A prior post discussed the tension between speed and certainty inherent in digital investment. This post concentrates on a response to those tensions – thinking of digital investments as a series of projects too focused to fail.
Too focused to fail resolves the tension between the need to know and the need to act creating a way to play the middle against both ends. Avoiding digital failure to achieve business results is the goal.
Requirements for speed and certainty lead organizations to a proliferation of digital capabilities resulting in too many actions without scaled results or crafting transformational programs deemed too big to fail.
Executives choose between the extremes: too small to matter or too big for time to market. Not surprisingly, digital approaches swing between the two as transformation seeks to consolidate digital proliferation while proliferation grows in the face of accelerating time to market demands.
A third way does not requiring splitting the difference between the two
Making big projects go faster is an incomplete answer. That approach adds complexity without resolving the uncertainty created by informed and connected customers. Accelerating too big to fail projects expands management and integration overhead, and creates unnecessary complexity that does not prevent you from falling off a customer cliff at the end of the expressway.
The alternative condenses isolated proliferating projects into larger planned initiatives, improves digital governance. It gives executives greater control of expenditures but not necessarily control of results. Establishing digital steering committees or adding digital to operating committees and board agendas raises visibility as it lends a false sense of certainty based on scrutiny from the inside out.
A truly digital approach solves for certainty and speed. It requires recognizing the intrinsic nature of digital technologies. Digital is lighter weight, leverages legacy, evolves at external rates of change and is fundamentally human. Rather than splitting the middle between proliferation and too big transformation, too focused to fail incorporates these digital aspects individually and collectively to find a third way.
Too focused to fail – a model for digital change
Too focused to fail offers an alternative model for resolving the tension between speed and certainty through focus. Focus narrows the field meeting the requirements of both. Being too focused to fail means generating specific but scalable digital capabilities organized not around the capability, but around a clear external business outcome.
Each project is both a beachhead for new capability and a building block upon the past. Defining digital projects that are too focused to fail involves two things: picking your spots and delivering possibilities profitably.
Pick your spots
Picking your spots concentrates on the focus aspect of ‘too focused to fail.’ It requires taking a little bit of time to identify and concentrate on the areas noticed and valued by customers rather than participating by creating digital capability.
Digital touches everything. Singling out what must change from what can or even should change requires clear thinking. The inability to separate must from can leads to ‘too big to fail’ digital transformation. Avoid scope creep by maintaining a focus on the external impact of the project not its internal implementation requirements, as it is too easy to add one more thing.
Pick digital capabilities from the outside in, starting with the customer, their projected value and overall business opportunity. This may involve changing the position of the customer in your company. It will require taking time to think through a deeper understanding of the world outside the company. Simply ‘updating’ past need assessments for digital only re-enforces what you already know and undervalues the opportunity.
Pick areas with clearly defined value, either particular moments of interaction or situations were customer choice and action drives your economic model. Remember it is from the outside in. Avoid assuming everything is equal or even equally important. You know you are picking the right spots when everyone can understand why you made the choice even though many are not happy with that choice.
Consider an automotive company that looked at the customer experience through an outside-in lens to identify where digital could help them best. Customer interviews, web traffic analysis and observation identified product complexity had grown too complex and varied. That made it difficult for customers to focus on what they wanted as dealers only kept a small selection of what was possible. Rather than trying to transform customer processes end-to-end they focused on the front end recognizing that there would be little to gain from digitizing the purchasing paperwork.
Deliver possibilities profitably
Once you know the spots where you are going, the next part is getting there. Delivering possibilities profitability is the nature of the solution engineering in a digital world. Engineering digital solutions rests in building on what works in order to create new capability that goes over the top of existing and legacy systems.
Time to market is the critical aspect of being too focused to fail. Getting a solution in place, in action and generating feedback provides a more certain set of information than extended rounds of analysis. Recognizing that you can only know some things but not everything is a difference in digital strategy in a focused world.
Use the spots to identify the minimum viable set of changes required to deliver the capability. Work hard to leverage what you already have, support similar situations, or deliver like solutions. This can be difficult particularly when budgeting systems reward new investments and BU leaders want to express their own uniqueness.
Avoid the temptation to build digital capability by rebuilding legacy from the ground up. Building profitability involves leveraging what exists and getting a greater yield from existing resources and operations. The alternative simply takes too long as the world is changing too fast.
Consider the energy company that wanted to expand the range of products in one of their business lines. Previously the business unit literally sold their product by the barrel. They would need new capabilities to sell the same products in different sizes. Rather than commission its own system the BU decided to leverage the capabilities in their retail unit getting into the market in 6 weeks.
A new path to digital transformation
Traditional transformation requires executives to make big bets on the future. The size of those bets supports defining programs as ‘too big to fail.’ That approach is acceptable when the solution is deemed as fundamental for operational success, for example replacing supply chain systems or customer related systems.
Digital is just as important to long-term success. But it operates under a different set of rules. Different in terms of altering the certainty and speed equation, and raising the risk associated with making too big to fail bets.
Being too focused to fail represents an alternative choice, a different tradeoff between speed and certainty that more accurately reflects the realities of winning in a digital world.