Digital & DevOps Transformation: The First Three Areas of Focus

Introduction

Setting the Stage

The concept of digital transformation has now firmly taken root in nearly all industries from banking to manufacturing, from retail to aerospace.

As digital and devops transformation programs proliferate with the speed of agile transformations of the past, we must continue to regularly reground and remember the motivation for any transformation (digital, devops, agile): to deliver value to our customers and clients faster, and with higher quality (reliability).

“The purpose of any digital transformation is to drive ever high value to our customers faster, and with increasing reliability.”

Inside the digital transformation journey, we draw a clear distinction between where we are (point a, not agile/not digital), and we want to go (point b, agile/digital). While this is a fairly obvious distinction, the subtlety of a digital transformation lies in that it does not only affect technology, nor solely organizational processes … but in most cases revamps the operations and the very culture of the organization itself.

“The complexity of a digital transformation lies in that it evolves the very culture of the organization itself.”

Transforming an organization´s culture is not easily done, and is certainly not a sprint (pardon the agile pun), it is a marathon.

Digital Transformation is a Marathon

The reality of any true transformation is that it is messy, and it is a long term challenge. Until an organization passes the fulcrum point, transformation requires a constant focus in order to drive performance and next generation practices. It rarely comes easy, but in maturity (and, I would argue even along the way), it is well worth the investment for the rewards it delivers to the teams, end customers, and clients.

Forbes contributors have placed the average failure rate of transformations at approximately 84%. This number may be slightly higher or lower, but the average success rate remains (also constant in 2017) fairly low. The importance of this metrics is less about showcasing the obvious complexity of the journey, but rather about ensuring the organizational commitment required to drive the benefits associated with a digital transformation.

Digital Transformation: Three Focus Areas

Digital transformation will affect an organization´s operating models, business processes, technology adoption, and utilization of best practices. However, the true transformation is the cultural transformation that, over time, creates an environment of innovation and continuous delivery that becomes self-sustaining (drawing inspiration from examples such as the Amazon flywheel concept).

During the early “revolution” phases of transformation, three focus areas form the foundation of the first phase playbook:

1. Establish and communicate simple-to-understand transformation objectives
2. Set up the right transformation catalyst organization
3. Established a model of continuous transformation pilots

The objective of the digital transformation is to create and nurture a culture capable of driving continuous delivery, innovation and stability across the product delivery lifecycle. The end objective remains to drive faster value to our customers and clients.

Focus Area #1: Establish Easy-To-Understand Objectives

Anything we do must be measured. W. Edwards Deming states, “a goal without a method is nonsense.” (The New Economics, p. 122). We must keep in mind our goal, and at the same time refine the manner in which we attempt to achieve that goal. The refinement of our methods is what we must measure and improve relentlessly. When we are not moving closer to our objective, we evolve the method, continue to measure, and do it all over again … wash, rinse, repeat.

Our cornerstone is to establish easy-to-understand objectives. These objectives must be simple enough to be understand throughout the entire organization, to ensure that everyone can rally behind them. If they are not sufficiently simple to understand intuitively, this will lead to a significant complexity in adoption and establishing a common vision. Creating objectives is key, but keeping the momentum around those objectives, and measuring our progress constantly is fundamental to the success of any transformation.

While there are many critical metrics that will govern a transformation, including measuring our operating models, business processes, and technology adoption, an important foundation principle during the early phases is to keep the metrics and vision simple, and aligned to our original objective of driving value to our customers.

In order to drive a coherent and easily consumable message for our global teams, two key metrics remain at the center of any transformation: velocity and quality.

Establishing these early metrics does not imply that they are exclusive metrics. That is not the case. However, driving simplicity in messaging, both to our executive teams as well as our delivery team members remains a critical element to the success of our transformation program.

Challenges. In aligning our metrics to velocity and quality, driving alignment with our overall transformation objective statement (delivery value to our clients, fast), this often simplifies and creates blind spots related to several key metrics (at the summary level). These two metrics alone do not address advances realized with respect to our operating models, organization changes, business models, and technology transformation / migration efforts. However, a balance must be struck between the complexity of measuring all critical factors, and showcasing the most important metrics of the transformation.

