Category Archives: Technology

Poking the Box for Innovation

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Poking the Box for InnovationOne of the best ways to challenge people’s thinking and get a group moving in a direction towards innovation is to get the group to define the box.

Of course a million and one innovation and creativity consultants will endlessly drone on about thinking outside the box, but how can think outside the box if you’re not first clear on what the box looks like that you’re trying to think outside of?

When I speak about poking the box, I’m not doing so in the Seth Godin ‘take a risk’ sense, but from the perspective of wanting people to visualize themselves standing in the box, giving a voice to what each of the six main sides are for the context in which you’re trying to innovate.

Start by making a list of the top six assumptions/constraints that we all make in this context:

  1. Assumption/Constraint
  2. Assumption/Constraint
  3. Assumption/Constraint
  4. Assumption/Constraint
  5. What does success look like in this context? — or alternatively, another Assumption/Constraint
  6. What does failure look like in this context? — or alternatively, another Assumption/Constraint

I’d like to thank innovation colleague Ton Verbeek for sharing the following video which looks at the ‘box’ of ground transportation and what happens if you shift from a 2D approach to ground transportation to a 3D approach:

So, what are the assumptions in ground transportation?

What are the constraints?

What does success look like in ground transportation?

What does failure look like in ground transportation?

How has the designer who created this video poked the box?

How has the designer explored the walls of the box and proposed pushing some of them outwards?

Which other assumptions or constraints could be challenged in ground transportation and what characteristics would potential solutions have in order to push a particular wall outwards?

As an example, I would say that the assumption the designer has challenged here in the context of ground transportation is the following:

— Must make efficient use of land to transport the maximum amount of people and goods

What other walls of the ground transportation box could and what would that look like?


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Who is the Innovator? Amazon or Kroger?

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Kroger ClickList

Now, first of all, Kroger is a Cincinnati-based company not a Seattle-based company, so it is only natural that I should hear more about the things Amazon is experimenting with than those of Kroger, owners of a portfolio of grocery brands, including: Ralphs, Fred Meyer, QFC, Kroger, fry’s, Food4Less, King Soopers, Harris Teeter, and more.

Amazon has been making a lot of noise with some of their experiments lately, including a convenience store concept where eventually you will be able to pick up what you want to buy and then automatically be charged for your acquisitions on the way out the door. It is called Amazon go and is currently being tested in an employees-only store. Here is what it looks like:

And then of course Amazon has been experimenting with the last mile experience in grocery retailing for a while now with Amazon Fresh grocery delivery business in a few U.S. states along with London, Berlin, and Tokyo. Now they are also experimenting with a grocery pickup service. You can pickup your groceries in as little as 15 minutes after ordering. It’s available exclusively for Prime members in a testing phase beginning in Seattle.

Now, the past couple of weeks I’ve been noticing at one of my local Fred Meyer’s and one of the neighborhood QFC’s some workers doing some construction projects and I wasn’t sure exactly what they were up to, but today it became clear that they’ve been busy prepping for to enable Kroger ClickList at those locations, which is basically the same thing as AmazonFresh Pickup, EXCEPT that Kroger started doing this TWO YEARS AGO and scaled it to 500 locations in less than 17 months. If you’re curious, here is what Kroger CLickList looks like:

And yes, Walmart, not to be outdone, also has a grocery pickup service as well (which they started a little over a year ago).

For what it’s worth, if these companies were to combine this service with improved ready-to-eat meal offerings like we used to regularly utilize from Waitrose and Tesco so that people can pickup their groceries and a dinner they can eat right when they get home and this will really catch on. Now for those of you who haven’t experienced ready meals in the UK, then check out the following links to get a tastier idea:

— Waitrose Ready Meals
— Tesco Ready Meals

Waitrose Lasagne

So, Amazon is getting a lot of buzz around their Amazon Go and AmazonFresh Pickup experiments, but they are just that at this point. Meanwhile, Kroger and Walmart have already scaled some of these experiments, so who is the innovator here?

Just another reminder that anyone can innovate, that it is customer insight not technology that drives innovation, and that every company is a technology company whether they like it or not.

Keep innovating!

Innovation Audit from Braden Kelley

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Consulting Industry Faces Threat From Artificial Intelligence

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Consulting Industry Faces Threat From Artificial Intelligence

by Braden Kelley

Previously I explored the value of eminence and thought leadership to consulting firms, and how unfortunately the power of inbound content marketing has a dark side that forms part of a three-pronged attack on the consulting industry.

Meanwhile, the tireless invention and innovation efforts of research teams in companies around the world have helped to keep the pace of technological advancement in computer processing power at or above Moore’s Law for several decades. This has given technology companies the ability to put more computing power than the entire Apollo space program into the pockets of more than a billion people around the world.

