Would You Follow This Advice?

According to a recent Harvey Nash / KPMG survey, businesses are increasingly looking to CIOs to improve customer experience and to deliver capabilities which grow new revenue from both new and existing customers.

At the same time Gartner is touting a model of 4 strategies to do this, summarised in the diagram below.

However, I have a problem with this as a strategic tool. To my mind, it is very bottom up and not very illuminating beyond stating the fact that you can exploit various tools. It does not actually connect with business value or scenarios that businesses may find themselves in. It would appear to drive the kind of thinking which says "I've got 4 hammers, what size nail do I need to solve this problem", rather than "what is the real problem? do we actually need to do anything? what are our options? how would we best address this quickly, to appropriate quality (& value) and can we do it economically?" Digital Strategy should be about "how do we deliver new and unique value?" not about "here's some solutions, let's find a problem to fix."

Are Businesses Still Missing the Point About Digital Transformation?

The other night I was talking to the Head of Product Management for a company who run several Dating Site brands (facing into differnet market sectors: young, old, gay etc. and across over 50 countries). He was really keen on the term "Digital As Usual" (DAU), because it encapsulates the culture and thinking needed to sustain a Digital Business Model.

So I was quite disappointed to see Raconteur's recent article on Digital Transformation, which shows just how badly many companies are still addressing their move to a Digital Business model. The usual collection of issues showed up: It's an IT problem, its a siloed CDO problem etc. Though, to some extent I think that the authors and experts quoted in the article got it wrong too as they keep talking about Digital Transformation, implying that you get there in a relatively short period of time. The whole point is that you never get there. It is a continuous journey and requires the whole business to act as a team who enjoy voyaging. So instead of transformation programmes, they should think Star Ship Enterprise and understand that what they are really pursuing is organisational excellence and customer delight. Getting that right will move the dial on meaningful organisational measures of performance and deliver revenues and profits (or whatever relevant Value that applies to their organisation) as a byproduct of operating a successful Digital Business Model.

What was interesting in the article was the criticism of organisations who think about digital as just being IT. Whilst in Asia Pacific, a recent survey looked at Digital and IT Transformation. Companies in this region belivve that they are leading the world in digital transformation. Its finding was that where businesses had addressed IT Transformation, they were over 39 times more likely to make better faster decisions than competitors and 13 times more likely to complete application deployments ahead of time, whilst running their critical applications at less than half the cost of competitors (who had not transformed). This is despite the fact that IT leaders are less likely to be involved in critical business decisions that in other parts of the world.

So, IT and lean capabilities are essential enablers, but the senior management team needs to work as a team and not a series of siloed prima donnas. However it is difficult to find anyone who works maturely across all aspects of digitalisation. The Head of Product Management that I talked to (above) freely admitted that his organisation, although growing successfully, does not put enough attention into data quality and avoiding technical debt. And the Strategic Busines  KPIs that they work to are not perhaps the best in optimising customer experience. However, they were very storng on identifying tangible market opportunities, product thinking and lean delivery, whilst enjoying a positive collaborative and innovative culture. They recognised that innovation does sometimes mean learning from failure, although they don't have a strict measure on how much failure is acceptable. But they were doing enought to prosper and continue to learn and grow on their journey. And that is the point.

Aligning Digital Exploitation with Operational Capability

All Enterprises Are Not the Same

One of the tenets of Digital As Usual (DAU) is that most businesses are not pure play digital organisations. In almost all cases there are operations and activities which are essential to either fulfilling service or delivering a product which need to be managed as well. The Digital Adoption Framework assumes an Industry Categorisation Model as illustrated below.

The Industry Categorisation Model identifies 5 Categories along a continuum of Industry Product Nature. At one end of the continuum are “pure play” digital organisations, whose products are Information and Content based. These consist of Market Platforms like eBay and Compare the Markets.com who provide a platform, through which other organisations and people sell their goods and services, as well as Publishers and Providers of Content who provide videos, e-books, podcasts, news, music etc. At the other end are Extractor and Grower type businesses, such as coal mines and cocoa growers who provide natural unprocessed products. Off course not all businesses fall neatly into just one category. A major energy company such as Shell or Exon may straddle several categories along an Upstream (exploration, drilling and extraction) to Downstream (transport, refining and distribution) activities.

