What Digital Must Learn From Agile
“We stand on the brink of a technological revolution” wrote Klaus Schwab, Founder of the World Economic Forum in 2016, “that will fundamentally alter the way we live, work, and relate to one another. In its scale, scope, and complexity, the transformation will be unlike anything humankind has experienced before.”
Yet the truth that the digital age will be “unlike anything humankind has experienced before” also contains a paradox. While firms are tantalized by the promise of astonishing new technology that offers unprecedented possibilities of innovation and growth, most firms are experiencing disappointment with their digital initiatives. Yet good news: the paradox has a resolution. We can learn from two decades of digital experience to look beyond the firm’s current modus operandi and successfully navigate the digital world using the three Laws of Agile.
Current approaches aren’t t working. As Nitin Seth writes in Winning In The Digital Age: Seven Building Blocks of a Successful Digital Transformation (Penguin, 2021) “despite significant investments in digital transformation initiatives, its impact has been underwhelming.” Similarly, McKinsey authors in Fast Times: How Digital Winners Set Direction And Adapt (Amazon, 2020) lament that many companies today are “stalled in ‘pilot purgatory,’ unable to sustain and scale the benefits… senior executives are frustrated by the slow pace and limited return on investment of their digital transformations, and are unsure what’s holding them back.” Similarly, Behnam Tabrizi and colleagues write in Harvard Business Review, “Companies are pouring millions into ‘digital transformation’ initiatives — but a high percentage of those fail to pay off.”
Each writer sketches a myriad of issues and a plethora of needed actions. Tabrizi and colleagues write that digital isn’t just about technology. So what’s the problem? “Too much focus on a specific technology.” “Failure to align change with business strategy.” “Too much reliance on external consultants.” “Fears of job loss.” “Lack of deep knowledge of how change will affect customer experience.” “Failure to adopt the process techniques of experimentation and prototyping.” And “lack of the right mindset.”
And the solution? It’s aligning change with business strategy; leveraging insiders; designing customer experience from the outside in; recognizing employees’ fear; introducing “Silicon Valley culture” that is “kept somewhat separate from the rest of the organization.” The possibility that strategy and management themselves must fundamentally change isn’t presented as central,
· recognizing the new rules of the VUCA world;
· entrepreneurial leadership in which “the traditional tools of management” are replaced by “vision, inspiration, intuition, collaboration, and ability to constantly adapt”; and
The problem in these writings is not the lack of problems and solutions. It’s the lack of prioritization among the blizzard of different solutions.
The good news is that we aren’t starting from scratch. The business agility movement spent the last two decades grappling with similar issues and had the same debate between conflicting views as shown in Figure 1.
Image by Lynne Cazaly reproduced with permission from a talk by Craig Smith: Slides and video are available here: https://craigsmith.id.au/2015/12/03/yow-2015-40-agile-methods-in-40-minutes/
Eventually, clarity emerged. The winners of business agility turn out to obey three common principles or laws: Whether we call the issue “agility” or “digital”, the same laws apply: the Law of the Customer, the Law of the Small Team, and the Law of the Network.
