- Gary O'Brien talks about identifying the "degree of fluency" to help organisations get started on the building blocks towards digital transformation.
- How is "fluency" measured and quantified in businesses?
- What helped O'Brien write his book Digital Transformation Game Plan?
- What does a Digital Transformation Game Plan look like?
- Are "big-bang approaches" the best way to transform digitally?
- What does the future IT department look like?
- Where should digital transformation ideally begin within the organisation in order to drive effective change?
Welcome to episode 56 of the Coding Over Cocktails podcast. My name is Kevin Montalbo. And joining us from Sydney. Australia is Toro Cloud CEO and founder, David Brown. Good morning, David!
Good morning, Kevin!
Our guest for today is a business technology leader with over 25 years of experience. He partners with clients as a trusted advisor to help bridge the connection between technology-led business transformation and value delivery. He's the co-creator of the Digital Fluency Model and the co-author of Digital Transformation Game Plan, which we'll be talking about today. We'll also be giving away a copy to one lucky listener, courtesy of O'Reilly, so make sure to stick around until the end of the episode to learn how you can win it. Joining us today for a round of cocktails is Gary O'Brien. Hi, Gary! Great to have you on the show.
Hey, guys! How are you doing?
All right, good morning! So your work at ThoughtWorks allows you to engage with business executives so that they can build the capabilities to become modern digital businesses. So, your LinkedIn bio mentions how a key part of this is identifying the “degree of fluency” that businesses need to form their building blocks towards transformation. So, what is “fluency” in this context?
Yeah, it's interesting because I see you've had James Shore on the program before. And you know, the Digital Fluency Model is absolutely borne out of the Agile Fluency Model. It really came because I spent a lot of time with both technical and business execs, talking about transformation and this kind of gray area between business and IT. And what I learned from that is that no two organisations are the same. No two organisations are going to transform the same way.
And so we did a little bit of research around our current clients and in some of the work we've done over our history and identified these building blocks that seemed to be consistent in modern digital businesses. But probably the key for us was everybody needed the building blocks -- all five of them -- but the degree in which they would use them varied radically.
And so we started to think about how the more important part was not where you are, but where you want to be, and using that as the indicator of what to be investing in. And so when we thought about that, it really reminded us of the Agile Fluency Model. And so we spoke to James, we spoke to Diana [Larsen] and thought about how we could create a model that was at an altitude different to Agile Fluency Model and really looked at organisational transformation.
So, the fluency in this context is the degree or the amount that you need to invest in each of the building blocks of a modern digital business in order to meet your aspired state, your strategy, your outcomes. I guess the counter argument is [that] you can do a maturity assessment or you can do a kind of benchmarking experiment. But that's great if you just want to be what everyone else is, but what we're trying to say is what do you want to be? And based on that, what should you invest in?
You mentioned there’s “five building blocks.” What are the five building blocks?
So, the first is around taking friction out of operating models. That's everything from how strategy turns into execution. “From executive to developer” is a great way to sort of put it. So, how do you take friction out of the operation? How do you streamline the way work flows through the organisation, so that you are better prepared to respond to change? So you can chase value, so to speak?
The second one is around platforms. That classic, kind of building platform models, whether it's an internal platform model and an external platform business or whatever it might be. So just that ability to kind of productise the technology so that you can plug-and-play a lot better.
The third is around product and experience design, just the product mentality, the product thinking. I guess taking technology to the boardroom is a coined phrase that we use a lot around that.
The fourth sort of talks to the data play. So, it's intelligence-driven decision-making, using data in a proactive way. Almost – if you think about it, COVID probably amplified this a little bit, but I think historical information is less important now. I think using historical data is less important. And so, using data as a way to either capture weakest signals of current to make decisions based on, or predicting future to make decisions on. So, that forms that fourth building block.
And then the last one is your classic engineering culture and that kind of route-delivery mindset, that execution, the bias for action that organisations – that modern digital businesses typically take. So they're the five and you know, that's where I say there's some variances as to how much of each of those you would need as an organisation.
And they’re obviously five significant areas representing significant challenges each on their own right. So, when you talk about fluency, how do you quantify and measure fluency? Is it your capability or understanding in each of those areas? Is that what you're measuring?
