by Yvonne Bettkober, General Manager, AWS Switzerland
Digital transformation is crucial if companies are to evolve their products and services to meet the ever-increasing expectations of today’s customer. Yet in Switzerland, there is a concern that increasing the speed and flexibility of innovation will impact quality. To answer this, Yvonne Bettkober, General Manager of AWS Switzerland, explores how successful Swiss firms are finding the right balance.
I’ve been discussing cloud-based transformation and digital innovation for over six years now with companies in Switzerland. I have observed first-hand the challenges that many businesses in this market are facing. Not dissimilar to companies worldwide, they are aware of the potential business benefits from digital transformation, but struggle to achieve lasting success from technological changes.
Indeed, research by McKinsey has found that just 16% of organisations reported success in improving performance through digital transformation and sustaining the impact of those changes in the long-term. Why is this the case? One of the recurring challenges I’ve observed is a siloed approach to innovation and technological changes, which stems from a lack of governance and alignment at C-level.
For instance, many Swiss companies are organised around Business IT (which looks after technology for specific business units and functions) and Group IT (which owns group-wide technology initiatives).
An example scenario is that the Business IT function start on a project to use artificial intelligence and machine learning to improve customer intimacy, but it’s happening without alignment with Group IT. Perhaps this is due to a lack of alliance between Business and Group leaders, but often also due to a lack of governance higher up - between the CEO and CIO. Because of this, organisations risk isolating projects that could be quite innovative and beneficial to the wider organisation.
A further challenge I’ve observed is a misalignment of functional leaders that can result in siloed projects that overlap in their needs and priorities. This risks duplication of efforts and cost inefficiency.
Aligning around core principles
So how can executives avoid this fragmentation of digital change and maximise the business and customer value presented by digital transformation?
Tenet: (n) A principle or belief, especially one of the main principles of a religion or philosophy. These tenets are held by the group. To be a member in good standing, you are expected to hold to its particular teaching.
In his new ebook, What are Your Cloud Transformation Principles? my colleague Jonathan Allen, an Enterprise Strategist at AWS, addresses this silo problem directly, saying: “One of the mechanisms used at Amazon to deal with potential misalignment and ambiguity head-on is its effective use of principles (at Amazon we call these tenets). A team defines its own tenets, and these tenets are challengeable by any member of the team. If any member thinks they know a better one, then they have the responsibility to recommend a change. Taking a small amount of time to define the principles for your cloud adoption—and to consciously allow those principles to be challenged and amended as you know more—will save you incalculable time.”
This is particularly pertinent if you run a large, complex organisation and want to operationalize change without creating a massive, rigid control mechanism. Of course, it is initially crucial that the business leadership defines and aligns on the overall vision for business transformation and the business outcomes the organisation is setting out to achieve. Then you can define principles that will serve this vision, ensuring you achieve consistency of judgement across the organisation. A small team, or even an individual, can make decisions more quickly, on the basis of alignment to the principles, without having to check with leadership for direction or permission.
Guiding change with principles
An example of a company I work with in Switzerland that has adopted a set of principles to achieve alignment and successful transformation is Philip Morris International (PMI), a manufacturer with operations in 60 countries. They started by aligning as a leadership team on the vision of ‘why’ they wanted to transform, and their ‘why’ was wanting to improve the experience of their customer by becoming increasingly service focused.
From that vision, PMI’s leadership team asked themselves ‘what are our rules, tenets or set of beliefs that will lead the execution of our strategy to become a digitally-enabled services company?’ To enable a high degree of flexibility, one such tenet declared their intention to transform to a cloud first strategy. This tenet led to a decision by the CTO that committed to the closure of the company’s data centres by a fixed date. That signalled to the organisation: ‘there is no way back and we have to now make this a success.’
From this non-negotiable North Star for the business, PMI has established supporting core principles—for example, from a security perspective, how they will develop applications and protect the infrastructure, all with the aim of creating that new, customer service-focused, business model.
Aligning for speed and quality
The benefits of this approach to digital transformation are particularly relevant right now in Switzerland. The country ranks top of the World Economic Forum’s Global Innovation Index and has been there for some time, primarily due to a passion for creating fantastic products and services. Many of which are already enhanced with digital capabilities and tools. There is however an opportunity for Switzerland to accelerate this adoption to respond to the increasing needs of their customer for new experiences and services at scale and speed. So the need to accelerate innovation, reduce time to market and scale fast is becoming more and more critical to maintain or expand competitive positioning and relevance to customers in Switzerland and globally.
This can be a challenge because Switzerland has a very high awareness of, and focus on, quality, which in turn can create an aversion to any change that could be perceived as a risk to quality. But by taking a principle-driven approach to secure digital transformation, organisations can create the organisation-wide set of operating values that guide a measure of quality, whilst also allowing the operational flexibility needed to innovate faster, experiment and learn. Products and services can then be enhanced, and new ones developed, without sacrificing quality.
The journey to establishing these principles must involve a strong focus on developing the operational structure and skills to deliver on your objectives. Jonathan’s ebook goes on to offer examples of principles grouped around the five drivers for cloud adoption: security, cost, flexibility, compliance, availability and people. Our experience using them and working with customers around the globe has shown it. Principles can be a very powerful tool to help a leadership team operationalise the change process, and with that ensure that execution will follow the pre-requisite to every change: leadership alignment and conviction around bold vision.
AWS has extensive experience supporting millions of customers on their transformation journey. Learning from them, we have developed a set of programs to support customers as they embark and progress with this endeavour. From our Digital Innovation program that can help you articulate your vision, starting with your customer and working back from there. To our Enterprise Next initiative, which works with your senior leadership team to align the different functions of your business behind a joint vision. The AWS Skills Guild is a tailored training programme designed to accelerate your cloud skills development and adoption. No matter your journey, my team is here to work with Swiss Customers using those and more tools to make their transformation journey a success, every step of the way. AWS is about How.
About the author
General Manager, AWS Switzerland
Yvonne Bettkober joined AWS as the General Manager of Switzerland in August of 2019, and has made it her mission to lead the growth of AWS Switzerland and contribute to the country's status as a leader in innovative by partnering with Swiss businesses to help leverage cloud to accelerate their speed and ability to innovate.
Prior to AWS, Yvonne spent over a decade at Microsoft leading teams in over 20 countries with the mission of working with emerging technologies, especially cloud, help deliver the innovation and transformation aspirations of organisations of all sizes.