So why is this important when thinking about digital businesses? Well each different type of business operates in different ways, has a different level of dependency on capital assets and has different opportunities for exploiting digital technology to augment its business model. Additionally, the whole concept of Lean Delivery via Design Thinking, Agile Delivery and DevOps may have different opportunities and constraints as well as nature of delivery in each category.

Some Examples of Exploitation

The diagram below looks at the potential for exploiting Artificial Intelligence (AI) technologies according to Industry Category.

The “X”s in the table represent significant opportunity for exploitation against a generic type of Use Case. So for example AI technologies (machine learning, visual recognition, natural language etc.) can be used to provide insight and learning in every type of organisation, but there is very little opportunity for them to add to “customer experience” in say mining or farming. Again there is huge potential to build AI capabilities into consumer products, e.g. Alexa in Amazon’s Echo, but there is little opportunity to enhance a product such as iron ore or tree trunks produced from a Natural Product Extractor or a Grower. 

Alternatively for IoT, see diagram below, the opportunities are pretty limited for an Information publisher, but there are many areas where a farmer could use it to track livestock and monitor soil conditions and crop conditions, as well as control assets such as vehicles and trailer equipment.

This moves us onto exploiting iterative approaches within an organisation. The other night I was talking to someone from a major pharmaceutical company. Drugs take years of research to identify promising candidates for a problem and to test for efficacy and safety, as well as meet regulatory demands. There is little opportunity to exploit Iteration in this type of product development. But for the company overall, there are opportunities around internal processes and with Agile Marketing.

Agile Marketing is a growing area of adoption within industry and works well for consumer driven businesses. At its core is the use of small integrated product teams which focus on market research, product promotion, delivery of marketing and promotional materials, advertising and the information analysis systems used to support marketing data analysis. These teams tend to work in multiple sprints testing out marketing promotion hypotheses and rapidly identifying which approaches produce optimal results, to improve overall revenues. 

Iterative development also its quite different for delivering an oil tanker or a film, to the development used to support a consumer service. In the case of the former, iterative design, development and continuous testing techniques are used to deliver a single integrated complex product over a period spanning many months if not years. In the latter they are used not just to deliver the product, but to continuously keep it fresh, up to date and moving ahead of competition that is playing catch up.

So it's important not to adopt a one sized fits all approach, but to really get down to what can work for your organisation. This is part of what I talk about in my book.

DevOps 2018 Report

Puppet has published its 2018 State of DevOps Report. This year they have examined the premises on adoption and confirmed that most successful adoptions follow a project by project approach, with a single project pioneering the way and gradual cross poliantion of practice whilst it is matured.

The project focuses on 2 aspects of adoption:

• CAMS - Culture - Automation - Mearsurement & Sharing

• a 6 layer maturity model from 0 to 5, which broadly follows a simplify and Standardise Approach, Followed by Process Practices, then Automation and finally Self Service capabilities.

One of the themes of the report is the gap between teams practicing DevOps and Senior Management. It still appears that DevOps adopters continue to struggle with cultural aspects associated with empowerment and reporting.

Anyway, for anyone interested in the Lean Aspects of Digital Business Models, this is essential reading.

Agile CIOs

The ever changing role of the CIO is often subject to much debate. Opnionons vary from the challenge of "why do we need a CIO?" to "CIOs should be driving our innovation and vision".

 A recent article by McKinsey - How to Become an Agile CIO - is a typical example. The authors,  Santiago Comella-Dorda, Quentin Jadoul and Swati Lohiya, set out 3 main aspects of An Agile CIO's role:

• Architect / Technology Visionary

• Driver of Knowledge and Talent

• Problem Solver

Whilst they are obviously part of the role, I think that they do miss the point in a number of areas. The first is that the CIO should be taking the llead in helping build a positive business culture which avoids blame, encourages collaboration and focusses risk appetite around continuous innovation. This requires a good focus on the soft aspects of Employee Engagement, as well as some on providing supporting tools.