It seems like everything has become digital, including music, books, and even movies. Increasingly intelligent digital technologies and mercurial customer expectations threaten both people and enterprise at every turn. With all of this technological change, the last few decades have been an amazing time for consultancies, full of revenue and opportunities. Clients desperate for solutions to help them cope with these challenging times helped management consulting firms grow in size and scale, expanding to cover multiple technology, and even marketing, specialties.

But the same technologies that have led to the growth of consulting companies over the last couple of decades, will begin to lead to a shrinking of those same consulting firms. The increasing diversification of the large global consultancies into other specialties is the first step to what is an inevitable shrinkage forced upon the industry by the three factors I detailed in my last article titled Consulting Industry Caught in the Crossfire.

The same forces that are causing a feeling of disequilibrium for the firms that consultancies serve are also causing the same unease, trepidation and challenge for the consulting firms themselves as they find themselves attacked on three sides from:

1. Increasingly Available Intellectual Property
2. Internal Consultants
3. Artificial Intelligence

In my previous article on the Consulting Industry Attacked on Three Sides I looked at each attack in turn, but in this article I would like to dig a bit deeper into the final threat.

Artificial Intelligence

Roboadvisors, chatbots, and other implementations of artificial intelligence have captured people’s imaginations and led to both an increase in the number of articles written about artificial intelligence, but also in the practical implementations of artificial intelligence. People are becoming increasing comfortable with artificial intelligence thanks to the recommendation engines on Amazon and Netflix and IBM Watson’s appearance on the game show Jeopardy and battles against chess grandmasters.

But what does consulting have to fear from artificial intelligence?

Perhaps viewing this short video might give you a glimpse:

In the short run, maybe consultants don’t have as much to fear from artificial intelligence as workers in transportation, retail, or manufacturing. But, in the grander scheme of things, over time enterprising technology vendors will inevitably build upon publicly available artificial intelligence frameworks made publicly available by companies like Microsoft and Google (who are seeking to increase the sale of cloud services) to automate some of the tasks that recently minted undergraduate analysts or Indians perform now for the large consulting firms.

What we are starting to see is exactly what Roger Martin described in his landmark book The Design of Business, from which I would like to highlight one of the key concepts called The Knowledge Funnel highlighted in the image from the book below.

Is Jack White's Lazaretto Ultra LP a Vinyl Innovation?Source: The Design of Business by Roger Martin

The key point here is that as we understand our business and our interactions with our customers well enough, what was once a mystery we start to identify patterns inside of (heuristics), which then eventually allows us to create algorithms that can be captured in Standard Operating Procedures (SOP’s) and then eventually in code. The power of artificial intelligence is the ability to move the role of the machine to the left in The Knowledge Funnel, away from pure manual coding by a human, to computer programs that write themselves and eventually to heuristic identification and algorithm creation at some point in the near future. This is what crowd computing, machine learning and deep learning ultimately make possible, and which I explored in a previous article titled Welcome to the Crowd Computing Revolution in more detail. The fact remains that as computer programmers and the artificial minds they create become more adept at watching the work that consultants do and recognizing the patterns in their recommendations, the pressure on consultancies will build.

Conclusion

These are challenging times for large consultancies and small independent consultants as consultancies are forced respond to these attacks from three sides. Part of that three-pronged attack will come from a growing legion of automation engineers taking to cubicles around the world to design people out of jobs. In the same way that mechanical engineers build robots to replace our human muscles with machine muscles, automation engineers are computer programmers tasked with creating inexpensive machine minds with sufficient artificial intelligence to replace our more expensive human minds. Professions like that of the automation engineer will attract increasing numbers from workforces around the world, but not nearly enough to offset the losses in job opportunities that these individuals are tasked with eliminating. Only time will tell how quickly and how broadly artificial intelligence (AI) threatens the core business of consultancies.

If you are in the consulting industry, what is your strategy for responding to this threat?

Because, make no mistake, the threat is real. The only question is how quickly it will materially impact your bottom line.

BONUS:

You might enjoy this interview with David Cope, the creator of Emi (Emily Howell) the algorithmic composer, whom he later killed:

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Consulting Industry Being Attacked on Three Sides

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Consulting Industry Being Attacked on Three Sides

by Braden Kelley

The worlds of employment and business are becoming increasingly turbulent as the stability of the enterprise grows ever shorter, the loyalty of the enterprise to its people faces extinction, and the wealthy countries of the world stand at a precipice of overhanging debt. Increasingly intelligent digital technologies and mercurial customer expectations threaten both people and enterprise at every turn.

One would suppose that this would be an amazing time for consultancies, full of promise and opportunities. One would imagine that clients desperate for solutions that help them cope with these challenging times would be banging down the doors of consulting firms outbidding each other to the firm’s next client.

