When Steve Jobs took over at Apple in 1997, one of his first decisions was to get rid of the Apple Museum in the foyer.
He said he didn’t want to be in a company that was living in its past. He knew that the essence of Apple was vision and innovation, and he didn’t want the company’s future to be held back by the best thinking of its history.
Today, more companies recognise the need to transform for the future. But how do you actually achieve that? At CGI it involves a 14-step change journey we think businesses need to go through to transform. Here are the steps:
Step 1. Inform yourself: Just like generals always prefer to fight the last war, most business analysis comes from the rear-view mirror.
That’s why the first step in our journey is to inform yourself of what the future holds for your market. Can you see change ahead? Look carefully. If it’s hard to spot, ask yourself – is it because you’re an insider?
You see, innovations almost never come from the inside. Fred Smith, founder of Federal Express, knew very little about logistics. Ray Kroc of McDonald’s wasn’t a restaurant veteran - he sold milkshake machines. Larry and Sergey, founders of Google, were newcomers to the search engine business. (They once tried to sell their search technology for $1 million, but Yahoo! turned them down.)
Step 2. Awareness: Like the farmer dismayed by his new tractor’s lack of horses, somebody has to prepare the leadership for the possibility that the business you need to become might not resemble the business you run today.
That’s why in this step, the leadership has to become aware of the need for top-down operating model transformation. Usually, only the CEO can do this. This is one of the hardest steps. (Those who dance are considered insane by those who cannot hear the music.)
Step 3. Business model: Warren Buffett once wrote: “When a management with a reputation for brilliance tackles a business with a reputation for poor fundamental economics, it is the reputation of the business that remains intact.”
In other words, great leadership doesn’t fix rotten economics.
So, looking at your business model – how are you going to make money?
This step is about figuring out the customer segments you’re interested in targeting. The type of relationships you want with those customers? The sort of channels are you going to use. Basically, what are the things you’ve got to get right, what capabilities, partners and information do you need to deliver that?
Step 4. Value: They say the Yanomami Indians employ only three numbers: one, two, and more than two. Maybe their time will come. Until then, you’ll need to define what return on investment your adventure will bring.
What value will developing and executing a digital strategy deliver to your business?
Where are you going to take this business strategy in a digital world? Here, you look at the numbers, and ask if it shows you areas where you can change.
Step 5. Customer Journey: Now you have your customer segments identified, step 5 is about defining the customer journey.
We live in a day and age when most people won’t sit for a three-hour movie that someone spent £100 million to make. So, your customer journey has to be coherent and cohesive.
This spans the entire customer lifecycle – from before they do business with you, throughout their time as a customer, and after they cease to be an active customer.
What are the touch points – the sequences people go through that make up the total lifecycle of a customer? This is where you get under the skin of all this.
Step 6. Customer experience
…and once you know that, how can you make sure that your brand strategy and your physical experience aligns with the brand you promise in your marketing? This is a great opportunity to make these important ideas are working together.
Step 7. Insights: Jim Barksdale, CEO of Netscape said: “If we have data, let’s look at data. If all we have are opinions, let’s go with mine.”
Here’s where you decide which data – or rather, which insights you will need to run the business you’re beginning to describe.
At too many companies, the boss shoots an arrow and then paints the bullseye around the spot where it lands. Truly digital businesses are led by insight, and run on sound metrics. It’s so important to get the right data to run your business.
Step 8. Network economy and connectivity: The most successful businesses aren’t just managing their own customer network – they’re plugging into external networks.
In this step, you start to think about how you can be part of a wider ecosystem and reach more people.
For example, if I’m a manufacturing company, but I only manufacture a certain component, and one of my big customers has a network of their customers, could I be collaborating with them and using their network to sell other types of products to their customer base?
There are fascinating transformational opportunities here, and at CGI we carefully walk clients through them.
Step 9. Automating your operational processes: This step is about gluing everything together.
If I know what I’m offering, and I know who I’m offering it to, and I know whatinformation I need, and I know what the journey is, step nine is automating your operational processes. This is about the real time enterprise. This is about creating real time operations and making sure you automate those processes as much as possible so you have a real-time business.
Step 10. Where do people play a part? This is where you figure out where human beings add the most value.
You design the systems, then you figure out where the human beings have the most value. What you don’t ask is: “Where do my people go?” You first automate as much as possible, and then ask yourself where human beings fit in.
Step 11. Culture: Think about someplace where you’ve worked. Now, try to recite its mission statement. Can you do it?
Culture is easy to forget. But if you try to run a digital business without it, you’ll become the giraffe on the tricycle.
That’s why step eleven is about culture, leadership, innovation and decision making. You’ve designed a new mouse trap: but how will you continue to innovate and make decisions quickly? You need to think about the culture, and the kind of behaviour you want within your organisation.
Step 12. Roadmap: When asked how he arrived at his brilliant discoveries, Einstein said, “I grope.”
Fine for him, maybe not for you. Once you have the culture, people, processes and technology designed – you need to put a clear roadmap in place that shows you how you’re going to put it all together.
Step 13. Making it happen: This is the part where you ‘do it’.
It can be a confusing and stressful period – like when you’re solving the final stage of a Rubik’s Cube, it jumbles the whole thing up so it looks worse than it really is. But once you come out the other side you get to…
Step 14. Run it: This stage is about operating the new, digital business.
It’s about making sure that you’re generating the right analytics, people are making sound decisions based upon that information, and that you’re continuously monitoring and tuning it.
Ultimately, transformational change is a fact of life in virtually every industry. But leaders who recognise this sometimes forget the ‘Noah principle’: predicting rain doesn’t count, building arks does.
Craig Wallace - Head of Digital Transformation at CGI UK