The second is on uniting the Senior Management Team and their teams in building common understanding of each other's problems and shared opportunities, as the basic pre-requisite for developing an Integrated Product Team approach, in which each IPT addresses the requirements, design and enhancement of End-to-End product processes (whether there are internal or customer facing products).

The third issue is being the corporate consience on balanced performance and investment; Businesses which operate as teams tend to be the best at developing and exploiting digital business models and sustaining a Digital As Usual ethos. This does require balanced investment and commitment of resources so that the orgnisation can not only address new business opportunities, but also improve exisiting products, maintain capability and protect itself (and its customers).

Cyber Aggression versus Authenticity

In a week when EU officials expressed the fear that "British Agents may have bugged Brexit Planning Sessions", it is interesting to note that President Trump has decided to reverse a previous Obama administration framework for controlling the launch of cyber attacks by the US.

Sabine Weyand expressed the EU officials' fears following an incident in which Britain requested that slides from an briefing meeting should not be released to press. this has led to all mobile devices and ipads being banned from meetings, in case they are used to spy on them or leak secrets. Trump's move undoes measures designed to ensure co-ordinated and considered response by the US's intelligence community to perceived threat. The exact reasons for this have not been disclosed, but given the president's penchant for action, the political pressure that he has suffered following allegations that Russian organisations may have interfered with the presidential election and the fact that a considerable number of potential foes may be looking for ways to hit back at the US following sanctions placed on Turkey, Russia and Iran, it is not surprising that he might want to be able to react quickly without engaging multiple layers of decision making and delay.

At the same time in an almost polar opposite direction, key operators in the digital world are emphasising the need for "brand authenticity" in the way in which they market and sell their products to today's modern consumer. This is discussed in some detail in this quarters magazine from Nimbus Ninety, an organisation focused the London Digital Ecosystem. They also discuss some interesting thoughts from academia about how Socrates railed against the idea of writing things down and how this would damage young people's minds, in a strikingly similar way to which modern social media is being accused of damaging generation Z's cognitive attention spans. Plus ca change, plus ca meme chose.

The Chief Data Officer

Many organisations are experimenting with the concept of a Chief Data Officer. Although according to Raconteur most are struggling with the concept as well as making headway with the concept of managing data for value.

It seems that there are a number of problems:

• Business Understanding of the Role and Data Issues;
• Resourcing, Funding and Provisioning Data Initiatives;
• Current Starting Points for many Businesses with Poor Data Quality;
• Focusing too much on compliance and not enough on Value.

Personally, I would suggest that there is a value staircase for Data Management starting with Compliance and Protection on the Bottom Rung and then progressing through Quality, Integration, Sourcing (external data feeds), Insight & Intelligence to Adaptive Control (involving use of machine learning, experimentation and up to the minute data feeds to optimise control).

It is difficult howver to obtain value if a business tries to progressively work its way upwards through this staircase if it attempts to do everything in the first one before attempting the next step. The scope is too wide. Instead busnesses need to prioritise a business problem or opportunity and address a vertical slice down this value staircase to deliver value quickly. Progression can be achieved by addressing the next opportunities and reviewing what is needed in each step to improve overall capability as each increment is implemented.

However, probably the biggest issue is the role. What is the difference between a CIO, a Chief Digital Officer, a CTO, a CSO, a Principal Data Archiect and a Chief Data Officer? These all overlap and are often confused in scope. Many businesses are handing the Chief Digital Officer role back to the CIO, so it may be time to do the same with the Chief Digital Officer, because if they are separated the CIO's role is hollowed out to just look at the plumbing and not the value to the business.