But that is not the reality…

Because, the same forces that are causing a feeling of disequilibrium for the firms that consultancies serve are also causing the same unease, trepidation and challenge for the consulting firms themselves.

The fact is that the consulting industry is being attacked on three sides:

  1. Increasingly Available Intellectual Property
  2. Internal Consultants
  3. Artificial Intelligence

Let’s look at each threat in turn:

1. Increasingly Available Intellectual Property

In my last article, “Thought Leadership Builds Firm Value”, I wrote about the importance of thought leadership in today’s digital age and its role in helping to drive inbound sales leads.

Hiring a consultancy, even for a small project, is a big expenditure for most companies, something that requires several levels of approval before the project can begin. Given that, company employees take to the Internet to build their consideration set and to do their research into how each company thinks and who seems to be the leader in the space where they need help. For help with building an innovation or digital transformation strategy or process, often they find me.

The way that company employees find the companies they will include in their consideration set, and the individual (or firm) they will ultimately hire, is by finding and evaluating thought leadership created by consultants like myself who are good at creating frameworks and other tools aimed at simplifying complex concepts (referred to as eminence by some firms).

Because the discovery and evaluation of thought leadership by potential customers is a key way that independent consultants and advisory firms attract new business, and because it is easier than ever to create and share thought leadership while simultaneously becoming an increasingly important factor in the buying process, independent consultants and advisory firms are creating more pieces of thought leadership and eminence than ever before.

On the plus side, thought leadership and eminence help independent consultants and advisory firms to win business. The down side however is that in much the same way that kids in Hawaii have learned how to become professional surfers by watching YouTube videos, as advisory firms create more thought leadership and make it publicly available to win new business, they also stand to lose an accelerating amount of new business as well. The reason is that the proliferation of eminence and thought leadership will inevitably lead to:

  1. Increasing numbers of line managers feeling that they know enough to tackle the challenge themselves that they might have otherwise outsourced to a consulting firm
  2. Increasing numbers of senior leaders deciding that someone inside their company could spin up and lead an internal consulting group

2. Internal Consultants

Let’s face it, whether we like it or not, an increasing number of senior leaders are becoming fed up with spending $500/hr on newly minted MBA’s from McKinsey, Bain, BCG, etc. when they could hire them on full-time for $75-100/hr by taking one of their promising senior leaders and having them spin up an internal consulting group.

Many companies have already created internal consulting groups to handle the bulk of their strategic project work in order to either:

  1. Save money
  2. Increase responsiveness
  3. Increase speed to market
  4. Keep the knowledge gained from such projects readily accessible
  5. Create and retain a competitive advantage

For me, reason number five is potentially the most compelling reason because it is impossible to expect any large consulting firm to unlearn the insights they acquire on one consulting project and not leverage them on a subsequent project with a competitor somewhere down the line. Doing projects with your competitors is how a great deal of industry expertise is gained by large consultancies, and this expertise is one of the primary reasons that managers hire a consulting firm.

3. Artificial Intelligence

Roboadvisors, chatbots, and other implementations of artificial intelligence have captured people’s imaginations and led to both an increase in the number of articles written about artificial intelligence, but also in the practical implementations of artificial intelligence. People are becoming increasing comfortable with artificial intelligence thanks to the recommendation engines on Amazon and Netflix and IBM Watson’s appearance on the game show Jeopardy and battles against chess grandmasters.

But what does consulting have to fear from artificial intelligence?

In the short run, maybe not a lot. But, in the grander scheme of things, over time enterprising technology vendors will inevitably build upon publicly available artificial intelligence frameworks made publicly available by companies like Microsoft and Google (who are seeking to increase the sale of cloud services) to automate some of the tasks that recently minted undergraduate analysts or Indians perform now for the large consulting firms.

Conclusion

These are challenging times for independent consultants as they respond to these attacks from three sides. Only time will tell how quickly and how broadly artificial intelligence (AI) threatens the core business of consultancies. The internal consultancy threat is real and growing in scope and threat. What may have started in Project and Portfolio Management (PPM), Six Sigma, Lean and Agile practices in some organizations, is quickly expanding into other Operational Excellence areas and even into Innovation, Digital Transformation, and traditional Strategy. Increasingly available intellectual property poses a Catch-22 for consultancies as a refusal to participate in the creation of eminence and thought leadership will lead to less business in the short-term, but doing so will certainly over time lead to an overall reduction in the size of the market for consulting services. Some consultancies are responding by diversifying their service offerings, attempting to create consulting superstores. What will be your response to this attack from three sides?