No. So, what we're really doing is working with the executives. The first part about it is alignment, right? And one of the things that I've experienced a lot is just a disconnect -- either politically disconnected as to what digital transformation means for each of the execs in the same company; or a taxonomy disconnect. What one person thinks we're talking about [and] what another person thinks we're talking about are completely different.
So, the first aspect of fluency is to get the leadership teams onto the same page, with their aspiration for the transformation. “Why are we doing this? What impact is that going to have? What are we going to measure to make sure that we're actually making the changes that we committed to? Who's involved?” Everybody. And “what impact is it going to have on each of the different areas? Let's all agree to that”. And then using the fluency model, you come up with what we call a “fluency pattern.” So, it's a fluency pattern that shows you the “degree of fluency,” which is the same model we use in the Agile Fluency Model.
So, it's from focusing through executing, optimising, and strengthening, and understanding what level you're going to be for each of the building blocks, which creates a pattern. And then that pattern leads to a group of default investments that you should focus on more than others, in order to achieve that, the greatest aspiration.
That's interesting. So, you draw a conclusion down to a priority. So, just explain to me again, how do you get to that conclusion of the priority? Because knowing where to start is I think part of the huge challenge here.
Yeah, and some of it's a bit of a trade-off, David. Let me give you one example. So, funding models, right? It's a bit of a random example, but we all know that modern digital businesses need to use different types of funding models. Like, we know that everybody needs to think about being more fluid in the way you can use money and moving money around the business, which is a really difficult thing, right? To take money from one bucket, put it in another because there's a greater opportunity over there. It is a really hard thing to do. It shouldn't be, but it just is. Now, we all know that you need to improve the way you fund work, fund technology investments.
Now, at a strengthening level, we could go kind of beyond budgeting on it, right? We could just take away budgets, become totally fluid with money, use ratios and we could go all the way down that path. If I take a step back from it, we could do VC (venture capitalist) funding. It could be like a bidding and you bid for value at whatever. You take a step back from that. And it could just be incremental funding. So, we're going to allocate $20 million for the project. Here's the first five, go and show me what you can do. Once you've achieved something, we'll give you the rest. All the way back to, “Do not change my funding model.”
So there's a tolerance band. And what we're trying to unearth is “What's the personality of this company? What's the tolerance you have for change? What are you prepared to do in order to achieve your outcomes?” And it gives us an understanding. Are you in strengthening for funding?
Now, inside of each building block, there's like five things. So, inside of [the] Frictionless Operating Model, you would have funding, you'd have leadership behaviors, you'd have governance, and portfolio management. You'd have all these different things in there that we would dig into to kind of understand your tolerance for change, and also to understand what's going to unlock speed. What's going to unlock resilience inside your business. How much do we need to do? And that's where we pinpoint the degree of fluency, which then tells us what you should invest in.
And what we're trying to avoid, the counter-argument to what it’s like talking an organisation's got like, the gold standard of cloud teams in their business. Or I can imagine a large corporation would have that, right? They'd have a team that’s just cloud. And those people have been hired because of their cloud expertise. And therefore, they spend every day trying to be the best cloud group in the world in that industry.
Is that the right thing for a company? Like if your aspiration, if your transformation you're trying to achieve does not require a gold standard, it requires “good enough,” then why are we investing all that money? Why are we chasing the brand new thing in that technology space when we should be applying it to maybe a data environment, which is going to give you greater return, or we could be applying it to an operating model to say, “Look, what's the point of working this way if your operating model is the thing that continues to hold you back, it doesn't matter how much you invest in the cloud. If you still take 15 months to plan what you're going to do, if you're too rigid to be able to change investment directions, if you have no way to measure whether the thing you're investing in is actually working or not to know whether you should pivot, what's the point of all that investment?” So, what we're trying to do is get rid of the noise of infinity and bring things down to a far more focused – “Let's achieve something, let's get a return out of this transformation and then move on to the next, most logical step.”