It is also important to delegate data quality and integrity to business managers responsible for exploiting data in their day-to-day operations. IT may provide the policy framework, tools and measurement framework for managing data quality, but line management needs to take responsibility and include data quality in their personal objectives, just like they do with budgets. Otherwise value will never be achieved.

Agile at Scale

In a recent report The State Of Agile 2017: Agile At Scale Forrester stated that DevOps adoption is beginning to drive Agile adoption and that many organisations are adopting both simuultaneously in large scale transformations, i.e. they are going Lean as suggested in the 3rd layer of the DAF Framework (see: The Way of DAU (including the DAF) ).

Additionally, Forrester identifies major impediments:

• Culture & Behaviour,
• Availability and Commitment of skilled product owners,
• Effective Executive Leadership,
• Lack of project / programme frameworks

As key blockers to successful adoption which further re-inforces the Digital Adoption Framework principles and recommended activities for iteratively adopting a digital business model.

Anyone who wants to discuss can find the discussion group here on LinkedIn.

All constructive thoughts and suggestions are welcome.

Agile Business

A recent article in Raconteur discussed business agility and outlined some interesting case studies such as Lego and Volvo which are trying to pre-empt market trends by getting there first. It also mentions Google as the champion of "Failing Fast", without really getting into the ethos of innovation requiring experimentation and an appetite to learn from failure to either tune or abandon hypotheses on what will work in the market place.

It was also interesting that the article quoted a recent CA survey stating that:

87% of executives think that responding more quickly to new opportunities will give them a distinct advantage - whereas with DAU and the DAF, the belief is that you have to identify them and try to get there first. Responding quickly is only enough to keep up.

65% expect higher customer satisfaction and retention - which may be right about satisfaction, if their organisation has adequately focused on customer experience and design thinking, but kind of misses the point that customers are less loyal in the digital market place unless an enterprise maintains its innovation and keeps its image clean (through transparency, ethics, sustainability etc.).

58% expect higher employee satisfaction and retention - which again has some qualifiers around culture (collaboration, empowerment, personal development, communication etc.) design of work and eliminating frustrating nugatory tasks which are endemic in major corporations.

I also thought the author slightly got it wrong when reporting that Agile is chaotic. Agile is in fact highly organised, but it is a good way of coping with chaotic conditions. Anyone who has seen Snowdon's Cynefin framework would appreciate that.

Anyone who wants to discuss this can join the Way of DAU discussion group on LinkedIn.

A Day In the Life of a Product Manager

Getting up super early, Marjory K'Ting rushed her breakfast of extra strong coffee and a bagel so that she could catch the red-eye commuter train to Doontung where they were holding today's consumer workshops for the Zeting shopper app, MyWay. 

On the way she read through the latest KPI scores for the current version app. It was showing good overall trends, though she noticed that one of the target segments, for young professionals was not responding as expected to the app. What was going on here then?

On arrival she headed straight to the KafMeUp coffeeshop whose owners had agreed to let them run their workshop in am area set to one side.  There she found Zak, her super keen intern assistant lounging around outside just as KafMeUp's proprieter Ivan Blunt arrived to open up.

Inside they started to set up at their reserved area with signs inviting passersby to drop in and participate in exchange for a free breakast, paid for by Zeting. As they were doing this, Gordan Keek, one of the developpers and Susan Chain (the retail specialist) turned up and started to fill up on pick-me-up sized mugs of coffee.

Just as set up was complete, and KafMeUp's staff were ready to open up, the first customers came in. Zak's role was to meet and greet the customers and invite representative members of the public to take part in the workshop. Arty Tariq, the lead tester then arrived and joined the group, panting heavily as his train had been delayed and he had run all the way from the station to get there on time.

Gordan was their to demonstrate the current prototype for the next release of the MyWay app. Arty would capture their responses, helping refine detailed requirements, design features, usability concerns and identify appropriate test cases.

Marjory and Susan were going to review the current user experience, focusing on a couple of scenarios which had recently been identified as priorities from customer feedback. Before she started, she asked the team to see if they could explore the young professional segment issue as well.