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FedEx Not Keeping Pace

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FedEx Not Keeping PaceFedEx took the shipping world by storm about forty years ago, growing to become the defacto shipping leader, unseating UPS and DHL. But, then after thirty years of strong growth they began to lose their mojo. In 2003, in a reaction to UPS’ acquisition of Mail Boxes Etc., FedEx announced they were buying Kinko’s, a large United States based copy center chain. For me this showed that FedEx was beginning to lose its way, and it appears their connection to customer expectations and the current capabilities of technology is failing. For a company based on the promise of speed, FedEx is becoming increasingly slow.

Increasingly frustrated with the performance of FedEx, Amazon has increasingly turned to the United States Postal Service to deliver its packages, striking a special deals with USPS to even deliver packages on Sunday. And now, Amazon is beginning to buy trailers so they can potentially contract directly with truck drivers to help them move inventory from one distribution node to another.

And for me, my latest FedEx misadventure is a perfect example of why FedEx is now in trouble and at risk of falling from its perch. Here’s what’s happened so far.

  1. I ordered a new laptop from HP that was supposed to arrive in three (3) days on Saturday, July 9th
  2. On Saturday, July 9th I received no contact from FedEx or estimate for when my package might be delivered
  3. On Saturday, July 9th FedEx attempted to deliver the package when we weren’t home
  4. For some reason FedEx then determined they were going to wait THREE DAYS before attempting re-deliver the package
  5. On Tuesday, July 12th I received no contact from FedEx or estimate for when my package might be delivered
  6. On Tuesday, July 12th FedEx despite someone being home nearly all day, FedEx attempted to deliver the package when we weren’t home
  7. On Wednesday, July 13th I received no contact from FedEx or estimate for when my package might be delivered
  8. On Wednesday, July 13th FedEx despite someone being home nearly all day, FedEx attempted to deliver the package when we weren’t home
  9. On Thursday, July 14th I received a missed call and voicemail from FedEx
  10. On Thursday, July 14th I attempted to call the FedEx number given and nobody answered the phone, got voicemail and left message
  11. On Friday, July 15th the Web site indicated that package would be delivered again that day, but no delivery came
  12. On Friday, July 15th I called FedEx and got voicemail
  13. On Friday, July 15th I called FedEx again and got a person, hooray! But, the person said my only option was to drive a fair distance to come pick it up or have it delivered to a FedEx location near me.
  14. On Friday, July 15th I chose to have the package delivered to my local FedEx location (a Kinko’s about 5-10 miles away) under the impression it would be available Saturday, July 16th at this location for my pickup and that they would probably call me after it arrived
  15. On Saturday, July 16th I went to the Kinko’s around 7pm figuring that it must be there by that time (How long could it take to ship a package 15-20 miles from one FedEx location to another?)
  16. On Saturday, July 16th at the Kinko’s the employee was unable to find the package
  17. On Saturday, July 16th at the Kinko’s the employee was unable to get any information from their systems because they were down for maintenance
  18. On Saturday, July 16th at the Kinko’s the employee was able to call and using a voice response system get a Tuesday, July 19th delivery estimate to their location
  19. On Monday, July 18th I received a postcard from FedEx saying they had tried to deliver my package three times and to contact them (NOTE: this was a very confusing postcard, not obvious what to do)
  20. On Tuesday, July 19th I received a phone call from the FedEx Kinko’s store saying they had my package, and I picked it up a few hours later after they used my name (no technology) to search a pile of packages in the back

VERY BAD EXPERIENCE – I got my package TEN DAYS AFTER I was supposed to get it, and nearly two weeks after I ordered the laptop.

Inaccurate information on the web site, poor customer service, bad technology, slow resolution…

These are all signs that this logistics company has gone off track and has not kept pace with the capabilities of technology today.

There is no reason why FedEx shouldn’t have been able to:

  • Show me online exactly where my package is
  • When FedEx is estimating it to be delivered based on the packages loaded on the truck and the planned route
  • Offer me the opportunity to select an alternate delivery time or date or location if the likely delivery time doesn’t work for me

This would be customer service.

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Microsoft’s Seeing AI Glasses

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Microsoft Seeing AI Glasses

Saqib Shaikh lives is blind, lives in London, and is a core Microsoft developer. He lost the use of his eyes at age 7. Saqib found inspiration in software development and is helping build Seeing AI, a research project helping blind or visually impaired people to better understand who and what is around them. The app is built using intelligence APIs from Microsoft Cognitive Services.

Pretty amazing that an app can use a camera to capture an image or a video feed, and using artificial intelligence, to analyze the scene and vocalize to the user what it sees. In this example this is being done for the benefit of a human user, but imagine what could be possible if one computer program is used to serve instead, another computer program as the user of the analysis. What might that make possible?

How might you or your organization make use of technology like this?

What direction do you think technology like this will take?

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What April Fool’s Day Teaches Us About Innovation

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What April Fool's Day Teaches Us About Innovation

April Fool’s Day was this week. Did anyone have a good prank played on them or come across a good corporate April Fool’s?