When you're doing your analysis with an organisation, and sort of determining this willingness for change and fluency, and what their objectives are, where do you start in the value chain and how far down do you go? Do you start at the board level and work your way down to the operations level? Because obviously the CEO might tell you, “O yeah, we're totally willing to change and we want to do this and that.” And then culturally within the organisation, it could be somewhat different and there could be resistance to change. So, how do you approach that challenge?
So, there's probably two answers to this. Like one is probably a whole different conversation about why transformation is probably not the right way to go about this anymore. But what we're now realising is there's been a massive shift in the direct answer to your question, which is if you asked me 12 months ago, I wouldn't have thought about the board much. But today it's huge. I think COVID accelerated that role. So, now we need boards who are a little bit tech savvy. Who are definitely understanding of the impact that technology now has on the success of a business and therefore, not having any technical expertise inside the board is just not on anymore.
And then when you think about the role of a board in the governance part of it, they need to remain at arm's length a lot and things like that. What you need them to know is how to ask different questions, how to be involved in a shorter feedback loop, because this kind of board meeting once every quarter or something, and then having oversight, it's just not going to be enough. That feedback loop needs to be smaller.
So, there's definitely a changing role for the board in all of this. So that's a tick to them. Then the executive group needs to be… A colleague of mine, Sonnel, sort of said the other day, the difference between “complex” and what was the other word we use? “Complex” and “complicated.” You know, the whole Cynefin-type model where you sit there and go, “Well, most transformations have been done in a complicated fashion, right?” They have a problem and they're hiring experts to fix it. You have a car with a flat tire, you hire a person who can fix the tire and it has no impact on its drivability, has no impact on the engine. It has no impact on the interior. Transformations aren't like that. You cannot contain a transformation. You can't go, “I'm going to do one division, or one project, or one program”. It's going to touch everything.
So therefore, the executive level, they all need to align on this because if there's just one or two people who go off in a different direction? For example, if you have IT doing IT-as-a-service in their transformation and you've got the business trying to do some kind of Spotify model. So those two things don't go together. You can't have one model that says IT should be part of the business and we should all work together in the single team. And another model saying IT should be huge and we should be serving you as a customer. Those things don't work.
So, we're seeing that everywhere, you know? This multiple transformation attempts going on inside one company that don't actually fit together. So, you need an aligned executive group. And then lastly you need the momentum of a movement. So, underneath the leadership group, you need to create a movement of the practitioners and the experts and the people who really know how this company functions, who understand how they're holding two strings together to keep something alive. And that , if the leadership person comes in and goes, “Break the string and we're going to transform!”, the things will break. So you need them involved to form a movement. So in reality, you need all three.
In some respects, I think that's the hardest part because people are generally resistant to change. And so, you know, when you're talking about process change, inevitably there is going to be that operational level on the factory floor, there's going to be some level of process change. And generally speaking, people don't like change.
And so whilst the executive suite may be all aspirational of what they're going to be in the future and how they want to do things, executing that down through the value chain, I suspect, is part of the bigger challenge.
There’s something that you mentioned just as you started that answer to that question, you said something about maybe it shouldn't be about change. I just want to jump back to that. Like you, it seemed that you said something big and we just skipped straight past it!
I sort of let that slip through – I came in by saying that it's probably another topic. Remember that bit?
Let's dive into that a bit. Can you tell me again what you're saying there?
Transformations go in a circle, but, what you've got to do is take a step ahead and then stay ahead.
Maybe it's that I got a little bored over COVID, I don't know. My brain went to places that have opened my eyes to stuff, right? And I sit there and go, “What can we learn from the virus that's positive that we can apply to business?” And it leads you to Darwinism, it leads you to a whole bunch of things around how viruses work and mutate and how hard they are to keep up with and how they are optimised for chaotic behavior. Right? And, okay, this is really interesting. And what comes out of that for me is evolution.
Evolution, new organisations never have to transform.
Transformation is forced upon you. You transform because something has already happened. It's too late. And when you think about the crazy compromises large organisations are going through, when they do their transformations, they compromise themselves back to their starting position. Transformations go in a circle, but what you've got to do is take a step ahead, and then stay ahead, which means you transform all the time, but in much smaller increments.
