From inflation to the war in Ukraine and the ongoing effects of COVID-19, a perfect storm of economic, social, and geopolitical disruptions has increased uncertainty for business leaders. Building on research and insights from technology executives across industries, Metis Strategy has identified five actions leaders can take to navigate that uncertainty in the months ahead:
Recent downgrades to economic forecasts suggest an economic decline is on the way (indeed, some argue that it has already begun). In July, the International Monetary Fund released an updated global economic outlook which forecasted growth to slow to 3.2% in 2022, down an additional 0.4% from its April forecast and sitting at just above half of the 6.1% growth from 2021. The IMF cited the war in Ukraine, supply chain disruptions, and tighter monetary policy among the key drivers behind the decline. In the U.S., inflation continues to rise, recently surpassing 9% to reach a 40-year high. Additionally, interest rate hikes to tame inflation are already underway by the U.S. Federal Reserve. With so many economic factors at play, uncertainty will be the only constant for the time being. As such, contingency planning and risk management in decision making will be vital to long-term success.
Multi-scenario planning allows decision makers to identify potential outcomes and the likely predictors of each to ensure that the organization is ready to act quickly no matter what comes to pass. Companies must not place too much emphasis on small data variations, as this course of action will not necessarily yield the best results given the array of factors at play. Rather than try to predict or plan for each incremental interest rate hike, for example, leaders instead should prepare for a combination of possible economic conditions: inflation and a recession, inflation and economic growth, stagflation, and so on.
By pursuing macro-level planning for multiple scenarios, organizations will better be able to see the shifting landscape and make timely adjustments rather than wavering due to “paralysis by analysis.”
New work models demand new infrastructure. That sentiment has never been as profound as it was over the past two and a half years as CIOs facilitated a massive shift to remote work. Today, those CIOs face a mandate to enable productive work in a hybrid environment.
As hybrid work models become the norm, it is time for CIOs to focus once again on their organization’s long-term agenda. Corporations know that the pace of change in technology has never been as quick as it is today, and at the same time will never be this slow again. With over 70% of organizations pursuing a flexible or hybrid work model, companies must invest in infrastructure, training, and culture to provide teams with the tools they need and ensure a strong and collaborative environment across more flexible work models.
That requires giving people the tools and skills they need to navigate the uncertainty that lies ahead. Upskilling and reskilling programs are some of the most prominent ways to do this. A LinkedIn study found that 94% of employees would stay longer at a company that invests in their learning. This has manifested itself in many ways at insurance giant MetLife, which launched a digital academy for employees to develop technically. The company has also worked to foster a culture in which employees feel empowered to achieve their career aspirations, Bill Pappas, MetLife’s Head of Technology and Operations, said in a recent episode of the Technovation podcast. Part of developing a strong hybrid model includes investing in the necessary tools, from collaboration platforms to cloud infrastructure, that enable teams to work productively from wherever they are.
Every organization must define its own version of a sustainable work model, including how to attract and retain employees, and how to nurture the desired culture. As old work operating models are redefined and new ones are implemented, investments in people and infrastructure that enable digital dexterity, paired with an increased focus on cultivating culture, will be key differentiators for organizations’ long-term success.
Supply chain challenges brought on by COVID-19 and the war in Ukraine, among other factors, have exposed the fragility of global trade networks, which have seen relatively little disruption over the past 30 years. The global economy’s reliance on Ukraine and Russia for crucial commodities such as oil, wheat, and neon (used in chip manufacturing) has hurt national economies and small businesses alike. The war also has disrupted both air cargo routes and sea shipments, driving up wait times and prices. Trade restrictions (such as sanctions and tariffs) and weakening trust between countries further compound those challenges. Increasingly, companies are questioning whether global supply chains will be as beneficial as it has been in the past.
Consequently, executives are re-assessing the viability of relationships with suppliers both foreign and domestic. Decision-makers may benefit from diversifying their supplier portfolios, possibly favoring those that are more geographically proximate and located in more politically stable countries to further help prepare and protect against future disruptions. Companies such as Intel and General Motors, for example, are building new manufacturing capabilities within the U.S. to decrease their dependency on suppliers in Asia. However, the decision to regionalize varies widely across organizations and industries, and many economists, academics, and executives are speculating about what the next decade holds. Professor Willy C. Shih of Harvard Business School argues that regional supply chain blocs may be the future of international trade as organizations emphasize safer and more stable routes. Others contend the benefits of a global supply chain (i.e. reduced costs), will regain value and that a “transformational shift from global to regional business” is unlikely. The common factor across both theories (and many others) is that significant instability is likely to endure. That makes building supply chains with sufficient flexibility of paramount importance. Technology offers several avenues to achieve this.