My favorite this year was from my alma mater, the University of Oregon. Go Ducks!

We try to think a little differently at the University of Oregon and specialize in helping the world run a little faster (and more comfortably), and with some of Nike’s founder behind the football team, why shouldn’t they have the world’s most advanced field, say, an LED field?

Watch the video:

The best corporate April Fool’s Day pranks are the ones that are believable and almost seem feasible.

What does this tell us as innovation professionals?

The insight is that the best corporate April Fool’s Day pranks find a resonance point, a place where the outlandish intersects with what people are ready for, what they may actually desire, and what they believe should be possible soon.

Consider asking your innovation teams to design their own April Fool’s Day prank and see where it takes you.

Ask yourself questions like these about their designs:

  • What must be true for this to be possible?
  • What stands in the way of this being possible?
  • What would it take to remove the barriers that are preventing this from being possible?
  • Are our customers truly ready for this?
  • What would it take to prepare them for it?
  • What capabilities do we need to build to prepare for this eventuality?
  • Is this idea more feasible in a different context? (i.e. basketball courts instead of football fields)
  • Etc.

One final thought…

Is there any reason why the field shown in the University of Oregon LED field video couldn’t become a reality?

Why couldn’t it be built out of some of kind of fiber optic material that maintained both the sports performance characteristics and the multi-color transmission capabilities?

Would it be easy to design such a thing? No. But it seems possible, and that’s where innovation begins…

Keep innovating!

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Service Redesign – Lost T-Mobile Smartphone

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Service Redesign - Lost T-Mobile Smartphone

Given the health risks of carrying a smartphone (or any kind of mobile device) too close to the body for extended periods, I try to always remove electronic devices from my pockets whenever I can. For ten years this has never caused a problem until Saturday. This marked the first time in more than a decade that I walked off and forgot my smartphone.

Now I’ve had the joy of reporting my lost phone to T-Mobile and getting a less than helpful response. Not because the agent I spoke with didn’t try to be helpful, but because the customer service representative was trapped inside of a service experience that wasn’t designed to meet the goals of the customer.

First I must mention that I don’t have a find my phone type app installed on my phone because I don’t like the idea of someone tracking me all the time. Second, yes, I know that even with location awareness or GPS turned off that my phone is being tracked anyways, but I still like to maintain the illusion that my every move isn’t being tracked. So, please humor me.

The fact is that T-Mobile could tell me exactly where my phone is even without such an app, but then they would have to breach the illusion and admit that they’re always tracking where every phone is at all times. Not such a good customer experience.

Redesigning the Lost Smartphone Experience

I’m only one person so this list won’t be as good as if I was working on this with a small team and prototyping with customers, but let’s ignore that for now and try to come up with a list of customer goals (and thus opportunities to delight) in the lost smartphone scenario:

  1. I don’t want someone to use my phone after I lose it to make calls that I’ll have to pay for (international calls, premium calls, etc.)
  2. I don’t want someone to buy anything (apps, music or other content that I’ll have to pay for)
  3. I don’t want someone to call my contacts
  4. I don’t want someone to use my apps and make in app purchases
  5. I don’t want someone to use my texting function (SMS) – read, send, etc.
  6. I don’t want someone to use my email – read, send, etc.
  7. I don’t want someone accessing my photos
  8. I don’t want someone to steal information about my contacts
  9. I want to be able to call my phone to try and speak with the person who found it so I can try and get it back
  10. I want the person to be able to call me or T-Mobile to let me know that they’ve found my phone

In short, I don’t want someone who finds my phone to be able to do anything other than contact me to let me know when and where I can come pick it up.

But, when I called to T-Mobile to report my phone lost the only option was to have the phone disabled. Prior to doing so, calling my phone was going straight to voicemail, and maybe I should have left a voicemail, but I didn’t, I thought I would try again later. After they disabled my phone, instead of getting voicemail I got a message saying the phone has been reported lost and that I wouldn’t be able to leave a voicemail. This is partially helpful, but not completely. Now I can’t call the phone and if someone has found the phone, they can’t try to contact anyone to arrange a pickup.

T-Mobile has met goal #1 (and possibly #2-4), but likely they could access #5-8 (able to read but probably not to send).

But, there are many other goals that have not been met. Most importantly, T-Mobile has actually made it less likely that I will get my phone back because I have no way of communicating with the person who may have my phone.

What could T-Mobile do to make this experience better?

Simple.

When a phone is reported lost, T-Mobile should make it so that the phone can only call T-Mobile. If the person calls, then T-Mobile knows which number is calling, can get information from the caller to connect the two parties to arrange a pickup, and pass on the contact details to the subscriber via pre-arranged methods.

