Brian Sommer has penned Digital With Impact, a must-read for anyone struggling with the much overhyped 'digital transformation' agenda. As background, Sommer is one of our most popular analyst contributors and with good reason. In a career spanning decades, he's seen most of what passes for enterprise technology, has implemented, designed, trained and consulted on a wide range of technologies. He has no fear of speaking out when it comes to assessing the good, bad, and downright awful in our murky world.
Digital With Impact is the first book I've seen that not only cuts to the heart of understanding the digital transformation problem but also provides a broad roadmap for solving the problems that aren't just apparent today - think Amazon, Uber, AirBnB and many others impacting a variety of industries. The book also provides a way of imagining the future. In that sense, Digital With Impact is a book that deals with practical digital transformation.
In true consulting fashion, Digital With Impact offers a rigorous set of process buckets, complete with exercises that on their face are simple but which will challenge leadership in ways that will quickly root out the fakers while encouraging those who, in the words of Steve Jobs are:
...the crazy ones, the misfits, the rebels, the troublemakers, the round pegs in the square holes… the ones who see things differently — they're not fond of rules… You can quote them, disagree with them, glorify or vilify them, but the only thing you can't do is ignore them because they change things.
It's hard to believe but Jobs narration of Apple's iconic advert comes from 1997 and yet, as Sommer's book repeatedly says - much of what we see in the enterprise is stuck. And mostly in that 1990's world. Why? For that you'll have to read the book but here are some example issues that will be familiar to regular diginomica readers:
Geoffrey Moore discusses many of these companies in his book Escape Velocity. He argues that many established firms are too locked into planning cycles and mindsets that reinforce past decisions and market viewpoints. Many executives in these firms may recognize the changes about to impact their industry but fail to create a way to escape the “pull from the past.” Until they do, he says, they’re doomed to repeat the past.
Others have postulated that the failure to change is due to a firm’s recognition that it lacks the correct capital assets, technology expertise and/or people to successfully effect such a change. The leadership of such companies resign themselves to its potential demise as change of this scale isn’t feasible. For example, some manufacturers might not convert to offering their products on an as-a-service basis as they lack the systems, people, metrics, monitoring tools, etc. to deliver such services well. Likewise, some large retailers have struggled to provide e-tailing capabilities. Their core competencies are in areas like store site selection, merchandising, etc. What they don’t know about web fulfillment, reverse logistics, global shipping, etc. could fill a book.
To Sommer's last point, I'd encourage readers to survey the many missteps among iconic retailers that Stuart Lauchlan has and continues to document. But be aware, retail is only one industry. There are plenty of others where we see what at times seem like infantile errors of judgment.
How should executives think about getting out of the miasma? This is where Sommer jams on his process-centric consulting hat and talks about See, Think, Reconcile, Transform as the component parts of a virtuous circle, supported by the ubiquitous availability of (relatively) cheap technology.
See, Think, Reconcile, Transform
Digital With Impact takes a prescriptive approach to problem-solving that should be attractive to those who demand clarity. From my perspective, this is an appealing way forward because it allows executives to focus on what matters at each step of the change process. More important perhaps is that Sommer's proposed method allows executives the freedom to better understand how the world around them is changing, even if the impact of environmental change is not apparent today.
However, don't be fooled into thinking that Sommer's book provides a step-by-step guide that when followed will lead you to some sort of nirvana. It doesn't and it won't. Most companies will need help just getting off the starting blocks because as Sommer rightly points out, few executives understand that, in my words, the time to fix the roof is when the sun is still shining, not when it starts raining. By then it is too late.
In that context, the book doesn't fight shy of recognizing the very real difficulty that executives face when trying to figure out what they need to do.
There’s a major bias in executive mindsets. Some worry way too much about the customers they already have instead of the ones to come. Worse, many don’t see the shift occurring in buying preferences among their current customers. When customer preferences shift, few firms have a fallback position or alternate solutions at the ready. They’ve invested too much time, capital and energy in reinforcing old decisions, products, plants, compensation plans, etc.
Often, businesses don’t make the needed changes when they should because their executives considered such shifts to be “speculative” or “premature.” Unfortunately, customers can change their mind almost instantly. Once I bought a CD player, I never bought another LP. Change can come abruptly but corporate reaction times can be painfully slow.