By mid morning, they were exhausted. They had spoken to 50 or so shoppers and office workers who stopped by the coffee shop on their way to work and had a pile of material to analyse. In the taxi, on the way back, Marjory spoke to the team and got their gut feel response from the morning's work. Overall, it seemed that the work had confirmed a lot of their initial research and assumptions, but that there was a perception problem around the app with young professional who did not feel that it catered to their ethical concerns or help with finding green sourced and sustainable products. Also there was a lack of coverage of certain classes of lifestyle service and product which they liked.

She was going to have to address that soon. Which meant another meeting with the solution architect, the analyst and the project manager to see what could traded against these new requirements. Arriving at the office she quickly called up her diary and scheduled a meeting to discuss how to accommodate this within the forthcoming release.

Slipping down to lunch in the nearby deli-cum-eatery she started to think through the implications. Retailing would need to research and add lines. She would have to update the targeting and messaging of the marketing campaign for the new release. The media company used would need re-briefing and she would probably have to present an update to the Integrated Product Team and then she would have to re-forecast the numbers for the current release's performance, the costs of the new release and the anticipated uptake and revenue for the re-defined release. The product road map would also need updating and Oh! she needed to do a quick first impressions adjustment to the forecasts for this afternoon's operating plan review with the CFO and the CMO.

A few adrenalin filled  hours later she had, survived the monthly operating plan review, but with new actions to confirm her gut feel projections with more definitive estimates. Although, it was not all bad, if they met the young professional consume segment's needs and got the message through to them, then there could be a revenue boost of anywhere between 10 and 30%. They just needed to execute well.

Back to planning again, she added all her new tasks to her to do list and went downstairs to see what was going on in the Integrated Product Team's End of Day wash-up. Progress was good, and most of the issues raised appeared to have a doable action, but the bad news was that young Kendra, their graduate app developer had accepted a job offer from GitYrRox and would be leaving next month. 

Now she just had to survive the evenings drinks at the local cocktail bar whilst the ceremonially on boarded the new operations team lead Justin into the team and took pictures of him wearing a funny hat for the internal magazine. She hurriedly, phoned to leave a voicemail for her partner, asking him to leave a snack out for when she got home later that night and headed off into the social fray. ...

This is a mythical story about a product manager in an integrated product team. The aim is to convey a little of what is involved, but also how important collaboration is across the end-to-end process of developing and delivering products, whilst innovating iteratively in a customer focused manner. It's all part of The Way of DAU

The Way of DAU - The best a business can be

Just to let you know, The Way of DAU is now available from Amazon as a paperback. (click on Amazon to see) and the e-version should be available soon. 

This is a deliberately simple book on the quite complex subject of how to adopt a sustainable digital business model. It was inspired by my personal frustration with incomplete models and advice available for Digital Business.

Digital operations have now replaced traditional Business As Usual business models. The Way of DAU promotes 10 basic principles, an iterative Framework (the DAF or Digital Adoption Framework), and positive cultural values to achieve the behaviours needed in successful digital businesses.

The book is based on a mixture of personal experience (in an organisation struggling to reinvent itself) as well as collected best practices. The current edition represents an MVP version. I hope to collect constructive feedback via a LinkedIn Group to drive future releases of the book. (see: The Way of DAU Group ).

Integrated Product Teams - Digital Organisation

IPTs Are Not as New As You Think

I first came across the Integrated Product Team concept in the most traditional of environments, the Defence Industry. Their adoption was one of the major hallmarks of an attempt to revolutionise UK MoD procurement in recent times.

