AWS Cloud Enterprise Strategy Blog
Today’s CIO—Orchestrator in Chief Part 1
“Nothing is more difficult than to introduce a new order. Because the innovator has for enemies all those who have done well under the old conditions and lukewarm defenders in those who may do well under the new.”
– Niccolo Machiavelli, The Prince
A regular topic with customers is how they can approach transforming their business with a focus on people and culture rather than just technology, rightly putting the emphasis on the “transformation” in “digital transformation”. Competitively, companies need to be increasingly agile, faster to market, and customer-centric. When decomposed, the scale of change required to realise these aspirations can be paralysing. One approach is to delegate out large portions of the changes to different departments. One department running Agile transformation, one the migration to the cloud, and another driving DevOps for example. In practice, this often leads to siloed efforts focused on the process rather than the holistic change required, and inevitably creates change fatigue.
Success is reliant on your ability to mobilise the entire organisation against a unifying vision, and then having the stamina to drive the change…and even to imbue the organisation with knowledge that transformation will be an ongoing journey. Over the next three blogs, I will look at change techniques for mobilising large-scale changes at a team, department, or board level, concluding with thoughts on how to establish a continual improvement approach to minimise future “big T” transformations.
Numerous studies show that matching big visions with big projects rarely works. Surveys by leading consulting companies all conclude that digital transformations are not living up to their business cases at many organisations. The reasons are all too familiar, and include a lack of leadership, buy-in, and cultural change. The starting point for success must be the understanding that “transformation” means leading with a cultural change, not a technical one, regardless of whether it is a wholesale change to a business strategy or the introduction of Agile. It is about evolving your own organisation’s immune system—your culture—to reflect the new world realities without losing what works. To do this, there needs to be a good understanding that organisations are as much emotional constructs as they are rational delivery machines.
With their broad purview in an organisation, CIOs are in an ideal role to galvanise successful, transformative action. John Kotter’schange framework makes for a good, proven starting point regardless of the change envisioned. Unfortunately, what I have observed over the years are one or more steps being skipped or paid cursory attention. Paradoxically, in an age of rapid transformation, slow and steady wins the day when implementing a repeatable change methodology. The steps are simply:
- Create a sense of urgency
- Build a guiding coalition
- Create a vision
- Communicate constantly
- Empower and remove obstacles
- Create short-term wins
- Build momentum
- Make the changes stick
I’d like to share some practical advice I have seen work on how to go about these changes.
Unfreezing the Organisation
- Build awareness. Companies typically undergo major changes due to external forces such as competitive threats or regulatory changes. The hardest change is anticipatory in nature—changing to be ready for an unknown future rather than a current burning platform. When done well, this type of change is the lowest cost and builds an organisational competitive change muscle. Common stories about the rapid dominance of companies such as Netflix, Airbnb, and Uber are useful illustrations of why an organisation needs to change, but they also get a little tired. They can invite myopic challenges (“but we are different to company X”). When creating a sense of urgency, use multiple tools to ensure there is a genuine understanding and acceptance of the case for change from a customer’s perspective: off-sites, external experts, case studies, visits to analogous but disrupted industries, or listening in on customer complaints, for example. While external help might be useful to make the case, or even to lend the case credibility, this has to be a message that is owned and bought into by the organisation.
- Describe the future.As with any good story, the antagonist above needs a brighter future to be described as a counterpoise. The future cannot be predicted, so how do you create a clarion call for improved company nimbleness across the whole of the senior team? One of the most effective approaches I have seen is to either walk the senior team through, or co-create with them, the future state vision for the customer using existing data to identify opportunities for improvements. It forces a conversation that puts everyone in the customers’ shoes and should ideally stay away from jumping to specific technology solutions. That said, introducing some visceral technology helps educate on what is available and helps prompt new thinking. While a reimagined customer experience is an idealistic outcome, the real purpose is to create an understanding of the potential changes required to culture and working practices to react to all the future possibilities. Here the CMO or CDO can be great allies. While there are polarised discussions on whether an organisation needs a CDO, most successfully transformed companies have one as a cultural jump-start, often someone from inside the company who already understands its dynamics.
STOP! If you do not have the majority of your peers at an executive or team level confirmed as committed at this point, rethink your approach! Fifty percent of companies fail at this stage due to a lack of alignment on the future state, the status quo being more comfortable than a new future state, or denial that a change is required.
- Enrol champions. The coalition of champions is responsible for mobilising and guiding the change. Don’t shop around the usual suspects here or assume that change agents need to be external, and don’t make this one person’s role. A good coalition combines many different types of people at all levels of the organisation. Combine those who have a burning desire to embrace the change with those who have the skills or positional authority to execute the changes and those who have the credibility to rally the troops through their networks. It is not good enough to recruit just advocates. Look for those who have lived through past change initiatives, who have strong execution credentials, and/or have a large ability to influence others and navigate the organisation. They will likely be sceptical for good reason, so understand and address their concerns through co-producing changes to the narrative.
Having the right mix will enable a continual deep read on how the changes are really being received by those affected. It will also lead to difficult but healthy conversations. Invest time together outside of the working environment to build trust, enthusiasm, and mutual respect. The right guiding coalition will self-replicate over time, becoming a flywheel that accelerates changes.
- Develop the vision. Avoid the long business cases heavy on intangible benefits and create a simple, concise vision that appeals to both head and heart, avoiding trying to provide solutions where possible. The vision must encapsulate a future that is of value to the business but also captures the imagination of its employees. The ambiguous vision—“we need to be a leader with Artificial Intelligence”—carries far less real meaning than “we will become an organisation that drives customer satisfaction through deep data-driven insights”. Make it exciting and big. As a technology parallel, “moving all workloads to the cloud in two years” is a just project, moving 50 workloads in 50 days is an urgent challenge requiring changes in behaviours.
High purpose organisations have lower turnover and higher profitability. As an Amazonian I have become accustomed to the “working backwards” process of putting the customer at the heart of our thinking and writing a press release that succinctly expresses the big win for the customer along with FAQs. Develop a handful of KPIs to help measure progress, ideally with some being antagonistic. In other words, ones that cannot be achieved by continuing the status quo, such as time to market, number of experiments being run, or a Net Promoter Score with customers.
In the second part of this post, I will look at techniques for mobilising actions around the vision, and embedding the resulting changes in your organisation.
CDO Decoded: The First Wave of Chief Digital Officers Speaks, EgonZender
Change or Die, Deutschman
Unlocking Success in Digital Transformations, McKinsey
The Heart of Change, Kotter