However, for those that do understand the future potential, the book is replete with examples of the types of mindset needed to succeed. For example, among the characteristics needed in the Think stage, Sommer suggests that organization teams need the abilities to:
- Apply the observations and learnings from the See phase to identify new solutions/products.
- Assess these potential offerings and technologies for their market viability.
- Identify the timing of new market solutions.
- Anticipate competitor reactions.
- Imagine new value-creating opportunities.
These are big asks but they are doable.
One element of the book I found particularly appealing is a consideration of the impact that timing investments and the attendant change brings to the table. This is one of the knottiest problems around. Sommer details some of his own missteps on this one, concluding that executives need to study impact across four dimensions - see below:
As you might have gathered by now, the book is heavy on the need for research and deep thinking about the problems your business faces. There are around 100-120 pages of that with plenty of examples and warnings about pitfalls that can derail your transformation project.
But research and evaluation is only a part of the story. As Sommer points out, you need a carefully thought through way of executing on what ends up as the go forward plan. Again, there is plenty of help but always with the proviso that ideas and actions should not be cast in stone. That was the way of the first ERP era c.1993-2001. Those same methods won't work today or tomorrow.
At this point, Sommer's book switches gears away from the internal work that teams need to undertake to an examination of the role that technology plays in positioning the firm of the future. Again, there are plenty of warnings about gating factors that will ensure your project fails. I won't get into the detail but suffice to say that Sommer has no truck with the idea that you can make transformational change by tinkering with what you've got on hand.
The adequacy of your technology is to a significant degree contingent on the age of the underlying hardware and software. Application software that was designed during a period when technology was heavily constrained often has a very limited data model. Such systems only recorded, processed and analyzed some of your company’s most critical business events and accounting transactions. Likewise, many early systems were skewed toward eliminating manual data entry, so other uses of information were ignored. As a whole, older systems were designed for a bygone world. They weren’t designed to handle big data, dark data and other massive data stores.
Having answered the 'what do we do about this?' question, the book quickly moves onto what Sommer sees as lying at the heart of any transformation project - the people quotient. As we stand today, Sommer could have written an entire book on this topic alone and in that, I feel that while the book points out the many ways in which projects can go south, the book ultimately skates a core issue. However, and once again, Sommer doesn't fight shy of explaining why so many projects fall apart. An example:
Functioning firms have people, processes and technologies that get things done but not necessarily well. Often it is the work of highly dedicated employees who find all manner of creative solutions to make sure products get shipped, invoices issued and bills paid. This environment is often dotted with tons of spreadsheets, paper forms, last minute interventions, dated/late information, etc. The people in these firms may have no time to work on big transformational initiatives as there’s always a new fire starting up that demands their attention.
These caveats - and there are plenty - are nicely balanced with an analysis of the ingredients for success.
Vision. The best projects often had a loosely defined grand objective in mind when they launched but managed to refine and define the transformation throughout the effort. The vision was one big shared vision that bent to fit changing inputs and realities. In most every effort, everyone knew what they were doing and how it would translate into a new, better future for the firm.
Core to this is the idea of multidisciplinary leadership. I prefer to view this through the lens of Vinnie Mirchandani's ongoing exhortation that leaders need to be polymaths. Heck, that's the way of careers in the future, isn't it?
Digital With Impact is not for everyone. If anything I'd say it is for two types of firm:
- Those who genuinely recognize the need for technology-led change across their business models and which are ready to take action.
- Those that see themselves at high risk of being destroyed.
There really isn't any middle ground.
Those who are comfortable with where their business will likely pick up the book, skim a few pages, get a faint niggle at some of Sommer's more pointed barbs and toss the book aside as they study their latest KPIs.
Others will be challenged yet find themselves in firms where the formation of new ideas is frowned upon.
Still others will look at the many examples and exercises the book offers and feel overwhelmed even as they see the need to take action within their firm.
The greatest risk though is for those firms that see opportunity but ultimately only make incremental changes in the mistaken belief that a few small projects are enough to satisfy the board.
In the end, though, the question for all leaders remains - are you one of the crazy ones? If so, then this book is for you.