Benefits of IPTs

The best aspect of the IPTs, was not just that they were multi-disciplinary and therefore great at surfacing all the dimensions of a problem, but they also helped break down the barriers of distrust that exist in the Defence Industry. This is highly significant because, the industry has traditionally had a huge gulf separating the MoD and its contractors, due to the insecurity that is encouraged by the Treasury in its pursuit for what it thinks is Value For Money. The Treasury usually takes the stance that the costs are too high and the public sector is being ripped off by rapacious private sector companies, encouraging a general sense of insecurity in the public servants (in the MoD) who are dealing with them. This then leads to relationship problems and behaviours which inevitably stretch out acquisition projects, impact the quality of what is acquired and often results in increased costs. It is a situation which Demming (one of the grandfathers of the Total Quality Movement) would have predicted. As he advocated focusing on quality (driven by customer needs) and continuous improvement, with the philosophy that improved costs and value would follow.

Design Thinking And Agile

The concept of Design Thinking (see for example the UK Design Council's Double Diamond Model for product development) also relies on a similar multi-functional teams to get at what is the real customer problem to address, and then what is the most appropriate product design option for delivering it, supported by iterative design and prototyping to develop a right quality product.

So it is no surprise that the Agile Movement, building on traditional Rapid Application Development techniques of user-centric prototyping, has gradually moved to a Product Team based approach, particularly when the market driven influences of digital companies such as Amazon and Google are taken into account.

IPT Case Study

So I was really interested when SLOAN research into the adoption of an IPT based approach at a major bank was published recently. See: What to Expect From Agile. It has some great practical insights into some of the considerations to take into account if your organisation is thinking of adopting an agile or digital business model.

Digital Portfolios

Soon, almost all enterprises will be digital. The smart, quick running start-ups of today will start to feel the pains of maturity as they expand the range of activities that they are involved in and the markets in which they operate. The old world survivors which have adapted will also feel the pain as their IT or should we now say Digital Estates become increasingly complex.

As this happens, many of them will start to appreciate the need for Portfolio Management of their Digital Assets. The constant churn of Digital as Usual (DAU) means that almost everything will be obsolete or approaching obsolescence and business requirements will keep changing. Enterprises will need to continuously assess their portfolio and prioritise improvements, changes and rationalisation, as well as the response to threats and changing legislation as governments react to Digital Disruption in a number of ways.

Anyone responsible for providing Digital Services to their enterprise needs to be able to deal with this and the complexity which lies underneath, so that they can spend wisely and assign resources for the most optimum effect. To do this requires a high degree of collaboration with other business functions to ensure that a balanced and appropriate approach is taken. This is where Digital Asset Portfolio Management (DAPM) comes in.

At its very simplest, DAPM is about Business Quality, Technical Quality and Affordability. These 3 things need to be monitored and continuously managed through the layers of a Digital Product. The key layers being Customer & Business Environment, End-to-End Product Process, Applications, Data, Infrastructure (cloud, virtual &/or physical).

Changes in Customer expectations, business trends, legislation etc. can impact the overall Digital Product's relevance, market fit and legality. This is a major aspect of business quality and will imply the need for change to End-to-End Product Processes. Although Product Processes may also be impacted by other issues such as changes in volume, ability to deal with increasing product complexity, scarcity of resources or competition (in performance terms) with other products in the market place (i.e. the bench mark suddenly shifts and your process has been left behind). Likewise, applications may fail to keep pace with changing needs. Data may become corrupted or inadequate due to poor information management or a bad fit between the data and the real needs of the business. Infrastructure gradually becomes obsolete, difficult to support or integrate, and weaknesses in security become apparent.

All this gets even more complicated if mergers happen and applications become duplicated, or technical strategy changes introduce new technical platforms into the enterprise.

One of the key things that DAPM has to do, is identify all the major components required to deliver a digital product (including containers and serverless functions) and keep track of their condition and costs. This allows the calculation of unit costs to support a product transaction and enables investments to be assessed in terms of not just impact on quality and effect, but also the on cost of supporting a product.

A mature digital organisation needs to build DAPM into its budgeting and planning activities, and use this to inform its technical strategy. Alternatively, businesses with a huge legacy problem who want to transition to digital, may need to use DAPM to identify and prioritise which applications need to be retired, replaced or upgraded to enable their move.

However you look at it DAPM is an essential digital practice.