Second, T-Mobile should allow designated numbers to call the phone, so that the subscriber can try to get in touch with whoever found the phone.

Third, T-Mobile could call the phone every 15-30min with a robot until someone answers and connect them with a T-Mobile representative.

These three small changes to their lost phone service design would make an immediate positive impact in the customer experience for thousands of customers.

How else could T-Mobile make the experience better?

Image credit: easyhacker.com

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Why Change is Accelerating

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Why Change is Accelerating

In previous articles I’ve spoken about how the pace of change is accelerating, and how for many people (and organizations) things are changing so fast that they feel overwhelmed and that things may be changing faster than some of us humans are able to absorb. I’ve spoken about how we are in the middle of a period of discontinuity thrust upon us by the rapid advances in computing and mobile connectivity that have put a supercomputer in everyone’s pocket and a target on most organizations’ backs.

Why are things changing so fast?

Is it that we’ve hit some sort of inflection point never achieved before in human history that is allowing us to innovate and displace the status quo faster than ever before?

Maybe.

Have we reached some sort of perfect storm where the innovation curve has gone vertical and the singularity will be here tomorrow?

Probably not.

So if we are not necessarily innovating faster than ever before or destined to reach the singularity tomorrow and become one with machines, then what is creating the feeling that things are changing more rapidly?

One word…

“Expectations”

Changing Customer Expectations

It feels as if the world is changing faster than ever before because the expectations of our customers and our expectations as customers are changing faster than ever before. Why?

Because we as consumers are seeing better customer experiences enabled by digital technologies in parts of our personal lives and more efficient and effective business processes in parts of our business lives, we are now expecting every organization (not just companies) and every aspect of that organization to deliver an efficient, effective experience and information exchange in whatever channel we choose, whenever we want to experience it.

This incredible change in expectations is being thrust upon all organizations simultaneously and threatening the very existence of entities that have existed for dozens or even hundreds of years. This discontinuity has created immense technical debt for organizations large and small to overcome and the only way for an incumbent organization to recover and to survive in this new digital age will be to undergo a complete digital transformation.

This doesn’t mean creating a digital strategy to address one part of the organization or a single constituency, but a path to a complete transformation that brings digital approaches to both every part of the organization and its operations, but also to all of its constituencies, at the same time. This means re-imagining every system, every policy, every procedure, and every process as a digital native organization looking to enter and disrupt your industry might, and then make a plan for transforming yourself. This will require IMMENSE amounts of change, and is no small task given the 70% change failure rate, but it is the key to your organization’s survival.

The problem is that the organizational change thought leadership status quo isn’t up to the task of planning and executing the scope and scale of change required for existing organizations to survive the digital evolution underway. A new set of tools is needed. My new book Charting Change and the accompanying Change Planning Toolkit™ were designed to inspire a change revolution to free people from the tyranny of the blank word document and poorly planned change efforts.

Why the Pace of Change is Accelerating

Economics 101

Because the challenge we face is not a static one. Organizations that focus on catching up to where the customer is today and wedging their efforts into existing budget constraints are those that will find themselves falling further behind the curve of changing customer expectations.

No longer is it a victory to be seen by customers as ‘best in class’. No, now customers are expecting every organization to be ‘world class’. This means that increasingly customer satisfaction will be achieved only by providing one of the best experiences in the world. Talk about changing expectations!

And so given the time to develop new technology solutions, you should be aiming not to incrementally improve your current experience to get closer to the leaders in your industry, but instead investing in a solution that will anticipate what the best customer experience allowed by technology 12-18 months from now and start building that instead.

It’s Economics 101 all over again. In today’s reality, as most organizations seek to move up the customer experience supply curve, the customer experience demand curve is constantly shifting outward, leading your share of the market to wither and die unless you make the strategic investment required to actually shift your customer experience (CX) supply curve outward as well.

I’ve tried to capture the scenario in the figure above titled ‘Why the Pace of Change is Accelerating’. Most organizations when they see at Time0 that their level of customer experience is below Customer Expectations0 they invest in projects to increase their CX Supply0 up the CX Supply curve to CX Supply1 thinking that they will then be meeting the customers’ level of expectations at Time1. But that’s not how it works in the digital world of today, as customer expectations are changing (shifting upward) just as fast as the technology used to create better customer experiences. So, organizations that invest in moving up the CX Supply curve to catch up with current customer expectations find themselves continuously falling short of future customer expectations.

Conclusion

The reason nearly every organization follows this approach of climbing the CX Supply curve to close the gap on customer expectations is usually financial. Most managers are forced (or compelled) to try and close the gap with existing budgetary resources and by creating a digital strategy as part of these efforts. Very few organizations have visionary leaders willing to invest in a digital transformation and fundamentally re-think the architecture and capabilities the organization needs to successfully compete in a digital age. Very few organizations see how to properly use technology to fulfill the mission of the organization and to exceed customer expectations, and as a result create a shift outwards in the CX Supply Curve itself.