So, I look at that as being more evolution than transformation. And I think there's a massive shift happening in the market right now for evolutionary organisations. And that those organisations have certain characteristics that allow them to do that, right? And things like this kind of shared value, like they kind of appreciate everybody extracting value together. We had the old ecosystem top conversation, which is fine, but I'm talking about [a] next-level ecosystem. It's like customers get value, you get value, your partners get value. People you don't know get value from it. So, it's this concept of shared value.
That thing I talked about earlier about using data to look at weaker signals or look forward, they can do that really, really well. And I also think that there's something a bit cheeky about them, which is that they seek out change. They actually look for change. They're not bound by industry or product or business model. They just see an opportunity that can go after it. And you say that companies like Gojek or Grab, or I guess Amazon to some extent, they just enter markets unexpectedly that you just didn't think of. But they just see an unmet need in a customer base and just hit after it.
So, as I said, it's a much bigger topic. But in my head, this is where my head's been going over the last year and a bit about there is something about the failure in transformations because of compromised politics, legacy technology, all these kinds of things that people aren't facing into, or don't have that kind of courage to really bust through. That has made me go, “There's gotta be a different way.” And so that's kind of where I'm heading with it.
I’m seeing the seeds of a new book: “Digital Transformation is Dead.”
I hardly wanted to write the first book. I'm not going to write another book.
It's interesting though. We had a guest recently, who suggested that the pandemic inspired a response, a response to an event like that – which required – which forced organisations to do remote working and communicate with their customers and stakeholders digitally, you know, in a much shorter time span, they may have had some planning to do that in the future, but they needed to implement it now.
But that kind of response wasn't transformation because it wasn't a planned or a coordinated thing. It was simply responding to an unusual event. And your analogy of an evolutionary business looking for change or for opportunities, it's not the same as what we went through in the last 18 months. What are your thoughts on the pandemic? And was it true business transformation, or was it a hybrid of something we just had to do?
The brave question is, what do you leave switched off? You've got one chance right now, in this moment, over the next six to twelve months to make a decision about who you want to be in the digital age and beyond -- because it can't be what you were.
I think leading into COVID, we'd landed on Greenfield’s theory. I'd say digital is an era, right? But I don't think it's a thing. I think digital is an era, like we've gone through the information age, the agriculturalised, industrialised, the digital age.So, that's how I see digital. The impact digital has had on every company, regardless of industry, has heightened the expectation of customers, right? So, customers now expect more, want more real time privacy access to data, whatever it might be. And that expectation constantly changes.
So, it's no longer possible for a company to meet expectations and stop, right? So we're constantly dealing with end-customer expectations. We are dealing with a new kind of speed. So, speed of decision-making, the requirement of time to market is a lot faster. The timeframe of change is a lot shorter.
So, it's a new kind of speed that we've never seen before. We're dealing with this technology explosion. So both in, “Which technology do I pick? How do I know which one to use?” and in, “How the hell do I adopt new and emerging technology, given my legacy architecture?” So, we're doing this tech challenge.
And then what COVID added is resilience. We cannot have single points of failure in operations, whether it's supply chain, remote work and all that. We've got to capture and quantify, I think, leading into COVID. We were kind of all nodding our heads at those things. “Yeah, yeah. I get it. It's fast. I get it, there’s tech. Yeah, I get it. Customers want more. I get all that.” What COVID did was it made it instantly real. It made it instantly undeniable that you have to deal with this right now. You can't go, “Yeah, yeah. We'll deal with that at some point.” It became real – to the point where -- and I had this conversation with one of the executive teams I was working with -- never have we been closer to Greenfield. Right? Think about that. Never have these organisations been so close to going back to Greenfield in their history since they were startups. All of a sudden at the end of COVID, we had stopped everything. We shut everything down.
So the brave question was, what do you leave switched off? This is the one point you've got one chance right now, in this moment, over the next, probably six, 12 months to make a decision about who you want to be in the digital age and beyond, because it can't be what you were. It just can't be. Like, that was failing. We knew that before COVID. So what COVID has done is said, “Enough already.” Like, now is the time to be introspective and brave and ignore your old structure, ignore your budgets that have been predetermined. Ignore those things for a second. Ignore the products you currently have in the market. Stop, and just go, “What do we really need?” Because I'll guarantee, if you did that, you would find most of the work you're doing, you don't really need to be doing. And you'd save a lot of money very, very quickly that you could reinvest. You would understand that a whole world of new opportunities just opened up new markets, new business models, new ideas that you can now go after because we've all gotten used to a different way of working, a different way of going about things. Use that as an opportunity to go to places you've never been before.
