Digital Transformation Is Out. Disruption Is In.

I hereby declare that the age of digital transformation is over. In its place, we now live in a world of compounding disruption.

Allow me to clarify.

Digital transformation is still with us, but it must now be part of our operating system. We should always be working on ways to use technology to improve our business operations through automation and improved intelligence, to leverage technology to innovate our products and services, and to better reach, serve and retain our customers. This is our baseline. We now need to layer on top of digital transformation the reality of disruption, and all that comes with it.

Let us ponder the recent history of unanticipated disruptions. My list includes:

• The COVID pandemic, shutdowns, changes to the workplace and employee and customer expectations
• Supply chain disruptions
• The vanished workforce
• War in Ukraine
• Increasingly severe weather events
• Inflation – exacerbated by the vanished workforce and supply chain disruptions
• Soaring energy costs
• A potential recession (or is it certain?)

And that is just in the past three years. What comes next to change our plans, priorities and responses? Is this our real new normal? Being bounced from crisis to crisis, from interruption to interruption, from unplanned event to unplanned event?

If so – and I believe it is so – we all need to build increased capabilities and capacity to adapt. If uncertainty about what comes next is so high and increasing, it could be that all we can do is respond. But how can we respond and adapt in a positive rather than a negative way?

Based on my experience as a CIO and CTO, here are four things we can do to build our adaptive powers:

1. Loosely couple as much as possible.

This includes architecture, vendor and tool selection and process design. We have all heard about and hopefully implemented some form of micro-services architecture, but let’s extend that thinking to everything in our lives. In a services architecture, we define publish / subscribe roles among the services. This allows us to replace a service, and as long as the subscribers to that service are getting what they need, there are no service issues.

Replaceability has become so important to me that it is now my primary factor in architecture decisions. The ability to replace, at low switching costs, a service is often more important than other factors. I have extended this thinking into my vendor selection and negotiations. In today’s uncertain environment, how do I know if the market leader today will be relevant in three years? The fact is, I don’t, so I push for shorter contract terms, then architect and deploy the vendor product in a way that reduces switching costs and timelines. Everything becomes replaceable (except my teams).

2. Simplify, standardize, and simplify some more.

It is difficult (if not impossible) to adapt quickly if we are weighed down with complex processes and systems. Most of us have had the experience of having to upgrade a system and its twenty years of customizations. Most of us have had the experience of selecting and implementing systems that attempt to support exception-driven and complex processes. These experiences teach us that complexity is the enemy of agility. If I am correct about our disruption-rich future, it is time to reduce complexity by simplifying and standardizing ours and our organization’s processes and systems. System and process bloat slows us down.

3. Build an empowered, resilient, and adaptive culture.

Culture matters, and a culture that can roll with the punches is essential. How do we build such a culture? It starts with us (culture cascades from the top). Empowered cultures are high on trust and low on control. We cannot move quickly if every decision is made by the leader and no one can move without permission. Resilient cultures are adept at low-risk experimentation and recovering from mistakes. Adaptive cultures are devoid of blame. If something goes wrong, we focus on fixing the process not the person.

High-performing organizations make culture a priority. In my method of planning, we plan around three themes: 1) Improve the customer experience, 2) Improve the employee experience and 3) Improve the IT experience. Inside of each theme we define, select, and prioritize specific things we will do to improve it. Improving the IT experience has included priorities such as: Get good at lean. Get good at agile practices (see below). Reduce the friction of the deployment process. Define and support career paths.

To improve our culture, we selected a cultural framework (I use the framework from the Center for Innovative Cultures) and we measure ourselves against the framework and implement specific things to close the gaps. Not only does this improve our culture, but by including specific actions in our plans, we send the message that a high-performing culture matters.

4. Get good at agile practices.

To inspire the attitude and practice of agility, shorten delivery cycles to no more than two months. In practice, we identify a need and define the solution, but then we rigorously prioritize the highest value outcome we can deliver in no more than two months (or one day or two, four or six weeks – you get the idea). We deliver that outcome in a working, complete-enough form, and then work on the next highest value outcome that we can deliver in no more than two months. That way if a disruption comes along, we can change our plans and priorities but have in place something that is working, usable and adding value. And, it reinforces the idea that we can change as needed without throwing anything away.

There are plenty of other things we can do to build the capability and capacity to not only survive but thrive in the age of disruption. No matter what path we take, for me this has become my highest priority.