Many organizations are turning to digital tools to boost supply chain resilience and transparency. Companies can leverage artificial intelligence and machine learning to carry out risk analysis of supply chain patterns in real-time. Autonomous planning, for example, allows organizations to increase supply chain efficiency and decrease necessary human involvement. Enterprise resource planning upgrades and advanced track-and-trace solutions also offer more visibility into the movement of goods and can help mitigate risk. Furthermore, emerging technologies such as blockchain, autonomous mobile robots, and 3D printing may offer additional benefits from the warehouse floor to a product’s final destination.
Cybersecurity remains a priority for all members of the executive suite. Last year saw a record number of data compromises, up 68% from 2020 with an average cost of a staggering $4.24 million per breach. Roughly 65% of respondents in Foundry’s 2022 State of The CIO study said current socioeconomic pressures have further boosted the importance of increasing cybersecurity, and cyber has been noted as the CEO’s top priority for IT in 2022.
The increasing volume of digital interactions has led to a dramatic rise in the likelihood of breaches and the cost of protection. Facing a threat landscape that is evolving faster than ever, organizations should act quickly to re-evaluate company polices, assess risk management strategy, and bolster both internal and external security practices. This requires a mindset shift in how security is viewed. Traditionally viewed purely as a cost center, organizations must view cybersecurity as a critical piece of the enterprise risk mitigation strategy. Today, businesses must continuously update their cybersecurity practices to reduce the risk of becoming a target and ensure they can respond quickly if or when they face an attack.
Technology leaders should communicate clearly to C-level peers and boards about how risk is being managed. At the same time, it’s important to continue developing strong cybersecurity hygiene at all levels of the organization and to disincentivize unsafe behaviors. Security policies should be evaluated and updated regularly to ensure that they are keeping up with changing times. Regardless of what specific technologies an organization pursues, it must accompany the mindset shift to cybersecurity ultimately as a risk mitigator and cost saver, rather than just a cost center.
Environment, social, and governance initiatives (ESG) have been on the rise for the past several years. Individuals are becoming increasingly concerned not only with working for a company that is actively pursuing ESG initiatives, but also in purchasing from one. This trend shows no signs of slowing down.
It is critical that organizations clearly communicate actions and results of ESG efforts to the public. Historically, however, ESG goals have not always had clear or easily obtainable data and metrics. Technology is making that job easier. Connected devices, for example, can conduct remote diagnostics of buildings, enabling “smart buildings” and helping to minimize their carbon footprint. CIOs can lead the charge on ESG initiatives by identifying key results that IT can deliver, weaving ESG into an organization’s broader digital strategy, and rallying support across the organization to ensure progress on ESG initiatives is fully realized.
The global business environment is in a period of transition. Leaders must use this time to ensure their organizations can respond in a nimble fashion to unexpected changes and not only survive, but thrive, no matter what the future holds. This requires a holistic look across people, process, technology, ecosystems, and strategy and, in many cases, willingness across the enterprise to transform operating models and ditch traditional ways of working. Technology leaders can be at the forefront of this shift, pairing their expertise in digital with a focus on operational excellence to drive sustainable change across the enterprise.
Agile has become the most prevalent software development methodology, with 95% of companies noting they use Agile in some form, according to the latest State of Agile report. As Agile enters its third decade, it is not a question of whether to use Agile, but which flavor of Agile to use.
In our work with companies of all sizes over the years, we have found that while many organizations purport to “do Agile,” they do not necessarily deliver the higher quality, appropriately prioritized software that Agile promises.
Cultural barriers and organizational misalignment often get in the way of realizing the true value of Agile. Indeed, respondents to the survey above cited resistance to change, lack of leadership participation, and organizational culture at odds with Agile values among the top challenges to adopting Agile practices.
In this article, we will provide a brief overview of the Agile methodology and discuss five characteristics that have helped leaders address common challenges and realize greater value from their Agile implementations.