So, I think what COVID has done is it's taken us to the point where the brave companies will reflect on that and go, “Okay, what do we do from here.” The companies that will be crushed by the impact of COVID will try and survive COVID. “Let's start back up again,” and they'll go back to two years ago and then they'll get there and go, “Where is everybody? What's happened? Why has everything changed?”
So, I think that's probably the big impact that it's had. It made it very real, very quickly, that the need to transform has never been greater, has never been more obvious and your choice is [to] tinker, because there's not a choice to do nothing. The choice is tinkering around the edges, providing the grand jury of executives saying, “Let's all do this,” and actually really not being prepared to change or make the courageous decisions that you'd need to, or do something significant at this moment. And, yeah, I think this is the best opportunity we've ever had to do that.
Because the reality is the consumer has gone through that process as well. They've been idle in their own homes for 18 months. They've also reassessed, “What do we really need?” right? They haven't been consuming to the extent they have been in the past. They haven’t been traveling, they haven’t been doing all these sorts of things. And so they've reassessed their life and they're likely to go forward in a different way as well. They're just going to naturally do that. They don't have to have an organisational plan to say what they're going to do. They're just going to naturally behave differently.
Absolutely. We'll never go back. We’ll never go back to where we were.
Yeah, actually. I mean, I'm gonna have to hand it to my wife when this first started out, she said straight away, “This is going to change things forever.” And I'm like, “Oh, no way. We'll get back to normal.” I wasn't expecting it to drag off for a couple of years!
I'd like to talk about your co-authored book, Digital Transformation Game Plan. You previously said the book came about because of your experience as a ThoughWorker, particularly by two events. Tell us about the events that inspired you to co-author that book.
Yeah. So, event one was the opportunity to work as a peer of an IT leadership group for a couple of years as a ThoughtWorker, but basically operating as a peer with that group. And I’ve really seen firsthand the limitations and constraints that technology leaders operate in, whether it's the financial model, the OPEX/CAPEX game, the constraints of the technology, the legacy challenge that they've had and how it's really difficult to pay for that without the business input and the business doesn't think they need to pay for tech stuff, that's the technology group.
So, it's really difficult, and that difficulty causes them to hedge everything, right? So budgets are inflated, costs are inflated – everything's hedged. Just to, kind of, be able to protect themselves from the unrealistic expectation and KPIs and pay packets and all sorts of things that are placed upon them.
And then I had a second opportunity, which was the opposite. So, I got to spend sort of two years with a very, very large corporate enterprise in the US, but with the CEO and her reports. So it was like the opposite experience. I called it the opposite experience. I shouldn’t even call it the opposite because that's the whole point I'm trying to make: there shouldn't be an opposite. But I got to see the lens of the business, trying to deal with technology and IT trying to achieve their goals and their outcomes under those constraints. And it was eye opening. And so what I learned about it was the conflict between the two and why it exists because of the way we've structured companies, because of the way we've lost sight of the customer, because of the way technology constraints, because of the way financial constraint – the leadership thinking that the whole system is busted mate! We have built companies based on industrial age practices, and those things don't exist anymore.
We've built companies based on predictability, that seek out predictability and certainty. And that does not exist anymore. So the tools, the techniques, the way we go about it just doesn't fit. And so that inspired me, right? And then when the CEO of ThoughtWorks sort of came to me and said, “You should write a book.” And then that conversation turned to, “I could do it with you.” Okay! That's a great idea.
And so we just ended up in this amazing exchange of conversation. Like, I don't know if you've experienced it but the book writing thing that was such a surprise for me. Like, chapter one was hard. Like, you sit there and try to sort things out, concentrating, trying to think about what to write. By chapter three or four, Guo and I and Mark were just talking to each other. You couldn't stop the flow of content because we've made it. There's this mental shift on writing a book for others to read. And it moved to actually just trying to tell an authentic story of my own experience. And when I shifted mentally to that, it was really, really easy to write.