Choosing not to digitally transform your organization, creates the space in the market for new digital native organizations to enter and establish a beachhead and attack the incumbents.

At the same time, as our world and organizations continue to digitize this will result in decreasing variable costs and increasing fixed costs, leading to increased consolidation in many fragmented industries. Those organizations bold enough to invest in shifting their customer experience supply curves outward by undergoing a true digital transformation will improve their position to be a buyer instead of a seller as this consolidation occurs. So the real question is…

If we are living in an era of survival of the digital fittest, which side of the digital evolution do you want to be on?

I hope you’ll join the change revolution, get your copy of Charting Change today and check out the Change Planning Toolkit™!

Image credit: Winggz.com

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Digital Transformation versus Digital Strategy

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by Braden Kelley

In my last article, Digital Transformation Matters, we looked at the accelerating pace of change, the case for digital transformation, and our evolving interactions with technology. We also asked a simple question:

Are you ready to do business in a digital way for the digital age?

In our digital age all companies must change how they think, change how they interact with customers, partners, and suppliers, and change how the business works inside. Customer, partner, and supplier expectations have changed and a gap is opening between what they expect from their interaction with companies, and what those companies are currently able to deliver. Companies must immediately work to close this expectation gap or the entire business is at risk.

There are groups of digital natives out there that are extremely capable, have greater access to capital than ever before, and are very likely to re-imagine your business and your entire industry from the ground up if you don’t start making the necessary changes in your business to eliminate the opportunity.

If they attack, they will do it with a collection of digital strategies that utilize the power of the digital mindset to more efficiently and effectively utilize the available people, tools and technology, and to design better, more seamlessly interconnected and automated processes that can operate with only the occasional human intervention.

To defend your company’s very existence, you must start thinking like a technology company or go out of business. Part of that thinking is to fundamentally re-imagine how you structure and operate your business. You must look at your business and your industry in the same way that a digital native startup will if they seek to attack you and steal your market. To make this easier you can ask yourself five questions:

  1. If I were to build this business today, given everything that I know about the industry and its customers, and given all of the advances in people, process, technology and tools, how would I design it?
  2. From the customers’ perspective, where does the value come from?
  3. What structure and systems would deliver the maximum value with the minimum waste?
  4. What are the barriers to adoption and the obstacles to delight for my product(s) and/or service(s) and how will my design help potential customers overcome them?
  5. Where is the friction in my business that the latest usage methods of people, process, technology, and tools can help eliminate?

There are of course potentially other questions you may want to ask, but these five should get you most of the way to where you need to go in your initial strategic planning sessions. If you have other key questions that you think I’ve missed, please add them in the comments.

Digital Strategy vs. Digital Transformation

But how much appetite for going digital do you have?

This is where the question of digital strategy versus digital transformation comes in.

The two terms are often misused, in part by being used interchangeably when they are in fact two very different things.

A digital strategy is a strategy focused on utilizing digital technologies to better serve one particular group of people (customers, employees, partners, suppliers, etc.) or to serve the needs of one particular business group (HR, Finance, Marketing, Operations, etc.). The scope of a digital strategy can be quite narrow, such as using digital channels to market to consumers in a B2C company, or broader, such as re-imagining how marketing could be made more efficient through the use of digital tools like CRM, marketing automation, social media monitoring, etc. and hopefully become more effective at the same time.

Meanwhile, a digital transformation is an intensive process that begins by effectively building an entirely new organization from scratch utilizing:

  • All of the latest DIGITAL TECHNOLOGIES (artificial intelligence, predictive analytics, BPM, crowd computing, etc.)
  • The latest TOOLS (robotics, sensors, etc.)
  • The latest best practices and emerging next practices in PROCESS (continuous improvement, business architecture, lean startup, Business Process Management (BPM), crowd computing, and continuous innovation using a tool like The Eight I’s of Infinite Innovation™)
  • The optimal use of the other three to liberate the PEOPLE that work for you to spend less time on bureaucratic work and more time imagining the changes necessary to overcome barriers to adoption and obstacles to delight through better leadership methods, reward/recognition systems, physical spaces, collaboration and knowledge management systems, etc.

And ends with a plan for making the transformation from the old way of running the business to the new way.

The planning of the digital transformation is of course all done collaboratively on paper, whiteboards, and asynchronous electronic communication (hopefully not email, but more on that later). The goal is to think like a digital native, to think like a startup, to approach the idea of designing a company to utilize all of the advances in people, process, technology and tools to kill off your own company (at least as you know it). Because, if you don’t re-invent your company now and set yourself up with a new set of capabilities that enable you to continuously re-invent yourself as a company, then some venture capitalist is going to see an opportunity, find the right team of digital natives, and give them the necessary funding to enter your market and re-invent your entire industry for you.