Why Agile?
Agile methodology prioritizes delivering software in an incremental and iterative way. The way we define Agile today has its roots in 2001, when a group of software practitioners formulated the Agile Manifesto. Unlike prior approaches, in which software was developed in silos with little input from customers or business partners, Agile methodology prioritized an iterative development process that emphasized collaboration and adaptability.
Why do so many organizations choose Agile? Those familiar with linear “waterfall” software development lifecycles will remember how slow, counterintuitive, and frustrating it could be to complete a project. Project managers spent most of their time making plans and adjusting them daily, while engineers found themselves torn between actually developing software and re-estimating months of work based on changing requirements. Users were rarely happy with the end product, and despite lots of negotiation it rarely felt like anyone was “winning.”
While waterfall development has a role to play in some IT projects, much of the corporate world has embraced Agile to jump-start software development and delivery efforts. When implemented well, Agile can lead to high-quality software delivered frequently and built with the end-user in mind.
In our work with Agile teams across large companies, we have observed the following five characteristics of successful implementations:
1. Executive buy-in and commitment
Any organization that wants to start on an Agile path or improve its existing Agile practice must begin with a real commitment from executive leadership. For an Agile initiative to be successful, leaders need to possess the Agile mindset and be determined to lead and support their employees through the transition.
Most organizations that fail at their Agile initiatives miss this first step. We frequently see that leaders fall at two extreme ends of the spectrum: they are either micromanagers or they are absent. The best Agile leaders, on the other hand, give teams the autonomy to do their work while removing roadblocks and acting as a guide to ensure that goals are clear and the work contributes to the broader vision. Effective Agile leaders allow their employees to fail while creating mechanisms to learn from failures so that they are not repeated.
We see most successful implementations of Agile in organizations where leaders guide and inspire, establish the right framework, and empower their teams to do their best work. Leaders do this best by listening to their teams and trusting their judgement in the way they do their work.
2. Choosing the right process
As mentioned earlier, these days it is not a matter of whether to use Agile, but rather what flavor of Agile to use. Below are a few common approaches your teams might choose:
Scrum is the most commonly used Agile methodology for organizations that want to develop products incrementally in short iterations, with more than 75% of respondents to the Agile survey noting they use some version of it. Scrum is frequently used interchangeably with Agile, and most Agile teams today will use basic pillars of Scrum such as Sprint Planning and Daily Standups. Those whose projects involve high levels of uncertainty may select Scrum because it allows teams to share progress frequently and pivot as needed.
Many mature Agile teams favor Kanban, an Agile framework for continuous work with limited throughput, or scenarios in which teams may be working on only a handful of tasks at one time. A typical Kanban team will have work requests coming in regularly, and the team will release on a continuous basis. This approach tends to work well for teams with work that is more operational or “keep-the-lights on” in nature, such as minor feature updates or bug fixes.
Organizations that want to expand their Agile practices to large programs or portfolios often select a scaled Agile framework. SAFe®, as it is known, is the most prevalent framework for enterprise-level implementations of Agile. This is often the choice for large programs with multiple teams and intricate dependencies. These large programs are typically a combination of Scrum and Kanban teams.
The best way to select the right flavor for your organization is to first observe and listen. Experienced Agile Transformation leaders will assess existing teams, tools, and processes to understand the current state of existing Agile practices. They will then pair those findings with the strategic goals of the business to choose the most appropriate implementation.
3. Team structures that fit the company’s goals and culture
Once leadership commits to the process and an appropriate Agile methodology has been selected, it is time to begin the “practice” of Agile.
Regardless which methodology you choose, two things are critical to a successful implementation: team structures, and the roles and responsibilities within those teams.
The Agile methodology has clearly defined roles with very specific responsibilities. The Product Owner owns the vision of the ultimate goal and is responsible for setting priorities to bring value to the customers quickly. Scrum Masters are servant-leaders, responsible for removing impediments and ensuring that the team adheres to Agile principles. Delivery Teams, which can include team members with different areas of expertise depending on the project, are responsible for producing high-quality products.
