Business Transformation Trinity

I was reading the article “Digital Transformation Success Depends on Agile Approach to Change” by Peter Bendor-Samuel, where the author says that companies are rushing to apply digital transformation to gain competitive advantage. Furthermore, driving the digital transformation often requires changing the company’s operating model through multiple iterative steps known as journeys. Peter Bendor-Samuel explains the benefits of using an agile approach and how this can support companies to move forward with the digital transformation. The author also states that corporate culture is the key element missing that make an organisation struggle to support the agile environment while driving their digital transformation. These ideas were so interesting that made me think deeply about the importance and strength of the relationship between digital transformation, agile and culture.

Due to its content, I decided to share it together with my thoughts on the topic. Surprisingly, as soon as I started to write my input, I realised I started writing this article. I hope you enjoy reading it the same way I enjoyed writing it. As always, it would be great to hear your thoughts on this subject.

Nowadays, companies already realised that in order to achieve a successful agile transformation, they should not limit this change to engineering departments but all business departments, including HR, finance, sales, marketing, customer support, among all others. More and more, we observe that digital transformation is becoming the new trend, leaving many people talking about this topic alongside agile transformations while companies try to achieve both. Clint Boulton states in his article “What is digital transformation? A necessary disruption” published in that digital transformation is a basal change for how organisations deliver value to their customers. In other words, we can say that digital transformation is a revolutionary rethinking of how organisations use technology, reorganise people and processes to challenge and improve their current status quo.

Taking into consideration Peter Bendor-Samuel and Clint Boulton thoughts, we realise that agile and digital transformation are not the same. Agile focuses on how organisations deliver value iteratively to the customer while digital transformation focuses on how organisations use technology to support how value is delivered. Still, one supports the other to achieve the same goal that is delivering value. However, both authors agree that culture is so crucial that its core to achieve a successful transformation. The reason I say this is because, in traditional organisations, executives and managers are given targets that they are held accountable for, and which they cannot fail. I genuinely believe that to succeed with any transformation following the agile approach experimentation must be allowed so we can absorb the learnings from the failures and keep going forward.

During my career, agile transformation and digital transformation initiatives were driven separately, or their touchpoint was high-level. However, people started to realise that the relation between these two transformations is more substantial than initially thought — one cannot work correctly without the other. In his article Peter Bendor-Samuel Bendor-Samuel, states that companies use an agile approach to minimise risks and validate if their efforts meet the desired outcome as they move forward in their journey. Furthermore, the authors say that the key element for any digital transformation supported by an agile approach is the corporate culture. Many times, at the heart of the cultural change, we have the long-established practise of penalising failure. We should understand that there is no perfect or one solution fits all, meaning that experimentation is an essential element to understand what works or not and what can we do differently to make things work and keep improving. Therefore, companies need to celebrate their failures, that they do things to learn and test, rather than penalise failure.

All this make us think and realise that any transformation can be at risk if we take into consideration how failure is managed within the organisation by the leadership.

On a similar note, Tabrizi, Behnam et al. article “Digital Transformation Is Not About Technology” published in HBR says that digital transformation does not come in a box — or a cloud. The authors share the five key lessons that help them lead their organisation through a successful digital transformation:

  • Lesson 1: Figure out your business strategy before you invest in anything;
  • Lesson 2: Leverage insiders;
  • Lesson 3: Design customer experience from the outside in;
  • Lesson 4: Recognise employees’ fear of being replaced;
  • Lesson 5: Bring Silicon Valley start-up culture inside.

What is interesting to note is that culture is again mentioned as a key factor in these five lessons.

After having read them, these are my thoughts on each of those lessons:

  • Lesson 1: Is focused on business strategy. Leadership should first understand the problem and what is the broader business strategy instead of following the old habit of selecting a tool they have in mind to implement digital transformation.
  • Lesson 2: Many times, organisations that seek transformations (digital or otherwise) frequently bring in outside consultants who tend to apply one-size-fits-all or differently known as silver-bullet solutions. Maybe our approach should instead rely on insiders — staff who have intimate knowledge about what works and what doesn’t in their daily operations.
  • Lesson 3: Often, organisations believe they know what the customers want and need when, in reality, they should ask them.
  • Lesson 4: The organisation needs to have or coach true leaders, so they recognise and work with employees’ to overpass their fear of change and being replaced.
  • Lesson 5: Start-ups are acknowledged by their agile decision making, rapid prototyping and flat structures.

Brainstorming in front of a whiteboard helped me to have a better understanding of the relationship between agile transformation, digital transformation, leadership and culture.

After a while, an image started to become clear—the image of Business Transformation Trinity, as shown below.

Business Transformation Trinity

Business Transformation Trinity by Eduardo Ribeiro, July 2020

As we can see:

  • Leadership is not Agile;
  • Agile transformation is not Digital Transformation;
  • Digital Transformation is not leadership;
  • Culture is the centre of everything.

The triangle edges are independent, and the edges are connected by the vertices (relationships), which support each other to achieve any transformation. Furthermore, culture is the key to make transformation a success. We know that change creates discomfort since people are getting out of their comfort zone and without a proper culture in place, we will face resistance and setbacks where the worst scenario could be giving up our transformation and returning to the old ways.

In conclusion, when we are driving an agile and/or digital transformation, we need to keep in mind that all triangle edges need to be worked on iteratively. We need to do this so we can measure the impact of our implemented change, and understand if it was a success or if we need to do it differently. Last but not least, we need constant collaboration with leadership so we can learn from these small failures and not return to the long-established practise of penalizing failure.

Once more, culture is key; it needs to be in our centre of attention and addressed appropriately since even a minor change can be the trigger for the change not being accepted and ultimately not working. Following Peter Bendor-Samuel suggestion in his article, maybe what we need to do is rename the term “failure” to something else that does not create a negative impact like “learnings”. Otherwise, people can misunderstand that the transformation journey failed when actually, we have learned.

In the end, I would like to send a special “thank you” to Anett Stoica for helping me to unblock during my brainstorming moment. For the received feedback about the article, Margarida CarvalhoMike Sousa and once again Anett Stoica thank you!

#agile #agilty #digitaltransformation #leadership #culture