Focus Area #2: Set Up the Transformation Catalyst Organization

Transformations are, in many cases, massive efforts, hitting nearly every part of the organization, organizational models, business processes, and technology delivery. Establishing the right organization to drive and catalyze this transformation is foundational to the success of the long term effort.

When establishing the early (or Phase 1) transformation organization, it will be important to establish the minimum team necessary (but not beyond). There are several stages within a transformation, and in many cases the desired objective will be solve all of them in one sweeping suite of actions. Acknowledging that this is impossible, the focus must remain to establish the team that will begin the transformation, and provide support to those teams in early transformation (pre-fulcrum phase).

“The objective of the early organization is to establish the minimum team to drive quick wins by executing hands-on transformation in multiple areas of the organization.”

The objective of this early transformation team will be two-fold. The first will be to establish a global (cross) team, able to align high level objectives and cross-organization solutions. The second objective will be to drive parochial transformation, within the critical (early) transformation areas. In doing so, a central (global) team is established, with federated (mirror teams) in each business unit, or geography to drive local change. Local teams will constantly execute within the context of the global transformation objectives.

Within this model, the global leaders establish the overall (organizational) trajectory and objectives. They will be responsible to both establish the high level frameworks (organizational change maps, operational process re-writes, business process updates, and technology solutions service solutions) and drive tangible change through hands on delivery.

The mirror teams, within each of the business units (or geographies based upon the local need) are then responsible to drive the global objectives generally, while concurrently delivering value and managing local trade-offs.

“Global transformation teams drive the high level strategy, and form part of one cohesive teams with mirror teams in each business unit, responsible to drive local change.”

Challenges. By establishing a global context with local implementations, this will require leaders who are skilled in managing within a federated delivery model. The benefit of this framework rests in that it will allow for increased agility, faster local (practical) delivery within the context of the business unit or geography. The downside lies in that a certain level of constant course correction will be required in order to reconcile global vs parochial objectives.

Focus Area #3: Establish a Continuous Transformation Pilot Model

The importance of establishing continuous transformation pilots cannot be overstated. The goal of establishing a model and the first pilots is a cornerstone to the foundation of the culture that must be created in order drive true transformation.

By establishing these first pilots (within each of the mirror organization geographies), practically executing and measuring change, a message is immediately sent to the wider organization that tangible delivery (of products vs strategies) and execution are highly prized and valued. It further sends the signal to the organization that the transformation is not a future event, but rather one that is already underway and happening in the present tense.

“Pilots, and indeed a culture of executing pilots constantly, must be set in motion in order for a transformation to be successful over the long term.”

Each pilot sets in motion the transformation expected of the entire organization. Each one is an experiment, and each one must drive value in real time, with concrete objectives and metrics. In doing so, the digital transformation now becomes something very real, with very practical examples of success that improve delivery velocity and quality. These changes must result in tangible outcomes felt by our customers and clients.

Challenges. The organizational change at the overall corporate level, and changes at the local business unit or geography will have very different perceptions of impact and timing. A constant balance between the value of tangible results at the local level (which are often perceived as small at the corporate level), and the vision and measurement of the global roadmap (which is often perceived as highly theoretical to the local units) must be managed on a daily basis. Balancing these two perspectives will be important to the eventual success or failure of the transformation.

Conclusion

Digital transformation at scale is complex. In order to drive meaningful progress, there will always exist important trade-offs. It remains important to constantly reground on the foundation that the purpose of a digital transformation is to drive value to our customers by delivering our products to them with ever increasing speed and constantly improving reliability.

To successfully drive forward the transformation and truly begin to affect and evolve the culture of the organization, it is important to drive clear, simple objectives. Secondly, in order to drive continuous change, there must be organizational alignment between the global and the local organizations to concurrently drive changes against the backdrop of a global objectives roadmap. Lastly, creating and nurturing a culture of pilots and constant innovation will remain a cornerstone of the transformation, and indeed the culture that we wish to create throughout this journey to becoming a digital organization.

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