"Becoming more digital" is on the mind of every enterprise product manager and IT executive, but a surprising number of these companies are still not adequately equipped to successfully respond to—and take advantage of—the digital revolution unfolding in virtually every industry. Many factors contribute to this phenomenon, but at the core is a gross misunderstanding of what it actually means to be successful at digital.
Fundamentally, becoming (and being) a digital organization is a journey—a continuous evolution—rather than a discrete destination. That journey is catalyzed by a combination of capabilities and philosophies about how the organization serves customers, not the achievement of a particular milestone on a product roadmap. If your definition of success at "being digital" is the conversion of a particular business process to a mobile app or the modernization of some legacy technology, your project may succeed, but you may not be any better prepared to respond to disruption.
Fortunately, this outcome can be avoided. There is still time to adapt to a rapidly changing digital landscape, but that window of opportunity is closing quickly.
Technology is evolving too quickly to predict the next change. Multi-year digital strategies are virtually guaranteed to miss the mark. Instead, enterprises must prepare for disruption by being equipped to respond to change.
Success Is Enabled By Capabilities and Philosophies
Organizations that are (or will be) successful at digital must possess certain capabilities. The following is not an exhaustive list, but it does highlight the capabilities that are most frequently missing from mature enterprises.
- The ability to rapidly deliver new products to customers without being constrained to a fixed release calendar;
- Product management teams that include technologists, including people who have academic or professional experience writing software;
- Organizational structures that are product-centric rather than channel-centric.
In addition to these capabilities, certain philosophies and ways of working must be fully adopted by product and IT organizations. Most importantly, these include:
- A willingness to experiment with new technology that has not been proven or is not fully understood (particularly if the lack of understanding is due to ethnographic or demographic factors);
- Committing time and money to the exploration of new technologies in such a manner that day-to-day priorities don’t constantly interfere with this process;
- Embracing a culture where innovation and R&D activities occur within the same teams responsible for delivering the core product, versus relegating innovation to a dedicated but separate team;
- Trusting talent (rather than, or at least in addition to, process) to navigate business challenges;
- A fully integrated IT organization, including infrastructure and operations, that works directly with the business/product teams;
- Product owners who are accountable for the success or failure of their products and have complete authority over the technical aspects of product implementation.
Creating Organizations Prepared for Disruption
Technology is evolving too quickly to predict the next change. Multi-year digital strategies are virtually guaranteed to miss the mark. Instead, enterprises must prepare for disruption by being equipped to respond to change. The capabilities and philosophies above help create disruption-ready product delivery teams.
One example of evolving technology causing disruption are voice interfaces, such as Amazon's Alexa. For many organizations, the introduction of Amazon's Echo - the first product to provide the Alexa voice interface - led to many uncomfortable questions:
- Should we build an Alexa skill at all?
- If we build an Alexa skill, should that be done by our IVR/telephony team or our mobile team?
- Are we comfortable with Amazon's AWS services that make Alexa skill development significantly easier?
- Who are my IT partners responsible for enabling access from Amazon AWS to our internal services?
While seemingly innocuous questions, these sorts of questions take weeks or months to resolve in many enterprise settings. Without clear answers, they lead to the atrophy and death of new products. Alexa is just one example of digital disruption; chatbots, augmented reality technology, and IoT device proliferation are just a few others. These trends will continue—and likely accelerate—before any kind of relief to rapid change is felt.
What Can Mature Enterprises Do?
Change has to start somewhere. Digital disruption readiness isn't a top-down change program; it's a cultural, philosophical and technical way of operating. Pick an internal product beachhead for readiness. Assess that product's organizational ecosystem for missing capabilities. Work to change the culture and philosophy of leaders. Experiment. Stumbling in this process is expected. The alternative—doing nothing—virtually guarantees eventual failure, so commit to change.