4 measures for picking Digital Transformation winners & losers?

If you believe as I do that Tech will be 100% of GDP and that every company will be a Tech company, Digital Transformation is the way to pick winners and losers. Why is this important, perhaps you’re a tech job seeker venturing out into the new expanded market for your skills, how do you ascertain if a company’s likely to transform; or your a CEO who recognizes the need for transformation seeking a leader to begin, repair or accelerate your progress?

Digital Transformation. “Adopting the processes and methodologies used by Tech companies to enable business operate at the speed of computers not the speed of people.”

There are companies that don’t need to transform, they are already Tech companies. These companies have leveraged connectivity and device proliferation applying their technology capabilities to disrupt a broad range of industries with incredible results. Tech companies unknown 10 years ago are now household names, growing rapidly as they “Digitally Transform” industries often at demise of a long-standing stalwarts

Score four things:

1. The structure. Product is the foundation of a tech company. As they grow market segmentation occurs, but for continued success you still need to clearly connect product development to the product consumer through the organization structure.
2. The working environment. One or very few source code and development management systems easily accessible by all, and a clear set of preferred languages and tooling. Similarly, system management infrastructure and the supporting systems that are necessary to run the business, including procurement, asset and sales management. It goes without saying that all systems don’t need to be “bleeding edge” but should be current technology.
3. The work processes. How easy is it to start a project, how quickly does the team get to work building? How are tasks and contributions managed, is there a uniform process using the same systems or a bunch of slides and spreadsheets? Are sufficient access to information and appropriate decision rights, including budget, granted to the execution team ensuring the project lines up with overall plan and size/duration are correctly managed?
4. The Big Picture. Ignore vision and strategy, is there an existing framework for execution evidenced by recent new product introduction? In a company engaged in any significant change activity, there will be constant meaningful and detailed communication.

Long before they were household names, a group of entrepreneurs got together made a “contrarian bet against consensus”. The team had to start small and prove results to progress. The true beginning of a Tech company is the initial creation of a product. Especially when the product is software, the initial creation of the project quickly becomes a source code infrastructure consisting of source code management, software tools and languages, and associated development team process management. As the company grows, this “code” asset remains central to the company’s operation as it’s the realization of the company’s skills. Just as the first project was started by a small team of people, successful Tech companies retain the discipline of starting projects with small teams and getting to work iterating, and by iterating I mean building, trial and error, learning as they worked. This initial infrastructure and process become the foundation of the company, its products and organizational structure. Contrast this to the legacy company process. Before work can begin a strategy or architecture is developed. As this largely thinking and talking process evolves, projects get larger and the focus on getting version one right increases. In an effort to ensure this, the team expands adding experts to ensuring that all necessary skill is brought to bear. As the team becomes larger, it becomes difficult for dissenting opinions to be offered, resulting in careful preparation or positioning, politics has now infected the team. It is unlikely to matters because as the team has grown it has become increasingly difficult to schedule time as the project competes with other projects. Politics, group-think and scheduling become the operating model, poor results follow. Compare a Product based Tech company to its traditional competitors and the disadvantages become obvious. Complex subjective organizational structures create information asymmetry, impeding the ability to distribute decision-making rights. It has been shown decision-making velocity directly correlates with financial performance. The complex organization structure promotes energy depleting behaviors further impacting performance. All organizations require focus on Products, Decision-making and Customers. With a few exceptions where decision-making is the Product, being Product driven provides a transparency advantage benefiting employees, customers and investors. So, is transformation difficult? It may be because the new technology leaders indirectly monetize their technology that the underlying technology used is available to everyone in every industry. They openly discuss their methodologies at conferences, in research papers and publish books. Some of the new leaders make the same technology they use available for anyone to use, either as a service with their support or for free in the form of Open Source. Therefore, to transform just add the right people, and those people are already Tech leaders whose experience is primarily in Technology companies. As the gap between traditional companies and tech companies widen, perhaps the companies that were once technology companies and were leaders in old tech will have the most difficult time transforming. To borrow a well know meme, “Digital Transformation is 10% tech and 90% people”. Many companies won’t make it, how do you rate your chances?