Clear roles and responsibilities prevent confusion. Without them, things fall through the cracks and there may be friction between team members with overlapping roles or reporting relationships. For example, some organizations may choose to appoint someone’s direct manager as a Product Owner. As work commences, the direct report working on the team may find it difficult to know when they are hearing from their boss, who can mandate how and when certain work gets done (and makes compensation and promotion decisions), or from the Product Owner, who does not dictate how the work gets done. Having a boss as a Product Owner can also diminish the sense of ownership a person has about their project.
The second most common mistake we find occurs during the formation of teams. Whatever Agile methodology an organization chooses, there are common aspects of successful Agile teams:
Teams with these qualities often will be better prepared to produce their best work while also adapting to changes in technology or customer demands. When teams continuously deliver products that meet customers’ needs, trust will continue to develop between teams and management.
Two of the most common and easy-to-fix mistakes we see involve team size and skillset. Teams that are too large often lead to longer meetings and time to align. Teams lacking cross-functional skillsets are more dependent on other teams. In both cases, teams risk increased complexity and potential for errors.
4. A true commitment to continuous learning
Implementing Agile at scale requires a commitment to continuous learning. Rather than conducting a post-mortem analysis at the conclusion of a project and filing away the findings, Agile puts specific emphasis on Kaizen, which means continuous improvement. The concept, which comes from the Toyota Manufacturing System, aims to eliminate waste by looking for product and process quality improvements throughout the entire development cycle.
In Agile, work is broken down into smaller increments so that learning from each increment can be applied to the following increment. Agile teams will conduct Sprint Retrospectives at the end of each one-to-four-week increment where they discuss and document what went well and what could be done better going forward. They then take these learnings to make the next increment more effective.
The importance of continuous learning is often overlooked. Leaders should allow their teams to fail and learn from those failures, while providing appropriate guardrails to ensure the team is not taking on undue risk. It is critical that teams not only hold regular and honest retrospectives, but that they also act on those findings and track progress. Too often, these retrospectives can become a routine activity that does not add value. By checking in frequently to discuss lessons learned, teams can quickly determine whether a product is meeting customer needs or changes they can make to their internal processes to ensure smooth delivery.
5. The right metrics
When measuring Agile maturity, teams should consider both hard and soft metrics.
Hard metrics are often quantitative data that can be obtained from the tools that teams use. They include:
It is important to evaluate hard metrics over a defined period of time in order to measure continuous improvement. After collecting data for at least four to six weeks, leaders will begin to see whether a team is improving or remaining stagnant. Generally, teams that embrace Agile values deliver what they commit to and increase their velocity over time.
Soft metrics are more qualitative in nature and are usually obtained using surveys and observations. We find that high-functioning Agile teams often have:
An effective Scrum Master, for example, will regularly check in with the team to ask for their level of satisfaction with the project and process. High-functioning teams respect each other’s feedback, are open to discussing difficult issues, and support one another throughout the process. From the outside, a mature Agile team will look like a well-oiled machine. Teams will be producing high-quality, innovative work that is validated in increments, and they likely will have fun doing it!
As companies continue to deploy Agile practices across their organizations, it is important to remember that it is a journey of continuous improvement. Agile is a way of thinking, and it best serves organizations when it grows and evolves with the organization’s needs. By choosing the right flavor of Agile, building cross-functional teams with clear roles and responsibilities, and practicing strong leadership from the top, companies will be better positioned to ensure that they can deliver the value that Agile promises.
Another Metis Strategy Digital Symposium is in the books. Thank you to all of you who joined the session and to the global CIOs, CEOs, and entrepreneurs who shared their insights. More than ever, it is critical for leaders to tap into their ecosystem of peers and advisors for information, wisdom, and support as organizations navigate this complex and uncertain environment.
Below are a few takeaways from the event. Check out our YouTube channel and the Technovation podcast in the coming weeks for recordings of individual panel discussions.
Culture is key in the transition to hybrid work. Nearly 60% of attendees noted cultivating a strong culture among teams as the greatest risk to operating in a hybrid work environment. With many return-to-office plans in flux and a new wave of employees joining firms without stepping inside an office, executives continue to place a strong emphasis on employee experience, creating new norms around equity, inclusivity, and productivity, and creating new ways for teams to engage in a hybrid setting. For technology leaders, that also includes managing a growing ecosystem of collaboration tools and emerging technologies to find the mix that works best for their organizations.
