standards. They’re afraid of being told that they have to start the funding process all over again, simply because the strategy has shifted and changed the scope of the project. This isn’t how successful digital companies are operating.

Create a process that embraces and expects that the project you’re funding is going to go through a process of trial-and-error to find its way to the kind of digital transformation success that you’re seeking. Keanu Reeves can’t know where all the bullets are going to be before he goes into the room — that’s not how he avoids getting hit by a bullet. He does it by sensing what’s going on around him, and moving to where he needs to be at that particular moment in time. Give your digital teams that level of flexibility and, reward them for making those kinds of shifts.
 

Teaming

FROM gets involved from working with a lot of companies, and we get the same questions a lot:

  • What’s the right organizational model for digital?
  • Should there be one central digital team?
  • Should digital be part of all the different P&Ls?
  • Should it be a blend, a combination?
     

These are important questions. Having said that, let me disavow you of the myth that there’s one magical structure whereby all the digital work can be kind of done by one single team of people operating under one executive. That’s impossible! Digital efforts cut across every part of the organization. When you want to move quickly to make a change or bring something new to market, you need IT, Marketing, R&D, Customer Support, Engineering, Manufacturing, and any other key silos in the organization to make it happen.

As a side note for all of you balking at the idea of silos: You’re going to have them. You can structure them in different ways, e.g. phases of the customer life cycle, customer segment, geography, but you’re going to have them if you’re a large enterprise.

The key isn’t to try to figure out how to get rid of silos, since that’s all but impossible, but to figure out how to create a culture where teaming across those silos happens rapidly, and there’s alignment and mobilization of the people that are needed. We’ve done work like this across many organizations, including our own. Teaming agility is what’s necessary to achieve that kind of alignment, whether by workshops to align goals, or just a culture of innovation that creates the organizational functionality that we need for people to be able to swarm around an opportunity quickly, instead of focusing on the friction that can exist between different departments.

These five areas of agility that are essential. Most are something large enterprises struggle with, but hopefully you’ve gained a few tips and tricks on how to overcome some of those challenges.