It’s All About the Interfaces

People are fascinated with startups like Uber and with good reason because they have changed the lexicon and the way that we think about entire categories of products and services. Whether or not you believe there is causation, the fact remains that Yellow Cab in San Francisco filed for bankruptcy, and that Uber has placed an immense amount of pressure on taxi and airport limousine companies. But you should also be looking at what established technology companies like Amazon are doing because established technology companies are looking for growth and new markets too, and they might decide yours looks attractive, so you have to think like a technology company or go out of business.

One way that technology companies differ from non-technology companies is that they naturally focus on the interfaces, because that is where complex systems often fail. And so, if you are pursuing a digital strategy on your way to a digital transformation, you must first pick an interface, and then optimize the experience at that interface. It could be the interface between the company and customers, it could be the company to employee or employee to employee interface, or even the company to partner or company to supplier interface. Whatever interface you choose, your goal is to ultimately look at that interface with a fresh modern lens, and then utilize all of the latest (and emerging) approaches from a people, process, and technology perspective, to create a more efficient and more effective (aka better) experience.

The better job you do as an organization at removing friction at the interfaces, the more likely you are to become a partner of choice, supplier of choice, employer of choice, and/or a brand of choice. The value of becoming any or all of these could be the difference between the survival and growth of the organization, and a slow, agonizing death at the hands of a new, digital entrant or a digitizing incumbent that completes a digital transformation before your leadership team can agree it’s even necessary.

Architecting Your Organization for Change

One thing that both a digital strategy and a digital transformation have in common is that they will inflict change (in varying amounts) upon the organization, and with a more visual, collaborative approach to planning that change – like that enabled by the Change Planning Toolkit™ that I introduce in my new book Charting Change (available February 24, 2016) – you will increase your odds of beating the 70% change failure rate and of successfully achieving your digital change goals.

As you plan your change efforts it helps if you keep in mind the Five Keys to Successful Change™ and that you consider Architecting Your Organization for Change. Below you will see visualizations of both concepts and both are available as free downloads from the Change Planning Toolkit™, which is a collection of frameworks, worksheets, and other tools (including the Change Planning Canvas™).

Five Keys to Successful Change 550

Architecting the Organization for Change

Click to access these frameworks as scalable 11″x17″ PDF downloads

These two frameworks will help you take a more holistic view of organizational change wider than just change management or change leadership, and helps organizations:

  1. Visualize a new way to increase organizational agility
  2. Integrate changes in the marketplace and customer behavior into the strategy
  3. Create a new organizational architecture that integrates all five elements of organizational change
  4. Make project, behavior and communications planning and management a central component of your change efforts
  5. One thing that should immediately jump out as you look at the Architecting the Organization for Change framework is that The Five Keys to Successful Change™ are embedded it.

Change Maintenance forms the foundation of a change-centric organization, ensuring that the changes necessary to ensure a healthy firm continue to persist (or are “maintained”), while the top of the organizational pyramid is driven by a conscious strategy that evolves over time, informed by changes in customer behavior and changes in the marketplace.

The strategy of the firm then determines the appropriate business architecture, and as the organization’s strategy changes, the business architecture may also need to change. Any necessary changes in the architecture of the business (new or updated capabilities or competencies) then will lead to modifications to the portfolio of change initiatives and projects (and remember every project is a change effort). These projects and initiatives will consist of innovation initiatives and efforts to create positive changes in the operations of the business.

The change efforts and projects identified as necessary and invested in as part of the change portfolio then represent projects that impact the innovation and operations for the firm, and in order to successfully execute them in the short term includes change planning, management, and leadership, and in the longer term the maintenance of the required changes.

And for the change efforts and projects to be successful the organization must also focus on project planning and management, behavior planning and management, and communications planning and management. The related projects, behaviors, and communications must all be effectively planned and managed in a way that keeps all three in sync.

I hope you see that by increasing your focus on the Change Planning discipline and through increased use of tools like the Architecting the Organization for Change framework from the Change Planning Toolkit™, your business will be able to more collaboratively and visually plan change efforts as large as a digital transformation or as small as a digital strategy and to increase your organizational agility.

More on organizational agility soon, so stay tuned!

In the meantime, please get yourself a copy of Charting Change as a hardcover (ebook coming soon) and get your free downloads from the Change Planning Toolkit™ (or go ahead and purchase a license now).

Buy the Change Planning Toolkit™ NowNow you can buy the Change Planning Toolkit™ – Individual Bronze License – Advance Purchase Edition here on this web site before the book launches.

This article originally appeared on Linkedin

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