Just as CIOs helped pave the way for remote work, they also will have a role to play in helping peers understand the art of the possible regarding the future of work. The road ahead is far from clear, but today’s technology leaders are adapting people, processes, and technologies to help create organizations that can pivot quickly in the face of change and seize new opportunities as they arise.
Innovation comes from empowered teams. The ability to innovate at scale continues to rise in importance as organizations work to future-proof their operations and drive enterprise agility. To do so, a number of executives said they are exploring how to democratize innovation capabilities across their companies and unlock the full potential of their teams. Debra King, SVP, Chief Information Officer and Chief Transformation Officer at Corteva Agriscience, discussed how she and her executive team developed a culture of ownership across the organization in which team members at any level in the company were empowered to come up with an idea and execute it. The leadership team then focused on removing roadblocks and providing resources where needed.
Similarly, Tim Dickson, Chief Information Officer at Generac, discussed how the company’s first hackathon spurred new ideas while revealing pent up demand for employee upskilling. Sixteen teams participated, and over half of the ideas presented have been implemented as production deployments, Dickson said. Generac also launched a digital center of excellence that helped scale the internal capability to bring new ideas to life quickly. These new ways of working made employees feel as if their voices were being heard, while providing an avenue to develop those ideas into new products and services for the company.
Security is critical to creating strong customer experiences. Technology leaders are taking greater responsibility for the ways their organizations’ products and services impact the customer experience, and security is an increasingly critical element of that. Mickey Boodaei, CEO of Transmit Security, which received the largest-ever Series A funding round for a cybersecurity company, shared his perspective on the move toward a passwordless future, the evolution of identity and authentication, and the fine balance between security and user experience.
For consumers, identity is critical to processes such as account opening and credential validation. Too little focus on security and vulnerabilities or compliance risks may arise. Too many security measures and the user experience becomes an obstacle. As authentication technology advances and passwords continue to pose a security threat to consumer accounts, Boodaei anticipates organizations will make a concerted effort to go passwordless.
Companies scale up AI efforts. As companies continue to refine their data strategies and identify opportunities to turn data into actionable insight, significant analytics and AI deployments are only expected to grow. Nearly 40% of respondents said they expect analytics to be their greatest area of investment in the year ahead.
Machine learning and AI, paired with an increasingly sophisticated understanding of customer needs, is powering new waves of innovation across industries. Barbara Lavernos, Deputy CEO for Research, Innovation, and Technology at L’Oréal, described an experience that crunches data to provide customers with personalized advice on their beauty routines. The company is also using AI to mine its extensive store of historical data as well as real-time consumer information to deliver cutting-edge products. For example, L’Oréal has trained an AI algorithm to read the thousands of online customer ratings and reviews of the company’s makeup products. With real-time insight, research and innovation teams can then make relevant product changes and target advertising more effectively.
At Johnson & Johnson, new technologies have enabled the company to reimagine consumer health and deliver care for patients in new ways. Augmented reality and virtual reality, paired with AI, have helped train surgeons eight times faster by combining digital imagery with insights about how to perform the best surgical procedures. AI and digital twins have helped Johnson & Johnson accelerate enrollment in COVID-19 vaccine trials and improve batch production of vaccines, from one batch every two weeks to two batches every half week.
Embracing change and becoming nimble is more important than ever. Of the tips IT leaders shared about sustaining a competitive advantage in the current environment, the most common was the ability to be nimble. That means being able to pivot quickly when the market changes, seize opportunities as they present themselves and stave off issues as they arise. Indeed, more than 75% of attendees said creating a culture that embraces uncertainty, as well as the ability to pivot quickly, would have the greatest business impact over the next six to 12 months.
Companies are making a number of changes to make their organizations more nimble, including transforming their operating model, adopting new technologies, upskilling employees and bringing in new talent, and driving innovation through partnerships.
Nimbleness is at the heart of many of today’s technology transformations, including the shift to embrace cloud, APIs, and other technologies, said Bernadette Nixon, the CEO of Algolia. These modern software architectures ultimately allow organizations to move more quickly and evolve their systems to support market shifts, further empowering teams to become more efficient and nimbler in their processes.
We hope you’ll join us for our next Metis Strategy Digital Symposium on December 9, 2021. Stay tuned to our website for more details.