And so what I hope people get out of the book, it's a very authentically written book. It's written out of experience and a genuine concern, not as an academic.The game plan conversation is a tiny, cheap part of it. Like there is no game plan, man. You cannot follow steps. In fact, we spoke a lot to O’Reilly. They really wanted to use the word “playbook” and I was like, “No.” Like, I've a basketball background, there's a difference between a playbook and a game plan. A playbook is, “Here's the plays and how to run them, go and learn it. Follow them like this.” A game plan says, “We know what the opposition looks like. This is the best style to beat that kind of opposition. When you're out on the floor, make decisions in the moment and respond to that.”
So, the game plan is more of a philosophy than a step-by-step guide. One that would come through that, what we think we can show companies how to do is how to go about this and how to get rid of that conflict between our team and the business and that both are required to come on that journey together. And that there is a much more simplified way to do this. And it's all easy. And the answer is absolute. It's really not hard to work out, but -- and the “but” part is you must be prepared to make the courageous decisions that are going to become very obvious. You must be prepared to face into the transparency that's going to be created by this. That will be uncomfortable. If you can solve for that, the rest of it becomes quite easy.
“The questions that become really obvious.” Is that what you said?
The answer becomes really obvious. So, let me give you an example. Simplified Operating Model, right? So, if you were to start from scratch, this is what you do. And so I'm saying to companies that haven't started from scratch, “Try and get back to this.” You have a purpose as an organisation, the purpose you belong to society, the reason you exist, right? Which relates to the value that customers pull from you, right? So, that's the starting point. As leaders, you have expertise and knowledge that I expect you to create the outcomes that your business needs to achieve in order to make a purpose. Right? So for a major corporate, maybe 25 outcomes tops. So, we're talking about the mega outcomes, right? That's what I expect you to be able to do as leaders, and then assign a single measure to that outcome, one that tells us we're progressing towards it.
Then I want to bring together all the people in the company who believe they can contribute to that outcome. And I want them to design work to move the measure, right? So straight away, there's a massive difference to how companies work today, because typically we decide work based on the peoples and the skills that we already have. And then we spend ages trying to work out what to measure. So what I'm saying is, design work to move the measure. Then that group that designed some work, they'll appoint a measure to that work. And the process continues all the way down like a cascade. And at the bottom, you've got a team of autonomous, hopefully agile working people from both business and IT, and when they look up, what they see is the thing that they're doing is intrinsically born from the outcome, and it's still an outcome language.
So they haven't been told, “Do this thing.” They've been told, “Give me this outcome, which is a subset of the bigger outcome.” And what they're measuring is an aligned leading indicator of the original measure. So, now you've got this beautifully aligned business along that journey. If you did that for every outcome, you would create the backlog of the company. The backlog has work. If you then analyse that backlog from a skills and capabilities perspective, you would then have an answer to the skills and capabilities we need in order to deliver the highest value work, to meet our outcomes and achieve purpose. If you then took that skills analysis and overlaid it with what you had today, I believe there'd be a 40 to 60% difference, right? Because your current business was born from history. It's not going to match the value of work. Now you've got a gap.
Now I'm not saying, “Go and change the business and sack a whole bunch of people.” What I'm saying is, can you face into that? Can you work and head an agile business back to the skill mix that you need? If Joanne, the project manager from Sydney resigned, and you had an excess of project managers, but a scarcity of BAs in Hong Kong, could you hire the BA in Hong Kong rather than replace Joanne in Sydney, knowing that the headcount goes to a different person?
Can you face into that conversation? Because most companies can't. “Oh no, this is your instruction but now they're my people.” So, what happens today instead is that we bid for work every budget cycle based on the people that report to us and the skills that we currently have, no relation to the value work and what you would do if you were truly trying to make purpose into the redundancy outcomes. So, when I say the answer is easy and it's quite obvious, the Simplified Operating Model – go and do that. They want to be successful. It's brilliant. That’s where you go, it's really simple. But to get there, you have to face those kinds of conversations and not many companies yet are prepared to face, as an executive group, that kind of confrontation, to really make the change necessary to succeed in transformation.
That's a really excellent answer. It really was!
I should write a book on that. Oh wait! I did!
Have you gone into organisations where they are already doing things along these lines, either consciously or it was a strategic, conscious decision? Like particularly, if the conscious strategic strategy that already worked this out and it was through observation, you saw them doing it.
The most important leap of faith boards and executive teams have to make in the digital age is that the more value you deliver the more often to customers, the more profitable you'll become.
Yeah, it's interesting. Like, I think you'll find the current digital darlings have all started that way. You know, whether it's zero or all these, you see these organisations everywhere that have grown at a rate of knots from almost startup roots and have done that because they've been able to hold on to that real attachment to purpose, really purpose-led organisations. There's a really great culture inside of them. The people that work for them love working there. You can see the alignment and why they're doing things that they're doing.
So, I think that's what happens. But I do think that what we're noticing in the industry at the moment, there's a max out of size where the problems that you start to facebecome the same problems that traditional firms have. So, I'm watching this growing orb in the middle of the startup world versus the traditional world. And I'm watching this thing get bigger and bigger and bigger, which is at a certain point in time, even these darlings start to come to a grinding halt and they start to find it really difficult to put things into the market. So, they find it really difficult to test and learn, or they find it really difficult to remain true to the outcome. Right?
So at some point, traditional bureaucracy starts to creep into these companies. The analogy I use is they start to get adults. Why did they have to hire adults? For years, they’ve been teenagers, bold and taking on the world without fear and really going after stuff. And then all of a sudden, I think they get to a size where they go, “Ooh, when are we going to do an HR policy? When we do that, we better hire an expert.” So, in comes the HR expert of 25 years, who's got one way and they've got Bell Curves and they bring all this stuff that really has no place in today's market.
Right? And they go in there without an understanding of how the company got to where it got to, and they just start to implement the, “This is how you do HR well,” and then they go, “Oh, thank God! Someone's going to take care of that.” And then slowly over time, the org structure starts to dominate. The funding model starts to dominate. The leadership thinking starts to shift. Everyone starts to worry about their KPIs and we start to optimise for something else.
And I think that word, “optimise,” is the most critical word in transformation. Because when you begin to transform, you must pick what you're going to optimise for. And what worries me most is that not through deliberate fault, people start to optimise for the wrong thing. And what I'm saying is if you optimise for the customer, that's what startups have to do. They optimise everything for the customer. As you get bigger, the shift that goes on pips out to optimise for the org structure, they start to optimise for revenue. They start to optimise for profit – and quite frankly, we get lost. And then most importantly, the leap of faith, I think organisations have to make or I shouldn't say organisations, the most important leap of faith boards and executive teams have to make in the digital age is that the more value you deliver the more often to customers, the more profitable you'll become.
I can't think of a better line to end the podcast on. Gary, super interesting stuff. How can our listeners follow you and learn about what you're writing about, and of course your book?
Hit me up on LinkedIn, for sure. I love engaging with the LinkedIn community. I try to put out controversial thought patterns as much as I can on LinkedIn. So, definitely hit me up on LinkedIn. And, I'm always up for a chat with anyone. I love riffing about this stuff, as you can tell, I love talking about, so hit me up anytime.
Of course, Digital Transformation Game Plan published by O'Reilly, available on Amazon.
Yeah go buy that one, that’s a great idea! It’s a good book.
Sounds like it. And we have one available for our listeners as well. And we'll give details on that.
I’d also encourage, too, that the Digital Fluency Model is free online. There's a little tool we built to kind of help people learn it. So just go check out the Digital Fluency Model as well, and have a play around, love some feedback on it.
And where can we find that?
Just straight off the ThoughtWorks webpage.
Terrific. Thanks very much, Gary O'Brien! Thank you very much for joining the program today.
Thanks for having me!
- Digital Fluency Model
Digital Transformation Game Plan: 34 Tenets for Masterfully Merging Technology and Business by Gary O'Brien, Guo Xiao, and Mike Mason
Gary O'Brien on LinkedIn
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