With all the ways digital innovation has enabled companies to remain productive during the pandemic, one of the most positive outcomes is improved collaboration across traditional business silos. In my new book, Getting to Nimble: How to Transform Your Company into a Digital Leader, I discuss how enterprises have made these silos more permeable, creating greater partnerships along the way.
Consider the following five examples and how they could apply to your digital transformation efforts.
Talented technologists are in high demand at most organizations, tasked with helping teams in other divisions figure out the digital implications of their ideas and strategize accordingly. In many cases, these ideas come from the technologists themselves. Companies that provide such “T-shaped” career paths offer an enormous advantage, developing leaders with great breadth and depth of experience. When they ascend to “chief” roles, they do so with a much clearer understanding about how value is created within the enterprise.
Agile methodology has been a boon for collaboration across the enterprise.
The traditional “waterfall” method of development involves someone from the business side (outside of IT) placing an order with the IT department. The IT team then develops this order, with little input from the business side until the project is completed months later.
In contrast, agile development includes the intended audience or user of the project in development from ideation through completion. With each iteration, the user validates value, and features are amplified or turned off accordingly. In some cases, the entire project may even be scrapped as a result of what the team learns.
DevOps blends two traditionally siloed parts of the technology and digital domain: development and operations. In a traditional project development model, developers take a project from ideation through completion, and the operations team then moves it forward. There is often a moment in the lifecycle when the project is “thrown over the wall” from development to operations (even this phrase highlights the distance and disconnects between the activities of the two groups).
DevOps instead makes delivery teams responsible for production issues and fixes, whether legacy or new, drawing them into the lifecycle earlier. Greater levels of involvement and accountability make for better work products.
The migration from a project to a product orientation is another area that benefits from greater collaboration. Internal “products” are also good examples of this – think order-to-cash, onboarding new hires, or creating a mobile customer experience.
These products potentially involve great value, and the product teams are typically cross-divisional or cross-discipline: They might include tech and digital, marketing, sales, operations, and any other division to which the product is relevant. A product leader should lead the cross-functional team, and that team should be prepared to remain intact for a longer period of time than the typical project.
An early example of this type of project orientation comes from Atticus Tysen, Chief Information and Security Officer at Intuit. When Tysen became CIO, he brought with him a product orientation, defining products for IT to drive. By developing in long-term teams, each team member was able to develop a higher level of expertise in the product area than they would have in a more traditional project structure.
Data strategy has also driven more cross-functional thinking. Done well, all strategy should invite greater collaboration across traditional silos since value is truly driven at the intersection of the disciplines. Data strategy should apply everywhere data is gathered, secured, synthesized, and analyzed – across the entire company.
Many companies have found it useful to have a leader who drives data strategy on the company’s behalf. To do this effectively, that leader (whether the CIO, the chief data officer, or another IT role) should engage leaders in other parts of the company to ensure that the data strategy is as comprehensive and useful as possible.
These are just a few areas where stronger collaboration is happening across industries and geographies. Companies that fail to take advantage of these trends risk falling behind more nimble players in their industry.
Peter A. High is the author of GETTING TO NIMBLE: How to Transform Your Company into a Digital Leader (Kogan Page, Spring 2021) and President of Metis Strategy, a management and strategy consulting firm focused on the intersection of business and technology. He has advised and interviewed many of the world’s top CIOs and leaders at multi-billion-dollar corporations like Gap, Bank of America, Adobe, Time Warner Inc., Intuit, and more.
The pace of change is faster than it has ever been, and yet it is the slowest it will be from this point forward. There is a quotation that is often mis-attributed to Charles Darwin that states, “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change.” The father of evolution may not have said this, but it is an important point that applies to companies as much as it applies to species.
As you think about once successful companies like Circuit City, Blockbuster and A&P, each leaders in industries that they played in that no longer exist, each failed to adapt to changes, even though each could have pivoted to where the industry or customers’ tastes were going.
In 1955, the average time a company on the S&P 500 would remain on the index was 61 years. Fast forward to today, and it is closer to 15 years. Since 2005, 52% of the companies on that index have fallen off of it entirely. This is a remarkable tale of creative destruction, but is also is tale of innovation at a pace and scale that we have not seen before as rapidly scaling organizations take the places of the old stalwarts.
To quote Dow’s Chief Information and Digital Officer Melanie Kalmar, “What separates successful companies from those that have faded? Nimbleness.” She is not alone in this focus. When Shamim Mohammad, the Chief Information Officer and Chief Technology Officer of CarMax, was asked about the trends that excited him most looking three or four years out, he responded, “I do not know how the world is going to be in three or four years. It is hard to predict. What I am trying to do…is position [CarMax] so that we are ready to take those changes and be nimble, agile, and responsive: an organization that can move quickly. That is what I do because I cannot predict what is going to happen. I have to position [CarMax] to be that nimble company.”
In my new book, Getting to Nimble: How to Transform Your Company into a Digital Leader, I highlight five themes that are essential to harness to foster nimbleness:
Relative to people, you can do worse than to emulate the great practices of Rob Alexander, who has, for 14 years, been the Chief Information Officer of Capital One. He recognized early the changes that the digital age were foisting upon companies born in an earlier era. He posed a difficult question to himself and his team: “How do you become a great technology organization if you do not start as one?” Alexander set the goal to develop an engineering-centric technology division that would be oriented toward building technology rather than simply buying it and managing it. He wanted the organization to be oriented around a digital-first mentality.
Alexander and his team started by recruiting a core group of engineers who would form a software center of excellence. These people were recruited based on a pioneering spirit that each possessed. They would be the proselytizers for others.
Alexander and his team developed a curriculum to train existing employees on the technologies of the future, noting that learning agility was another key ingredient to cultural nimbleness. Finally, the company developed the gold standard of intern programs, regularly being ranked as number one on Vault.com’s list for internships. By giving great engineering and computer science students meaningful work to do in an innovative environment, the company began to compete with the stalwarts of Silicon Valley for talent, and the intern program allowed the company to get to know a wide swath of would-be employees deeply before handing out full-time offers. The yield on those offers rose, and the best among those new employees were given opportunities to rise quickly through the ranks of Capital One. The company’s nimbleness gave it a reputation as a talent factory that many wanted to join.
Relative to processes, retired four-star general, Stanley McChrystal, has become a guru to CEOs and other leaders on how to foster nimbleness. He recognized that the pace of change was such that if the American military did not modernize, it would not be successful in its critical missions around the world. The military had been silo’d by design, but McChrystal fostered collaboration across the traditional silos, bringing elite members from multiple branches of the military together.
He now counsels companies to do the same, pushing them to foster innovation through better collaboration. Process changes such as agile development, DevOps and the product orientation that many technology and digital organizations have instituted require non-traditional collaboration across silos and ownership of ideas from cradle to grave to a greater extent. Many companies have seen rapid increases in their ideation, throughput, and innovation success as a result.
Relative to technology, Rob Carter, Chief Information Officer of FedEx recognized that the crown jewels of the company were aging to the point where they might be the source of the company’s downfall if a new path forward were not forged. He had the humility to recognize that his team’s work for which they were rightly so proud had to be changed dramatically. His pathway to nimbleness revolved around five steps: first leveraging enterprise architecture to get a full accounting of ones technology portfolio, warts and all. Modernization only begins when a full documentation has been concluded. Second, he established a cloud-first strategy. The clouds flexibility, allowing an organization to scale up and back as necessary was sacrosanct. Third, Carter and his team focused on loosely coupled technology so that changes to one platform would not necessarily require changes to others. The use of microservices and application programming interfaces (APIs) also had many security benefits to boot. Lastly, he focused on standardizing the technology wherever possible. This is easier said than done in a company that is part airline, part trucking company, part logistics organization, part office services enterprise, and more. That said, he pushed for a common core of technologies to set standards to achieve greater simplification while de-risking the organization through minimized complexity.
Competition today is less company-to-company. Rather, it is ecosystem-to-ecosystem. Angela Yochem, the Chief Transformation and Digital Officer of Novant Health has been a model of building ecosystems to marshal innovation at levels beyond what one’s team alone might accomplish. Yochem has an unusual ability to meet an entrepreneur, learn about his or her company and make rapid judgements about potential mutual value that might derive from partnership. An example is Zipline International, the world’s only on-demand drone logistics service. Along with other technology and digital executives, she met with the company’s founder and CEO Keller Rinaudo to hear the story of the company’s genesis and its mission, at the time primarily helping deliver medical supplies to people in need in countries that suffered from road infrastructure issues, for example. Yochem translated what she heard to Novant Health’s business and saw an opportunity especially in light of the pandemic. She and her team became the first organization in the U.S. to be granted a Part 107 waiver by the U.S. Federal Aviation Administration (FAA) to use drones for distribution of medical supplies for Covid-19 pandemic response. The vision is growing, as over the next two years, the partnership plans to expand beyond emergency operations in the Charlotte area, where Novant Health is headquartered, to regular commercial operations to serve health facilities and, ultimately, patients’ homes across North Carolina. Nimble leaders and organizations recognize great ideas, translate their relevance to one’s own company, and build the partnerships that can make a difference rapidly.
Finally, during a time of such rapid change, one might think that strategy is becoming less relevant. There is an African proverb that says, “If you want to go fast, go alone. If you want to go far, go together.” One might add to those important words, “and take a map.” The company’s strategy is the map. Especially during times of great change, having a strategy at the enterprise level translated to the divisions and functional areas and to the technology and digital team through to data strategy is even more important. Granted, changes in the economy, the competitive landscape, and one’s own company, to name three of many factors, will require modifications to those plans as the assumptions behind the plans require changes, but having the well-articulated plans is essential.
Shailesh Prakash, the Chief Information and Product Officer of the Washington Post underscores this need. A decade ago, when he joined the company, it was languishing: ad revenues and subscribers were decreasing at an alarming rate. Prakash helped set the strategy that would bring the traditional print and digital sides of the house closer together. In so doing, he set the Post on a path to a better experience for readers and for the company’s reporters and columnists. He discovered through his collaboration with his colleagues that the company’s publishing platform was antiquated and a source of frustration. Prakash set a strategy to improve the platform. In so doing, he leapfrogged the industry to such a dramatic degree that it occurred to him and to his team that the platform, itself, could be a business for the Washington Post. Arc Publishing was born, and it is now on a path to being a $100 million business annually for the Post. Nimble leaders set bold and well-articulated strategies that rally one’s team to drive new value to one’s company.
Please note the examples given: a financial services company, the American military, a courier conglomerate, a healthcare company, and a media organization. None of these are traditional technology companies. They are not digital native companies with built in advantages of a recent founding. These are likely companies yours, each in challenging environments. Each drove change rather than being driven by it. This is essential in a time when change is coming so rapidly. Only the nimble will survive and thrive. Emulate the lessons of these great leaders.
Peter High is President of Metis Strategy, a business and IT advisory firm. He has written two bestselling books, and his third, Getting to Nimble, is out this month. He also moderates the Technovation podcast series and speaks at conferences around the world. Follow him on Twitter @PeterAHigh.
Whether facilitating a rapid shift to remote work or developing new digital capabilities for customers, the past year has reinforced the mandate for technology leaders to deliver greater value for customers faster than ever before, and to enable that speed and agility at scale.
In a poll of more than 100 technology executives at the Metis Strategy Digital Symposium, 42% noted speed to market as their key measure of their company’s nimbleness, with customer satisfaction coming in second with 27%. The findings underscore the increasingly strategic importance of CIOs and other technology leaders as they enable their organizations to succeed in the digital age.
For example, speed and customer-centricity took center stage at Dow as the company revamped its IT organization in recent years. Led by CIO and Chief Digital Officer Melanie Kalmar, the company re-oriented its work around services, and created product teams that were accountable for delivering those services from end to end. Throughout the transformation, “we focused on the customer experience, the employee experience, and working at the speed of business,” Kalmar said.
That mandate became more acute during the pandemic as many leaders transformed their organizations overnight to serve customers and employees that suddenly faced new, often more difficult, circumstances. “That speed and agility that we’ve always talked about as being important starts to have a lot more meaning when you realize you’re helping your friends and neighbors,” said Kimberly Johnson, Chief Operating Officer at Fannie Mae.
Dow and Fannie Mae are two of many companies born before the digital age that are transforming their people, process, technology, ecosystems, and strategy to seize new opportunities and stave off threats. Throughout our recent conference, leaders from Capital One, CarMax, The Washington Post, Novant Health and many more shared how they have enabled their companies to move quickly by embracing DevOps, shifting to product-oriented operating models, and revamping their talent strategies to bring in new and diverse skill sets.
You can find more insights from the Metis Strategy Digital Symposium on our YouTube channel, including conversations with:
