What is Web3 and Why It Matters

January 11, 2022 Leave a comment

I’ve waited a bit to weigh in on Web3, to see how it evolved and whether it actually took a meaningful and significant direction. While not exactly a new concept — many credit the term itself to Ethereum co-founder Gavin Wood in 2014, even though it has been discussed since the early Web 2.0 days back in the 2000s — Web3 as we currently know it today exploded onto the global stage in 2021 along with the metaverse, another popular and closely overlapping/adjacent concept.

Like its various predecessors, Web3 represents a major rethinking for a new iteration of the World Wide Web. This vision is both far-reaching and as we will see, truly transformative in nature. It requires us to fundamentally shift our ideas about many important concepts in the realms of digital data and the online world in general. The good news is yes, we do now have a general sense of how Web3 has evolved and whether it has become a significant force in the future of the Web.

My take: Web3 has very much arrived as a major trend with a towering stack of tech behind it and quite impressive economic results to match. It’s a trend that is now is increasingly informing technology evolution as a whole. Most organizations now need to understand what Web3 is and how it will affect their organization’s technology development trajectories and digital strategies going forward.

Related: Web3 is highly potent form of network orchestration, one of the most important and powerful digital strategies.

The Elements of Web3

Web3 Defined

Now, the good news is that explaining Web3 can be achieved with some fairly brief definitions. The most cogent is simply the notion that the future of the Web, especially as it relates to creating, storing, and exchanging information, can be better achieved by incorporating decentralization based on blockchains. That’s really it, at its core.

That doesn’t sound like much, especially to the uninitiated, and probably wasn’t what many expected. But as it turned out, this idea of deep decentralization has proven to be a uniquely potent one that has given rise to several very significant and useful shifts. One proof point: Despite the ups and downs of the crypto markets, cryptocurrencies, including now NFTs, have resulted in nothing short of a global phenomenon that has led to the creation of hundreds of digital currencies, exchanges, application ecosystems, and supporting frameworks that has a combined worth today in the trillions of dollars.

Naturally, like most new higher-order technologies and the often disruptive changes they usher in, there are many underlying concepts and moving parts to them that make them work, which I’ll explore shortly. There are also a number of important implicit assumptions in the designs of Web3 technologies, that if one doesn’t understand going in, makes the first principles and design choices behind them seem both confusing and needlessly complex even after a good bit of study.

The Motivation for Web3

The why behind Web3 is perhaps the most interesting question of all. Let’s explore that first and then see what Web3 is really made of.

Web3 is borne of the growing criticism that the Internet of today tends to favor large, centralized organizations like Google, Amazon, or Meta (Facebook) over individual users — a trend I’ve long lamented — and that this should change. Conversely, there is a belief that decentralized, more autonomous infrastructures can tilt the balance toward a more user-controlled environment with various benefits that include (but are not limited to): The reclamation of data sovereignty back to individuals, improved — and really, total — transparency in our digital systems, and the inability for bad or misguided actors to disrupt or co-opt our shared digital environments that follow these rules.

Furthermore, Web3 is borne of the direct knowledge of the ongoing success of certain well-known radically decentralized systems to change the status quo, most notably Bitcoin and its now-famous underlying blockchain. It has essentially resisted all comers to date, many of which have been quite determined. Bitcoin’s underlying ideas have proven to work in practice over a sustained period of time (over a decade now and counting.) At the root of this is a growing belief that radical decentralization has wide applicability to much or most of what we do online, and that blockchains are so far the best vehicle we have to realize this.

Crypto Roots, Yes, But Much Broader Applicability

The flourishing of cryptocurrency over the last few years has certainly created a gold rush mentality, luring increasingly large investments, including vast venture capital involvement from the most sober firms. Crypto has also attracted to it some of the brightest tech entrepreneurs and makers in the world. The result has been nothing short of a global high-octane creative genesis that’s resulted a extremely dense, deep, and at times quite difficult to navigate set of interconnected projects, technologies, stacks, ecosystems, currencies, exchanges, and enabling applications. The sheer vibrance and velocity of these efforts have elicited great excitement, with numerous innovations and breakthroughs having occurred along the way.

It’s crucial to appreciate that back in the early days cryptocurrencies originally had — and still continue to have — a central problem to solve, namely answering the question of who would ever actually trust them as forms of currency. And they eventually came up with effective new models that successfully created the needed faith and buy-in by people in a way that still, to me, seems remarkable today. The premise is that the blockchains underneath many popular cryptocurrencies embody designs and rules in code that can be empirically verified even by the non-technical. One doesn’t need to technically understand the blockchain deeply in order to verify it works as advertised and trust it.

So, getting back to first principles, I would argue that at the core of Web3 concepts is the crucial and increasingly problematic question of trust in digital systems. How do you know who you can genuinely trust with your data? Who really owns and controls the data we store online? Is it possible to create ground rules that everyone is guaranteed to live by that fosters new trust? Can we store data online in a way that we will always remain in control of it? Are there designs for systems that make us hopeful that the online world can be a place that is safe for everyone over the long term? All of these questions are addressed inherently and explicitly by Web3 technologies in various interesting and practical ways.

Web3 is Based on Decentralized Trust

So I would also observe that trust is the fundamental basis for all human relationships. While Web3 is still working on trusted identity and I find it unfortunate that concepts like digital wallets — instead of people — play perhaps a too central role in the design of many of the resulting efforts, it’s clear that communities of individuals have come together to trust a given distributed system of data and its associated rules (blockchains). This is at the very core of how many Web3 efforts have succeeded as well as they have.

The blockchain is too complex a concept to go into detail here, suffice to say that what it brings to the table is a set of shared and well-documented processes for managing digital data, enforced consistently and relentlessly by code. If those behaviors are reliable, highly valued, and then profoundly decentralized in such a way that they cannot be easily co-opted, lost, or abused, then a community can — and apparently will with the right value proposition — form around it. And I do mean a human community. That this will happen has now been proven over and over again in the living laboratory of the online world.

Short version: A blockchain is like a digital nation with clearly enumerated rules that is made up of nothing more than people’s data and the rules of its operation codified in its very structure. Yes, these are today often digital currency records, but it can be and increasingly is digital information of any kind.

Once trust in a digital system exists and is sustained, and once a community has formed around such a living digital system — remember, it’s a dedicated decentralized network with countless distributed copies of the data that’s coupled with matching and well-documented rules realized rigorously in code — then the next outcome can safely and by design take place: Transactions. Or what more high-level thinking would call commerce or value exchange. This focus on transactions makes Web3 notably different that previous iterations of the Web, which certainly enabled the realization of e-commerce and other digital business models, but did not really have them in their core architecture.

Web3 in Practice

Web3 then is the realization that we now possess very specific and working designs for trusted decentralized systems of data with matching rules that can effectively attract human communities around them. This allows safe, trusted commerce at scale and genuinely seems to work well over time. These systems, with very specific design constraints, appear to foster human trust and cultivate communities if they do so in a way that provides shared value.

Again, like so much on the Internet, it’s taken countless trial and error to get where we are with today with Web3. It’s not a accident but a distributed yet mostly informal design effort in its own right to find ways to build better networks of digital systems, although organized groups do exist including the Web3 Foundation.

So how does Web3 actually work? This is where, from an implementation standpoint, that the result is nothing short of the proverbial technology rabbit hole. Web3 on a conceptual and technology level goes deep. Below, I explain its various parts and how they fit together as I see it. Just be aware that it has taken some of the most brilliant people in the world to have figured out the pieces and make them work together in a unique way that is compelling to the marketplace. The result has attracted the intense interest and participation of thousands of technologists and many millions of regular people around the world, pulled in by either the arguably positive notions that Web3 embodies, the evident results that it has produced, or both.

The Technologies of Web3

While there are a vast and oft-bewildering array of technologies, frameworks, and chain implementations that fall under the Web3 umbrella, the following are the core technologies most often associated with the trend:

  • Blockchain. A data storage and retrieval system in which a typically immutable record of data and associated transactions is kept, often involving cryptocurrency but can be any type of data, are maintained across numerous distributed computers of multiple ownership that are linked in a peer-to-peer network. Distributed ledgers are similar but may not be on a peer network or have multiple ownership. Smart chains have emerged that have sophisticated smart contract and value-add AI features built-in. Consensus rules are often established to determine which data is actually stored as the official record.
  • Wallets. In Web3, a digital wallet, usually associate with cryptocurrency, is a device, application, or service which stores the public and/or private keys used blockchain transactions. In addition to this prime function of securely storing the keys (the actual currency is stored in the chain), a cryptocurrency wallet often also offers the functionality of encrypting and/or signing information. Signing can for example result in conducting transaction or executing a smart contract.
  • Decentralized Identity (DID). Decentralized identifiers are a newer type of identifier that enables a verifiable, decentralized digital identity. They are an important component of decentralized web applications. I believe they are vital to making Web3 a fully evolved architecture for the future. They are based on the concept of self-sovereign identity. A DID identifies any entity (such as a person, organization, object, data model, abstract entity, etc.) that the creator of the DID decides that it identifies. These identifiers are designed to enable the controller of a DID to prove control over it and to be implemented independently of any centralized registry. Over time DIDs are likely to become a core identity system of Web3 applications, allowing stronger communities, more trust to be established, and enabling many high value use cases. The respected W3C has now weighed in on a proposed standard for them as well, further bolstering their credibility.
  • Exchanges. A exchange is a service that handles cryptocurrency and other forms of digital value that allows users to trade for other assets, such as traditional fiat money or other digital currencies. Exchanges are a key source of liquid value and usually accept credit card payments, wire transfers or other forms of payment in exchange for digital tokens or cryptocurrencies. Exchanges connect the Web3 world to the traditional world and are in numerous ways a crucial service to allow transactions to cross between them. Exchanges have been instrumental in fueling the crypto boom and will likely be just as key to the broader evolution of Web3.
  • Decentralized apps (dApps). An application that uses smart contracts that run on a blockchain. Just like traditional apps, DApps provide a particular function or use to its users. Very much unlike traditional applications, however, DApps are technically not owned by any one entity. Instead, DApps distribute tokens that represent ownership. These tokens are allocated according to a pre-designed algorithm to the users of a blockchain-based system, diluting ownership and control of the dApp. In this way, since no one entity controls the system, the application becomes decentralised. A lot of the utility and innovation in Web3 comes from the add-on dApp ecosystem, which can work with data in the blockchain according to the smart contract associated with it.
  • Smart contracts. Smart contracts are predefined digital agreements stored on a blockchain that run when predetermined conditions are met or transactions are conducted. They are usually used to automate the execution of an agreement within the rules of the blockchain so that all participants can be absolutely sure that the outcome will take place, without any intermediary’s involvement or effort. Smart contracts enable rich scenarios for ensuring that economic activity follows the rules and that the digital economy the blockchain support is open, transparent, and 100% rule-based in executable code. They are rapidly becoming the backbone of Web3 transactional systems and should in theory, also mostly eliminate the need for legal recourse.
  • Distributed Autonomous Organizations (DAOs). A DAO is an organization represented by the rules encoded as a software system that is entirely transparent, controlled by the organization’s members and typically not influenced by a central government or authority. DAOs show what a genuine digital organizations might truly look like. They will help reshape management thinking and theory for the next decade at least. An example of a DAO is Augur, a decentralized prediction market platform.
  • Metaverse. While Web3 apps can come in any type of UX form factor, one of the most interesting is the Metaverse, which is a still-mostly-notional deeply integrated virtual world that allows people to visualize, experience, formulate, publish and monetize digital information and content using virtual reality and other interfaces For now, this is still in early evolution but it will allow seamless 3D experiences that enable shopping, business deals/transactions, education, advertising, and entertainment and may other forms of business activity with a full multi-channel, multi-currency financial ecosystem behind it.

What Organizations Should Prepare for with Web3

The advent of Web3 has a number of significant yet often uncomfortable implications for enterprises that seek to adapt and take advantage of the energy, vibrancy, and innovation in the fast-growing sector. Or more importantly, avoid to disruption that it likely to occur in many key areas, from payments and e-commerce to customer experience and digital transformation as a whole.

Here’s is my best advice heading into 2022 on what the typical organization should be preparing for with Web3:

  • Assess Web3 adoption in your industry. Understand what your competitors are doing, from blockchain-based loyalty programs and crafting their assets into NFT offerings all the way up to creating crypto payment strategies and building dedicated metaverses for customers, partners, and even employees. I’m seeing quite a bit of activities across all these fronts as we head into 2022 in my client conversations. Organizations in most industries should be conducting at least a high level assessment of Web3 competitive activity.
  • Research and educate your staff on Web3. While Web3 is very much emerging technology, some parts of its are getting a decade or more old, and the subject matter is both large and complex, so time should be invested now, early on. Now is the time to begin getting your digital and IT staff up to speed where it makes the most sense. Basic blockchain education is a great place to start, but understanding cryptocurrency markets, smart contracts, and DAOs are all good areas for strategic staff right now, from digital strategists and transformation leads allway the way to the office of the CTO.
  • Build Web3 capability . The reality is that most organizations will be interacting a growing portion of their business in various blockchains. Understanding how to conduct transactions safely, securely, and efficiently is key, as is understanding and maintaining a perspective on the strongest offerings, along with their pros and cons will go a long way to being prepare as vendors and suppliers increasingly conduct business using Web3 models.
  • Revise digital strategy roadmaps with eye on opportunity. Once the Web3 competitive and opportunity landscape is understood, make time and resources available to incorporate it into the broader digital strategy and transformation roadmap.

Web3 is part of a major new generation of technology evolution that will dramatically change business and IT for the long term. It has far-reaching implications that can help enterprises identify significant opportunities as well as avoid disruptions in the road ahead. I strongly urge all organizations to begin to assess Web3 uptake in their competitive landscape and prepare for the necessary activities in technology adoption and evolution. Like many emerging technology developments at the present, Web3 also has significant business implications as well that will require tech and business leaders to come together to create and validate their roadmap going forward. It’s not an easy time, but Web3 represents enormous promise that will also remake numerous industries in the process.

Additional Reading

The Strategic New Digital Commerce Category of Product-to-Consumer (P2C) Management

A New Digital Experience Maturity Model for Improved Business Outcomes

Ray Wang’s View of the Metaverse, Web3, and DAOs

Why Microservices Will Become a Core Business Strategy for Most Organizations

Filed under Analysis, The Web, Web3

Why Community Belongs at the Center of Today’s Remote Work Strategies

September 23, 2020 13 Comments

At the top of most organizations’ priority lists right now is how to keep their workers productive and engaged. Except for in-person businesses and essential workers, the workforce has largely been physically disbanded until the pandemic comes to an end, one way or another. In unprecedented fashion, technology has suddenly become one of the single most important tools in moderating the effect of shuttered offices, physical distancing, and remote work from home.

However, most organizations have largely been paving the proverbial cowpath. Meaning that they’ve largely a) just turned up the volume on how often they use their existing meeting and collaboration tools such as Zoom, Slack, Teams, e-mail, and conference calls, and b) not really been able to think about new and better ways they could work together. Ones that inherently take real advantage of how people are now working in a much more distributed fashion.

From my experience in spending much of my life helping organizations better adopt and use technology to improve the workplace, I believe that the focus on using these tools was necessary. However, it is also woefully far from sufficient.

The Most Popular Modes of Collaboration

The Journey of Understanding To Get to the New Future Of Work

Simply put, the imperative today for getting remote work right is this:

To revitalize and thrive in our current global situation, organizations can and must do better in rethinking their near-term future state in terms of the digital art-of-the-possible.

Our workers need it, our customers deserve it, and the reality is that the future is already here, but unevenly distributed as Mr. Gibson famously noted. That means we know what many of those better ways of working actually are. But they are just foreign enough that they’ve largely stayed on the margins of many our workplaces so far. Yet as we’ll see below, within these new ways lies astronomical riches if we are prepared to act. Now most organizations are in the middle of being forced act. Described herein is what they can fully achieve, if they are to truly thrive in their current distributed state.

Related: The Playbook to Go About Rethinking a Post-2021 Workplace

The Most Important Discoveries in Digital Collaboration

In the 30+ years that we’ve all been digitally connected worldwide via the Internet, we have collectively made many profound discoveries about how people can come together through computer networks to create mass shared value. Since I find that this is still not as common knowledge as it should be, I’ve collected together the most significant insights about digital collaboration that we’ve acquired from the vast and infinitely innovative living laboratory that is the global Internet. Here they are in rough order of importance:

a) Digital networks can create value exponentially according to their size.

This has been known going as far back as Metcalfe’s Law. Networks have the potential to create enormous value for those using them. Yet the networks through which we collaborate today — whether digital or in life — generally underperform greatly and don’t come anywhere close to reaching their full potential. We don’t communicate and collaborate nearly as much as we can or should. We also over-communicate (think CC: fields in e-mail) and over-collaborate when we shouldn’t or don’t need to. There were some good reasons for this, in the past. But no longer.

b) Whenever we have removed the barriers to connecting and collaborating between people, much more value has been created.

Our lessons over the history of digital networks has been nothing short of revolutionary. Perhaps the most essential is that we have simply made it far too hard to connect, share, and collaborate with each other. Many examples exist: Not having access to the necessary networks, or the right conversations. Finding the right channels, the best apps, having the necessary permissions, being in the appropriate groups, teams, or project. Having access to experts, leaders, and far-flung colleagues, all in order to just get our work done. For management and control reasons, we’ve often made it too difficult or complicated to engage, which is surprisingly easy to do with technology (even one additional step to participate sharply reduces said participation says the research). We often make the process of collaboration take a great many steps (the early and profound lessons of Wikipedia should be required reading by anyone in charge of human collaboration at any level in an organization.)

Thus in our quest to design collaboration, to control it, to shape it, and direct it, to secure it, and make it safe, we also tend to kill it. Human collaboration is in reality a delicate and easily disturbed flower, an often unwieldy balancing act of human exchange between people who are often quite different themselves and work/think very differently from each other. So we must remove all possible barriers to helping them engage. And we must take great care not to add new barriers. It’s worth noting that this is why Twitter and LinkedIn work so well (they only have one main place to type), and it’s why e-mail (which only has two fields and can generally talk to anyone else on Earth who has a connection) has lasted so long while other technologies have fallen by the wayside.

c) The biggest barrier to human collaboration is inability to participate.

For the reasons cited above, we’ve learned that we must work assiduously to make it possible for as many people to participate in a given process as possible. Whether this is a team, project, initiative or vast corporate program, we have learned that we generally have rather poor foreknowledge on who the full range of stakeholders in the process actually is and who should be included. We then get them involved far too late in the process when we finally do learn who all those stakeholders are. To add insult to injury, we then we make it far too hard for them to engage with us, so historically they haven’t.

This insight is so important, so critical to the success of collaboration at any level, especially the virtual kind. It is because of these barriers that when I wrote Social Business By Design, I took great care to state that the fundamental principle of effective collaboration must be “anyone can participate.” I mean this literally: Unless there is a very good reason not to (and there usually isn’t), in order for you to begin to tap into anything close to the full potential of digital collaboration, you must open it up by default to any stakeholder who feels they have a stake in what’s being done. I realize that this can be hard, for many reasons (which is my point.) But it is very important, even critical, to seek to address.

d) Asynchronous collaboration at scale is the richest and most powerful model for working together that we know.

Throughout most of human history, we’ve collaborated in real-time, face-to-face. It’s great for small groups, but soon breaks down when more than a few people are involved. That’s largely because it stops everyone else from working (since only one person can communicate with the group at a time.) Asynchronous collaboration has existed since human writing has existed, but it’s long been a niche method because it couldn’t travel fast enough or scale well enough. With digital networks however, both of those obstacles completely fall away. Now everyone can communicate and collaborate instantly and at the same time without interrupting anyone, and there is no limit to how many people can collaborate this way.

The gift this insight gives us is remarkable. The fact that we don’t realize the immense power that this gives us to work with each other in a vast hive of parallel yet deeply connected flows of work is because it is still quite new. It’s just a decade and half old or so in real terms, compared to the other methods that have existed for thousands of years in some cases. Asynchronous collaboration has led to some of the most remarkable outcomes in fields such as open source software (now the dominant model for how software is created, no coincidence), pharmacology, hard sciences, social media such as YouTube (the most popular TV channel on Earth now, all asynchronously co-created by us), shared public information (see: Wikipedia and similar sites), crowdsourcing, and much more.

e) The collaborative model that taps most directly into these world-changing insights is the online community and enterprise social network.

All digital communication and collaboration is more efficient than the physical models that came before it, even if they don’t quite replace the human dimension of the in-person experience. Within digital communication and collaboration there is again an enormous variability in what scales and how many people can simultaneously contribute and create value.

Relentless experimentation by the millions of people using the Internet has consistently and repeatedly found certain models that enable much higher level of participation with much lower level of friction. They also delivered noticeably better results as an immediate consequence. Social media was a direct outcome of these experiments. It’s what worked best in large scale communication and within businesses, in collaboration as well, which became known as social business just a decade ago. Of all the forms of social media, it’s the online community and enterprise social network which best fits the bill for complex collaboration, inherently takes advantage of how digital networks create value, and for truly empowering knowledge workers in almost any given situation.

Comparing the Models of Teams, Projects, and Communities

Open Collaboration is the Most Strategic Model

I’ll be very clear then as to the core lesson here: By default the single best model for digital communication and collaboration — and the one that produces the most human engagement and the richest outcomes — is the online community or enterprise social network. Nothing else compares in terms of openness, transparency, ability to enable wide participation, ensuring diversity, encouraging agile business methods, collecting and preserving knowledge, doing all this at any magnitude, and the list goes on.

In fact, a whole revolution in work has already taken place with these ideas and platforms, but has been more limited than many proponents would like. it’s just that we haven’t had the imperative like we do today, with almost entirely distributed workforces forced upon us. While many organizations have experimented with these new models, and not given them the time or resources to make them deliver their power and value, others certainly have over the years (see my social business success series for case studies.)

It Is Up To You To Deliver a Revolution in Better Digital Work

There are two visuals shown above that make a powerful case for a) the scale and sustainability of large-scale open collaboration and b) why community tends to be the better model for most work including projects, enterprise-wide initiatives, and a lot of teamwork. While chat tools like Slack do have value at the team level, they are absolutely not focused on or able to realize the full capabilities of our networks or our people as a whole. Collectively, wo actually do know today what the best digital models are for many types of work. Please realize that I’m not prescribing communities/ESNs for everything. But I am saying that we should make them the default choice today to unsilo our organizations and fully unleash our true potential as individuals and organizations.

In this time of vast disruption of business and life, when the ways of working that we’re used to have simply gone away, the answer is not to double down on the approaches of yesterday that were not designed for the highly distributed world of work today. We now know of much better, more human, more engaging, and more effective ways of working together. As leaders, we must now better connect and cultivate our workforce, customers, and partners as a top priority. That means we must deliberately and strategically cultivate these stakeholders as the communities that they really are and which actually power our organizations. We simply must work in these news ways in order to lead them into a much brighter and more successful future.

Additional Reading

There is a great deal of research and thinking that has gone into to understanding how the concepts above were discovered and can be situated successfully in most organizations. Here is a full reading list of what we know about social business (online communities and enterprise social networks — as well as other related tools/platforms like them — that can dramatically improve how people work together digitally):

Revisiting How to Cultivate Connected Organizations in an Age of Coronavirus

How Work Will Evolve in a Digital Post-Pandemic Society

What We Know About Making Enterprise Social Networks Successful Today

Revisiting How to Cultivate Connected Organizations in an Age of Coronavirus

My 2020 Predictions for the Future of Work

A Checklist for a Modern Core Digital Workplace and/or Intranet

Creating the Modern Digital Workplace and Employee Experience

The Challenging State of Employee Experience and Digital Workplace Today

The Most Vital Digital Management Skill: Network Leadership

Let the Network Do the Work

More Evidence Online Community is Central to the Future of Work

Online communities learn new practices, report higher ROI

Can we achieve a better, more effective digital workplace?

How digital collaboration has evolved | ZDNet

The new digital workplace: How enterprises are preparing for the future of work | ZDNet

Filed under Analysis, Digital Workplace, The Enterprise, The Future of Work

It’s Time to Think About the Post-2020 Employee Experience

June 4, 2020 2 Comments

In these fraught times, most of us find that it’s quite challenging to think or plan about business longer term. Yet the benefits of doing are not only self-evident, it is likely critical at this moment to successfully navigate the challenging journey that now lies ahead of us. One of the most important topics to address in this new reality is how to provide a healthy and effective workplace for our workers.

We are now likely at the end of the beginning of the pandemic. As businesses start to open up, the first major wave of return to work (RTW) protocols have now been released by various regional governments. They give us a detailed sense of the issues and capabilities — exemplified by this excellent RTW checklist from SHRM — that we’ll need to begin putting in place to begin transitioning to what will become our next situational phase of work.

Just as importantly, such views also give us a reading on what we must consider to embark on the process of determining what the new long-term future of our employee experiences will be. One sobering data point: As little as a quarter of workers are willing to resume working in a physical office post-COVID according to a recent Gallup survey. This data has major ramifications, not the least that this means that most organizations will need to provide a remote-first employee experience for the foreseeable future.

The Post-2020 Digital Employee Experience

Second, both our businesses and workers are not in their best shape. We’ll need to focus on wellness and taking the care of the fundamentals when it comes to healthy workers, both physically and psychologically. So too with the business, to ensure it recovers and is better adapted to transformed markets, different demands, and new operational challenges.

While this future is still very uncertain, given the continuing changes in the world, some key elements are abundantly clear: We won’t return to the physical workplace that existed pre-COVID. Nor will we be staying in our present digitally remote environment in its current state, given its apparent shortcomings, especially not when an entire organization now has to run mostly virtual. In this virtual state, the top challenge consistently reported across many surveys is adequate communication and collaboration, most recently confirmed in a broad survey by Buffer, though there are plenty of other challenges to remote work/work from home (WFH) as well.

The Post-Pandemic Employee Experience Will Be Mostly About the Digital Workplace

So much as already happened this year when it comes to employee experience, from the dramatic and sudden shift to remote work in March to a much greater focus on employee wellbeing and health subsequently, among a whole host of rapid and disruptive new shifts. And so much more was going to happen — please see my rueful interview with DWG’s Paul Miller about the many changes in trajectory — until the pandemic hit. Now it appears that 2021 will be the breakout year for a much different and more useful view of employee experience.

As many of you know, I’ve long sought to create unifying visuals of our digital workplaces and human collaboration through technology, as well as provocative views to help us conceptualize the vital work we have in getting technology right for actual use by humans in business. My main theme as always is that technology must be foremost about people, or what is the point?

Now it’s time to take everything that has happened recently, add in all the major tech and societal trends that were feeding into 2020, and paint a comprehensive new and updated picture to see where we are now with employee experience. I’ve already initiatied that process with my informal employee experience board of digital workplace practitioners, IT leaders, user advocates, researchers, vendors, and others.

What does this look like exactly? For the overarching concept, I’m already on record saying that digital experience is ultimately the only thing that truly matters in the end, and that particularly includes employee experience. Everything else is an implementation or vendor sourcing detail. Instead, it’s the nature and quality of the journey itself, the trust and value of the data within it, and communal human connection through digital touchpoints that is by far the most important aspects which we need to get right (and fix) for our workers, customers, and partners.

Because employee experience is badly broken today, congested by ever-accumulating digital channels, an endless multitude of (albeit useful and needed) apps, and mountains and mountains of data with little overall design or thought to how it all works or could better fit together.

I believe it’s time — a true imperative even — to do much better by completely reformulating the worker journey around the experience model, combined with our urgent needs post-pandemic, especially around wellbeing and resilience. Most of us will start at the core of their employee experiences and steadily go outward until we reach diminishing returns. Some will find that it’s better to start the edge and work their way inward. But change we must, because the status quo is near the breaking point in terms of ever-lengthening employee onboarding times, needless cognitive load on workers to manage growing complexity, stagnating worker productivity, and low employee engagement/satisfaction.

The Post-2020 Employee Experience Has No Silos, No Barriers, No Limits

As part of this, I’ve synthesized what I believe is a unified view of what the post-2020 digital employee experience stack looks like, given the pandemic, latest industry trends, and other factors I’ll explore soon. Given the scope of the entire employee experience today, there simply is a lot of necessary components to this view. It will take me several months to full explore it here and elsewhere.

There are number of key points in this model that are important to understand in order to appreciate why it addresses many key issues in employee experience better than previous models:

  • This model merges IT, HR, comms, and everyone else into a single view for the first time. There are no artificial boundaries, and the vision is integrated and unified. This means there are many elements in this view that are unfamiliar to people in each of these functions. That is just fine. We’re all going to have the learn all the moving parts to deliver significant and sustainable employee experience improvements. Note: The view above is the highest level one. I will be releasing the detailed view shortly.
  • If experience is at the core of employee experience, it should be the organizing principle. It should be represented as a recognizable capability on the IT side, and used by HR and everyone else to urgently produce the experiences we need that tap into our full capabilities as individuals and organizations. This is a very different view than in the past where we acquired individual digital tools, touchpoints, or suites, branded and configured them a bit, maybe added an integration or three, and threw them over the wall to workers. Invariably this just added one more thing to the grab bag of apps and systems they have to use. No more. A digital experience model that forms a consistent “center of gravity” for the worker and their daily activities is the most important focus in this model.
  • Automation, analytics, current and coming revolutions in digital experience, consumer-grade user interfaces, low/no-code and the emerging tech spectrum must regularly inform and improve the employee experience. The employee experience must evolve as fast the world, and it must therefore be represented in a cohesive but loosely-structured stack designed to change and keep up. Most organizations will spend the next five to 10 years getting this stack right for them, and they’ll never finish evolving it, nor should they. But it must be the primary focus, along with the worker journey itself.
  • The daily moments of the worker must be the unit of employee experience development and management. This makes it human centered and aimed at the most meaningful work activities. Re-organize disjointed work into singular job activities (sell a product, build a team, manage a project, get a promotion) that formerly spanned many to dozens of siloed apps and unify them into easily customized and personalized digital experience that are contextual, have built-in just-in-time training and can be created by anyone in the organization that needs to.

At its core, however, this is an attempt to put all the moving parts of digital employee experience together — perhaps for the first time in a truly comprehensive view — in what I believe is a new, useful, and compelling way that is centered around experiences while empathizing deeply with two vital audiences: Employees and the business, both.

As mentioned above, this is the beginning of a long exposition on experience-led employee journeys that I believe is becoming the next leading model for digital workplace and employee experience. Please join me here and elsewhere as I continue to explore it in detail, as well those organizations that are already starting to do it.

Note: No view of employee experience could be truly novel of course, as many in the industry have identified or created so many pieces of what I lay out here. We’re all building on the shoulders of giants. What’s different, I would suggest, is a truly holistic and inclusive approach that has the highest chance to be successful at addressing the largely accidental, disjointed, overly complex, and sprawling employee experience that most of us have built up over the years.

Please contact me if you have important contributions to make. Do consult the additional reading below for a fuller view of how all these pieces fit together into a much brighter and more effective employee experience that meets both the needs of workers, the business, and our times.

Additional Reading

How Work Will Evolve in a Digital Post-Pandemic Society

Revisiting How to Cultivate Connected Organizations in an Age of Coronavirus

My 2020 Predictions for the Future of Work

A Checklist for a Modern Core Digital Workplace and/or Intranet

Creating the Modern Digital Workplace and Employee Experience

The Challenging State of Employee Experience and Digital Workplace Today

Filed under Analysis, Digital Experience, Digital Workplace, The Enterprise, The Future of Work Tagged with , , , , , , ,

How Work Will Evolve in a Digital Post-Pandemic Society

April 15, 2020 1 Comment

The current outbreak of COVID-19 is stress testing our institutions, infrastructure, governments, and societies more than any event in most of our lifetimes. We have to go all the way back to the two World Wars to find similar precedents. Yet, as our businesses and personal lives are profoundly impacted, some of us can also perceive great forces of change in motion that offer us hope for positive and important new outcomes that we might influence.

The realization has also set in that we won’t likely be able to roll things back to how they recently were — at least any time soon — so we must now look at what is likely to be the next new normal, as it was famously known as during the 2007-2008 financial downturn (and which now sadly looks increasingly minor by comparison.)

In the last month and a half, I’ve been exploring how organizations must rapidly adapt themselves to the pandemic as most of our organizations now consist purely of digital workers connected over our global networks. As many of us in the digital workplace and employee experience community have noted of late, there are now major opportunities to follow-up on significant yet often slow or stalled transformations of human-centered work.

But first we must face our current situation and likely trajectory.

Profound Disruption of Work is Here

There’s just no avoiding it: The disruption we are facing today is as profound as it is pervasive. Yet I deeply believe it also offers an increasingly fertile and robust landscape into which we can drive meaningful and sustained change for good. Our timing must be careful and the thinking behind it — combined with effective action at scale — both crisp and clear, albeit real challenges in our fast-changing times.

There’s also no denying that how we’ve worked before is simply gone. Something much better than what we currently have must replace our current unwieldy situation for many of us: Weeks long slogs through endless video calls, tiring teleconferences at all hours, with our team chat windows scrolling mindlessly past our gaze. We can and must now create a much better design for our current working realities. Whether you will focus on remote work, more quarantine-friendly physical facilities, or a comprehensive rethink of the modern enterprise for being near 100% digital, we will have to go as deep as the core ideas that underpin work itself.

The Post Pandemic Organization for the Future of Work

We must also — to make it much easier to evolve going forward — start designing our workplaces and our work itself much more as a contemporary digital product in an ongoing and continuous exercise of collaboration and co-creation. I once asked in Designing the New Enterprise, “how do we adapt sustainably to constant change?” Now the question is also, “how do we adapt sustainably to large disruptive change?”

Answering these big questions will require profound and outside-the-box thinking. Our very foundations are in the midst straining. We now live in an era where even the traditional nation-state as well as the new global order both seem threatened. Answers to how we will thrive in a post-modern pandemic-stricken world seem stubbornly hard to find. Neither model seems sufficiently effective at providing adequately coordinated leadership or proactive response.

If we move down from the macro level of the global stage down to the size of our organizations (corporations, state/local governments, associations, non-profits, etc.) and other related but long-standing business structures like unions, partnerships, alliances, consortiums, and so on, we see that these too are now struggling to help their constituents in many cases.

The Ways Forward are Unfamiliar and Unknown, But Not For Long

Many better connected and easier to operate digital alternatives — at least in our currently locked down global state — do now exist, but seem either rather immature and/or unproven in comparison. These include global digital communities (yes, Facebook, and others), the larger and older open source groups/projects, and digital communities like LinkedIn and Github do seem to show that massively scaled communities can share information, powerful ideas, and help each other in compelling new ways, as many of us have long hoped. While there are plenty of downsides to these too, because the pandemic resistance of digital networks is outstanding, no other workable new modes exist.

We’re now entering a phase where we must begin to plan for post-pandemic. This does not mean going back to where we were. It cannot, because we now know the reality of the impact of a return of a new pandemic or a newly mutated coronavirus:

It’s simply irresponsible and unacceptable to go back to the entirely too fragile and so easily-disrupted operating models of the pre-COVID-19 world.

What does this suddenly urgent near-future of work look like you ask? No one has all the answers, but the good news is that we’re about to discover very quickly what is working and what isn’t in the vast global living laboratory of #suddenlyremote.

From my conversations the last few weeks with CIOs, my fellow futurists and thought leaders in the Future of Work, digital workplace leads, and employee experience groups (mostly in IT, but some in HR), there’s a recent but increasingly broad swing from the tactical, as in just getting everyone onboard with the basics of working remotely, to the strategic, where we look at where we must now go, both in-pandemic and post-pandemic, and quite possibly the next pandemic.

How Work Will Evolve

From this vantage point, which I am very fortunate to have in the industry, I can see a number of likely outcomes that will allow us to take a precarious economic reopening and flailing early growth and turn it into a stronger story of resilient resurgence, no matter what happens:

  • Designing for loss of control. By taking advantage of the tendency of systems and external agents to use an organization’s people, ideas, resources, systems, and data to do new and interesting things, organizations can deliberately create thousands of emergent outcomes at scale, many of which they have a stake in (see: platforms, ecosystems, etc.) The raw components are well known and understood for making this happen. Now it is an imperative to drive rapid recovery and growth.
  • A strong preference for tools with exponential potential and leverage. The pandemic catches us at a time of exponential change, and is further driving it. We simply can’t fight exponential change with yesterday’s linear tools. Organizations now need access to near-instant response to large events at scale. This is only possible with capabilities that can respond in kind. This means everything from mass decentralized automation and AI enablement to using digital communities and social networks as our primary organizational structures.
  • The rise of fully open and agile new operating models. The biggest question is whether our traditional institutions lead the world out of the pandemic, or will citizens around the globe come together and opt instead for something different using our global networks? We’ve seen the inexorable shift in agile methods in recent years, which came from key insights and experiences in the technology world, and which I’ve long noted has begun to infiltrate the broader world of business itself. The envelope of agile has expanded to something we now call DevOps, and that envelope will continue to expand and merge with mass digital collaboration models that now existing within the realms online forums, enterprise social networks, and team chat channels: Communities of practice, communities of interest, and now, communities of business, a notion I’ll expand on soon as I am currently collecting growing evidence for them.
  • Self-organization, self-service, and pull-based models for reorganization, restructuring, rebuilding, reviving, and thriving. The single most powerful model for work is humans collaborating together in open, transparent, and self-organizing processes. As I’ve often strongly encouraged businesses and people: Let the network do the work. There is no time in modern history where this concept is more important. It’s how we’ll each have enough access to resources, skills, ideas, and capabilities to do almost anything that needs to ne done. We’re already seeing things like this happen such as the formation of the Open COVID Pledge to mobilize invaluable IP quickly to respond to the pandemic in any and all ways necessary. The list of now free, but previously commercial, services available to help individuals and businesses is impressive as is the list of initiatives to help businesses most impacted. Again, all these resources have digital communities or capabilities at their core.

I also predict that our digital communities of citizens, workers, and organizations will be the single most influential and important resources that we have in surmounting the challenges of the current pandemic. It’s an easy prediction, because that’s largely all that government, society, organizations, and our institutions are at this moment. While there are badly needed and greatly appreciated people out there in the real world still growing our food, staffing our hospitals, and keeping the peace, these still represent only a tiny fraction of the total sum of our global cognitive power, operating capacity, and economic capability. The rest, for better or worse, has just gone almost completely digital.

We absolutely require the best ways of operating in this new reality. My point is that we largely have them, but the hard work remains to adopt, adapt, and succeed with them. It will be one of the most profoundly positive changes in human history, unleashing untold autonomy, human diversity, bold new ideas, dramatically transformative action, as well as human freedom and potential. Or not. The choice is ours to make, right now.

Additional Reading

When Our Organizations Became Networks

The Challenging State of Employee Experience and Digital Workplace Today

Revisiting How to Cultivate Connected Organizations in an Age of Coronavirus

My 2020 predictions for the Future of Work

My recent video interview with Bjoern Negelmann about these topics for Digital Work Disruption

Filed under Analysis, Digital Transformation, Digital Workplace, The Enterprise, The Future of Work Tagged with , , , , , , , , , ,

Revisiting How to Cultivate Connected Organizations in an Age of Coronavirus

March 19, 2020 1 Comment

Looking back at it from the vantage point of the current coronavirus pandemic, it’s clear now that most organizations missed a golden opportunity about five to seven years ago. This was the height of industry discussion around and worldwide business implementation of enterprise social networks, a leading form of internal online community.

Known in shorthand as the ‘ESN’, this emerging class of communication and mass engagement platform was inspired by the runaway growth and success of the global social media revolution. The ESN focused on creating a living, breathing organization-wide digital fabric of open connections, conversations, knowledge sharing, and meaningful collaboration that was as egalitarian as it was eminently useful.

Optimism was rife back then and progress seemed tantalizingly close in resolving the many issues with the aging model of corporate organizational hierarchies. There’s no doubt about it: The vision for the enterprise social network was as utopian as it was grand. I know, because I can count myself as one of the leading proponents of people-connected technologies back in that age. I even wrote a popular book on the subject, when the management and design theory behind it was known as social business.

But the ESN revolution was also grounded in using technology to go well beyond the limiting constraints of the real world when it comes to distance, time, experience, or access to leaders or subject matter experts. The ESN flourished in many organizations, and they still do, though I notice a distinctly more subdued tone today when I talk to ESN owners, practitioners, and the specialized staff that help them run well, community managers.

Back in those days, we eventually accumulated enough experience to know what worked and what didn’t: It was easy to roll out the tools and hard to shift the culture and skills, but as an industry, we largely learned how to make them successful. For those that wanted it, a virtual organization of vibrant digital connections formed a network across the company that became a central conduit for learning, knowledge capture/management, operations at scale, vital peer-based support, and so much more.

Creating a Connected Organization with Enterprise Social Networks and Online Community

However, the ESN was different enough that it required strong stakeholders and passionate evangelists who would rarely leave its side or tire. Since the heady early days, I’ve noticed that ESNs tend to come and go if their sponsors and/or champions move on. That’s not to say there haven’t been and don’t continue to be many success stories. There are.

The Need for Resilient Digital Communities Has Come Roaring Back

Enter the coronavirus. The dasher of hope and changer of worlds in so many ways. There have been few times in history where the workplace has been so thoroughly disrupted as it has been today by COVID-19. The workforces of virtually every organization globally is either on a mandatory work at home policy or soon will be. My analysis of what to do in the early days of being suddenly remote is easily one of the most popular things I’ve written in recent years.

To say most organizations are not ready to become “suddenly remote”, as the phrase of art has become, is an understatement. In short, organizations around the world have essentially been physically disbanded until further notice. This is an incalculable shift. Our Internet connections are now our main lifeline by far to our work lives, to our colleagues, and to our careers. It’s as isolating for many, as it is freeing for others.

As it turns out, remote work is also a profoundly different way of functioning in our jobs that is inherently less social (unless we substantially augment it to be otherwise), more siloed, and disconnected than most of us are prepared for. Especially when we have to work remotely all the time, for days, weeks, or months on end, which is the reality at this time.

The Return of the Enterprise Social Network

In the current period of prolonged dislocation from our old work lives, wouldn’t it be incredibly useful if we already had a robust digital support structure in place? One that we’ve long since carefully crafted and built up from the connections of people that we’ve met either physically or virtually. While we actually have that in the form of our consumer social networks (or at least many of us do), it’s almost completely out of context for our workplace needs.

It’s a shortcoming of our own making. Our attempts to train workers to be digitally savvy has had long and sustained gaps because we’ve been able to lean on our legacy physical skills and environments. In the past, I’ve attempted to describe the necessary digital skills to help workers adapt to this new work more gradually. They are all predicated on building modern social capital, meaning have a broad, diverse, and strong network of connections to people in today’s modern operating environment: The global digital networks that infuse everything today.

Yet in the context of our work at least, most of us are now completely lacking this social capital, these connections, or a virtual community around us, just when we need it most.

Instead, for those organizations that didn’t make the determined and sustained efforts to do the hard work of creating an enterprise social network (or equivalent), the workers who have been tossed overnight into entirely remote working situations are finding it hard going. Their familiar communal work environment is gone. Their outdated tools don’t keep them plugged into the pulse of the organization.

In fact, most workers badly need the resilient and vibrant connective tissue of an ESN, with all its rich user profiles, relationships between far flung connections, countless groups of local experts, reams of searchable open knowledge, and the deep insight that all these can provide to step in for the shockingly rapid loss of our physical world of work.

ESN/Community Practitioners and Executive Leaders: It’s Time to Seize the Day

To practitioners, I’ve started making it clear that this is a (hopefully) once-in-a-lifetime and historic opportunity to make your enterprise social network save the day when it comes to grounding and delivering a healthy remote organization. An effective ESN can connecting the organization back to itself far better than older tools by focusing on returning and then improving both the cultural “dial tone” and daily bustle of the organization. The practical benefits are significant: Actual outcome-based business impact by improving operations, productivity, and employee engagement. So this is your time to shine, whether you now need to develop an ESN and the communities within it, or supercharge the one that you have.

For business leaders, now is the time to put your organization on a modern digital platform that is far more resilient to disruption and that will both modernize it and make it much more effective. I encourage you to look at the baseline results you’re likely to get, which was published in the MIT Sloan Management Review. Worst case is that you’ll achieve about a 25% productivity increase for your investment, which is fairly modest compared to CRM or ERP systems. You will however be required to invest in more staff than is typical for a traditional IT solution (the why and how many is here, but it’s not large compared to major productivity losses for remote workers without a strong supporting network.) Don’t wait. Support the ESN and online community champions trying to help you.

For both, this is the time to learn that advanced preparedness for going all digital is critical. We live in exponential times of change, and this also seems to mean large and more frequent disruptions. Those with the healthiest, best connected, and engaged digital networks of workers will experience the least disarray and breakdown when major events like coronavirus take place. Let’s learn from not making the most of these powerful tools the first time around. It’s now time to fully commit to building the best possible connected organization for next time around.

Final Note: Before you ask me about why ESNs and not team chat apps like Slack or Microsoft Teams, it’s because the ESN scales conversations and engagement up to the size of the enterprise. Almost all orgs are already using Slack and Teams, and it gives them a much narrower and far more limited view of what’s happening. In an ESN, all contributions are visible by default across the whole organization, content types are more sophisticated, and as you can see below in additional reading, they can be used for advance change processes like enterprise-wide digital transformation. ESNs are strategic. Team chat is useful, but tactical.

Additional Reading

Using Online Community for Digital Transformation

More Evidence Online Community is Central to the Future of Work

My Future of Work Trends for 2020 (with Video)

Filed under Analysis, Digital Workplace, Social Business, Social Collaboration, Strategy Tagged with , , , , , ,

Four Strategic Frameworks for Digital Transformation

October 18, 2018 2 Comments

Collectively, the world of business and IT just isn’t learning about effective ways to digitally transform nearly as quickly as it could be or should be. However, as we reflect on previous efforts, we can begin to see why this is: Lack of good storytelling, inadequate structuring for speed and agility, poor sharing of effective best practices harvested from hard-won industry experiences, or having these lessons collected together into understandable and applicable frameworks that reflect the realities of how hard large scale digital change really is.

We almost universally know now we must adapt to the digital future, to change and grow. But how best to do it remains the top question.

We’ve also learned along the way there are numerous submerged obstacles to digital transformation that won’t be denied and must be overcome before we can really even get started. Sometimes, as they say, we must first go slow to go fast later.

Stubborn and long-standing issues related to technology like technical debt or poor master data posture, to name just two, threaten to derail efforts before they even start. Issues related to the nature of people take up the rest, and can sometimes seem intractable.

Four Frameworks to Describe and Drive Digital Transformation

Consequently, in my work advising and/or leading digital transformation efforts, I’ve developed and refined four key frameworks built out of years of repeated use and validation in organizations around the world. These reflect many of the central issues that I believe we’ve learned that we must address and then codified them into a plan that most organizations can execute against. The motivation: I’m asked for what frameworks to use for digital transformation more and more frequently these days. So I thought it would be useful to share them along with some key insights in how they were captured.

An Adaptable Framework for Digital Transformation by Dion Hinchcliffe

The Adaptable Digital Transformation Framework. This originally came from my exploration of the organizational culture issues and long-term journey with digital transformation. It’s also one of my oldest and most seasoned frameworks.

This framework reflects at its core an ongoing cycle of (hopefully, self) disruption, refinement, growth, and renewal, backed by key pillars including culture change, leadership, goals/roadmap, business redesign, communications, education, and skill building. It also makes the key point that emergent innovation is perhaps one of the biggest outcomes, enabled by the key digital era technique of designing for loss of control, such as critical strategy of turning your business into an open platform that others can build on at scale.

A Digital Transformation Initiation Framework. I used to get asked more often than now about how to get started with digital transformation than I do today (as the majority of organizations have already begun in some way.) This framework focuses mostly on the first 100 days of an organization-wide effort and reflects the key activities that must occur.

If there is something I’d tweak about this now it’s the “honesty assess” task in the first column. I’d underscore it far more. That’s because most organizations aren’t going far enough in the deeply reflective examination and soul-searching they must conduct early-on at every level to understand what they’re really facing when it comes to digital change and adaptation. This step must be particularly emphasized in the framework or organizations will struggle to even start the journey. Technical debt and master data barriers are just the start on the technology side. Culture, inclination, skill, and talent are bigger issues and are softer human ones that are very challenging to resolve. For many organizations, these obstacles will take far more than 100 days to overcome.

Other than that emphasis, I’m pleased with the current state of this framework, even if too many organizations don’t take the cultivating and full-scale activation of change agents nearly to the level they should.

Modern Digital Leadership Unleashed by Network Effects: Digital Transformation

A Leadership Framework for Digital Transformation. More of a process flow view than a prescriptive view on how leadership should go about digital transformation, this framework is useful for showing how critical it is for executives and digital change leaders are responsible for defining a new business future state, rich in new products and services in the realm of customer experience and digital platform. The major change I’d make today is that recent data now shows that the CEO is now the leader most often involved in driving forward enterprise-wide digital transformation, and I’d position it so in this picture.

The Digital Transformation Target Model: Customer Experience, Employee Experience, and Supplier Experience

The Digital Transformation Target Model. Less of a framework and more of a description of the transformation journey from silos of function (marketing, sales, delivery, operations, customer service, R&D/innovation) to the three main experiences that must result from a successful digital transformation. Right now, customer experience is the focus, with employee experience a distant second, but supplier experience is finally bringing up the rear and becoming a genuine conversation. I’d not make many changes to this view based on recent lessons learned, and organizations should take this view deeply to heart in their efforts in digitization.

Frameworks: A Living Artifact of Digital Transformation Knowledge

One unfortunate fact is that organizations often developed or adapt their frameworks from the material they encounter, such as the ones above. But they fail to make it a living artifact that captures lessons learned and teach those that must join in and continue the journey.

Thus, if there is a lesson learned above all, is that as digital transformation becomes a long-term journey that organizations will remain on as long as they exist, they must do a much better job in capturing, codifying, and spreading the learning of what works and what doesn’t, as it changes and evolves through time. In fact, learning is ultimately the primary activity of digital transformation, so any successful effort will tend to emphasize it and capture it in their own frameworks.

Additional Reading

The Digital Power Values for The New C-Suite: The Modern Mindset of the CEO, CIO, CMO, CDO, CCO

Why IT Leaders Struggle with Digital Transformation

The Leadership Challenges of Digital Transformation | The Conference Board

Filed under Analysis, Digital Transformation, Strategy, The Enterprise

Why Microservices Will Become a Core Business Strategy for Most Organizations

September 7, 2018 1 Comment

As an industry, we have collectively returned to that eternal debate about what constitutes a largely technical evolution versus when an important digital idea becomes a full-blown business trend. This has happened before with Web sites, e-commerce, mobile applications, social media, and other well-known advances. It can be hard to remember that at first these were looked at as mostly technology sideshows. Yet they all went on to become serious must-have capabilities on the business side.

Microservices is now a current topic of this debate, as the overall approach is perhaps the most strategic technology trend that’s come along in quite some time. First, a brief definition: Microservices provide a well organized digital structuring of our business capabilities that are exposed to stakeholders who need what our organizations can do, and are usually accessed via open APIs. The concept is now poised to — sooner or later — become the primary digital collaboration fabric with all our enterprise data, IT systems, 3rd party developers, business parters, suppliers, and other stakeholders.

So, you read it here first: Microservices are how most organizations will eventually conduct the majority of their business, internally and externally.

Yet there is still considerable debate and confusion about whether microservices are merely just slightly more elegant network plumbing of our digital systems, of if they actually represent the primary conduit for operating our organizations. I fall in the latter camp, as this platform way of thinking in general has steadily emerged as the leading model for composing and integrating networks of systems and organizations. Don’t get me wrong: We had SOA, Web services, and APIs before — where I once posited that this would turn into a global service phenomenon, which it has — but these each had key details missing or not quite right. At this time, microservices does appear to be the best model we have, honed and culled from over a decade of thousands of organizations experimenting with various approaches.

I am now also clearly seeing from many of my CIO and IT contacts that developing a microservices strategy is rapidly becoming a key priority this year. Not sure that this is broadly the case? Just take a look at the recent JAX Enterprise IT priorities survey, which shows that microservices are currently the 3rd leading IT priority, nearly eclipsing the big trend on the block, cloud computing, one of the other hottest IT topics of recent years.

Yet microservices are often conflated with concepts like APIs, for which there is indeed a considerably close relationship, and so can often be relegated to the ‘we’ve been here already’ bin.

Why the sudden popularity and interest in what appears to simply be a more refined technique to easily integrate and communicate between digital systems? For almost all the same reasons that the Business of APIs and the API Economy had their days in the sun: Microservices take so many of the lessons learned in creating more composable, reusable, and platform-centric version of our digital organizations, strips them down to their very basics in terms of design and consumption, and then places them at the very center of how our organizations operate. (Note: Not everyone would agree at the strategic level that microservices should be designed and offered at the business domain or architecture level but many, including myself, do.)

Naturally, the question is why would we do this, and why would it be just about the most important thing we could do to enable a host of vital business activities and outcomes? Put simply, microservices hold the promise of truly unleashing the greatly underutilized assets of our organizations, both strategic and tactical. These assets include everything from data to talent to innovation, and up until now, we’ve been doing it piecemeal and without a real enterprise-wide design (though I’m cautious about overly top-down efforts here as well.)

Microservices: Building Blocks of the Modern Digital Value Chain

Microservices, by virtue of offering a well-structured way to engage and integrate with the world at large in scalable, digital terms, now appear to hold the answer to enabling faster digital transformation, lowering our levels of of tight coupling and technical debt, and substantially increasing much needed levels of IT integration. More centrally to business impact and growth, they also make it possible for us to build and cultivate bigger and more robust digital ecosystems with our stakeholders. This includes 3rd party developers and business partners to our very own workers and customers.

For me, I first saw the writing on the wall several years ago when I was helping develop the API strategy for the CIO of one of the largest organizations in the world. We had just completed an all-day workshop studying the benefits of opening up systems and data more simply and easily to make them as consumable as possible. I stressed these key points: 1) Open APIs make it far easier to create and innovate on top of existing IT and data, 2) they make it easy to create additional value many times over through nearly effortless integration between systems, 3) they achieve this asynchronously and highly cost effectively by systematically designing a high leverage and productized point of global interaction upfront, instead of hundreds of expensive point-to-point integrations over time. Upon reviewing this, the CIO suddenly sat back, the light clearly having come on, and said, “I get it now. The logical conclusion of all of this is that we need to provide a URI for every piece of data in our organization.” He was exactly right.

Put simply, this means that every element of enterprise data would have a unique link to it through a well-defined interface, which anyone can easily find and use to (yes, securely) access it and update it if appropriate. As I’m fond of saying, civilization advances when formerly difficult things become easier. This is exactly the vision behind microservices: Build and provide an incredibly simple and straightforward way of exposing our businesses in a highly useful and constructive manner so that the effort to connect systems into value chains becomes essentially near zero in practical terms.

Mindset: What Would Happen If Anyone Could Build Anything On Your Business?

The question I then put to those still trying to understand all this is the following: If we could access all our enterprise data simply and easily and could then integrate systems together with just a few lines of code, what could we do this with power? Virtually anything we can dream of, with almost no economic, technical, organization, or political barriers to achieving whatever we — or, and this is the big key, others — could dream of doing with our systems and data.

Because once strategic microservices that enable this are operational, then anything is possible. That’s because virtually all of our enterprise data can be reached, it can be harnessed, analyzed, and it can flow through to wherever it needs to be to extend and empower the stakeholder/customer experience. In fact, it’s the most potent way we know of yet to create and capture shared value and to do this so efficiently that literally orders of magnitude more high value integrations, connections, and innovations will take place (see: How Amazon Web Services makes most of Amazon’s profit.)

So why hasn’t this happened except in organizations at the very leading edge of the digital maturity curve? Because it takes 1) an understanding of the vital — even existential — importance of doing so in order to rapidly gather around a vibrant ecosystems of app creators, integrators, partners, suppliers, customers, and stakeholders and 2) the pre-emptive removal of the aforementioned economical, technical, organizational, and political barriers to doing so. In short, creating microservices, though they themselves are profoundly elemental network-accessible business capabilities to our organizations, takes real work, much of it consisting of softer, non-technical obstacles in the realm of culture, mindset, inclination, and leadership.

We already see examples of this happening at the enterprise vendor level. A particularly compelling example of a global set of microservices that expose much of what an organization does is Microsoft Graph, along with their microservices-friendly Service Fabric. While some will quibble with whether MS Graph is a set of microservices in the pure sense, the point is this: Much of what Microsoft offers its customers via its products is accessible within a well-organized enterprise-class set of data services. This is strategic to the point that Sayta Nadella has even called Microsoft Graph their “most important bet”, for all the previously cited reasons.

Microservices are also well established at some of the leading organizations in the world, including Amazon, Netflix, Uber, and a good many others. Less clear is traditional enterprise adoption at the strategic level, though my personal anecdotal evidence is that this is now very much underway in a growing number of organizations. Another proof point of expected growth is that business consulting firms like Deloitte are seriously talking about microservices as enablers for open banking and other industry transformations.

Microservices and Business: The Future

However, in today’s extremely fast-moving world, coming to the conclusion through a largely accidental and piecemeal route that microservices are the future will simply take too long from a competitive standpoint. This will result in a very much less than optimal set of services for your stakeholders. Thus, my advice on microservices in the enterprise is currently this:

  1. Most organizations should now begin a concerted effort to create an enterprise-wide set of microservices. And do it as a part of an overarching business strategy.
  2. This effort should be decentralized but a centrally coordinated effort. To be used to identify and design needed microservices.
  3. A commitment must be made to be in the business of integration and dynamic digital value chain building. Half measures have long-doomed efforts at SOA, APIs, developer networks, etc.
  4. Use design thinking to understand the needs of microservices consumers, then meet them. Understanding what the needs are, and being deeply empathetic to key issues like ease-of-use, performance, and the right to build a 3rd party business on them is key.
  5. Operate your microservices like your core business. Because they soon will be. Invest in them, advertise them, evangelize them, encourage usage, support them, and generate revenue with them.

A growing number of organizations I work with, including most recently one of the largest federal government agencies in the U.S., are now fully cognizant that most of their business will soon be conducted through digital channels. That aforementioned agency is already doing over a quarter of its business through APIs, and expects it will be over half in the next few years. They believe moving from data-based APIs to business-oriented microservices is their next task to go to the next level. So should it be for most organizations.

For the enterprise, achieving success with microservices is certainly possible through a patchwork of department APIs that are designed and operated without an overall business strategy, design, or structure. Or we can adopt a holistic microservices approach to create a more uniform, rational, consistent, and contextual set of open digital capabilities that also forms the basis of business strategy and architecture for the organization. The story is unfolding rapidly, and as I mentioned, I’m seeing an all-time high interest in microservices at the most strategic IT levels. Now that story must be told, understood, and realized on the business leadership side as well.

Update on September 20th: A few commenters have noted that they don’t think that most organizations believe microservices and APIs are actually viewed as business strategy, much less core to it. However, supporting many of the assertions I make above, I recently encountered a recent study from Cloud Elements. Their 2018 integration survey (which included 400+ companies, 27 industries with 26 outside of tech including finance, communications, engineering, and transportation on 6 continents) reported that 61% found APIs to be critical to their business strategy, and 85% fundamental:

APIs (open access to microservices) is Essential to Business Strategy

Additional Reading

My current Astrochart for the New C-Suite: Microservices figures prominently as a key C-level technology and business strategy

A Discussion of the Past and Future of Web APIs with Dion Hinchcliffe | InfoQ

How can businesses keep up with tech change today? | ZDNet

Filed under Analysis, Digital Transformation, Enterprise Architecture, Strategy, The Enterprise, Trends and Statistics

Digital Transformation in 2018: Sustainably Delivering on the Promise at Scale

January 5, 2018 2 Comments

In 2017, we witnessed organizations take up the mantle of digital transformation with more conviction and effort than any time before. Funding, commitment, and leadership support was at its highest level ever and only showed signs of increased dedication. Ongoing success stories from many leading organizations showed that large scale technological and business transition was also possible for the typical company, not just industry leaders. Perhaps most vitally, the imperative itself became even clearer to leaders as disruption began to penetrate even into long resistant industries like healthcare, finance, and even insurance.

Yet it was also evident that last year was another major learning year, because through our efforts many of us gained an even fuller appreciation of the sheer size and scope of the required journey ahead of us. Combined this with the steady proliferation of new and important technologies last year and we gained both fresh urgency and a better understanding of the true challenges facing us. In 2017, the Internet of Things and artificial intelligence were felt particularly profoundly on the transformation agenda in the industry, along with data science, analytics, and other forms of capitalizing on the vast and invaluable streams of new information that better digitized businesses generate. 2018 will see the same, but with much more focus on reaching the market effectively and seizing network effect, and less on experimentation.

Of all the many lessons learned on digital transformation last year, perhaps the most important was that the complexity and pervasiveness of the necessary changes — organizational, cultural, and especially mindset — as well as the new technologies themselves require powerful new tools and techniques that simply didn’t exist a couple of years ago.

The Two Dimensions of Digital Transformation in 2018: Upside and Oversight for Opportunity, Governance, and Risk Management

The Twin Digital Transformation Lessons of 2017

Two of these new tools and techniques — culled from the hard won experience of the early movers in digital transformation — are particularly worthy of calling out.

The first was a result of the realization that a single, overly centralized change entity like the IT department, the digital line of business (usually led by the chief digital officer), or tech incubator was not sufficient in realizing the profound rethinking and realization of the entire organization in more digital terms. In fact, these entities might not even be that helpful in that they are overly focused on technology and may not have the requisite experience in applying to the redesign and transformation of the business itself. Instead, more decentralized yet highly engaged entities like empowered groups of change agents or networks of transformation teams seem to be more effective are driving long-term change both deeply and widely across the organization. This evidence is backed up by careful research last year by Professor Gerald Kane and his colleagues that digitally mature companies are more likely to have impactful enterprise-wide transformation efforts.

The second insight was that the raw building blocks for digital transformation that existed were simply too primitive, not situated for business use, too little informed by the vital patterns and practices now known to be necessary, and not designed to rapidly incorporate new technology and additional lessons learned as they emerged. In the past, we would have said we needed frameworks for digital transformation, and while those emerged as well, what we really needed was much more operational constructs that had these vital ingredients: A relatively complete cloud tech stack, workable blueprints for specific industries, architectures designed for high leverage that support rapid change, and business solutions crafted to a 40-60% level of completeness and waiting for the details of your business to fill in the rest. While Amazon Web Services, Microsoft Azure, and Google Cloud provided some of these building blocks, they simply weren’t complete on their own. Organizations such as SAP (with its Leonardo offering), Accenture, and others have thus created what I’ve called digital transformation target platforms, which are more mature, complete, and business-focused transformation vehicles and operational capabilities. Note: For more details, you can find a fuller explanation and list of such enabling target platforms on my recent shortlist.

Combined, these two lessons learned — which are equally balanced between the people equation and the technology challenges — are vital in my analysis to successfully tackle the digital change obstacles and opportunities at sufficient speed and scale. That’s because there are very significant competitive implications — that would be irrelevance and/or outright disruption — to moving too slowly or tackling digital change too narrowly and in silos.

The good news in my experience over the last year: More and more organizations are now indeed staring to find these onramps to the superhighway of much more rapid and effective digital transformation. Enough now so that it’s led to a second major — and steadily growing — issue that must itself now be managed as a top priority new purview. This quickly accumulating new tech and business portfolio which comes from achieving a higher change velocity must be well-managed and governed. We simply must keep our new digital businesses secure in an age of Meltdown and Spectre as well as complying with GDPR and all the other rapidly emerging digital regulations that threaten to impede our efforts.

The Two Dimensions of Digital Transformation in 2018

As we’ve emerged from the very early days of digitization, there is now a clearer sense of how to tie emerging technologies to specific outcomes. A generic example of such a map is shown above, depicting how technologies can combine and reinforce key desired outcomes ranging from data-driven management of the business and better employee engagement to satisfied customers and higher growth and revenue, while also optimizing the results, governing it all, and keeping everything running safely and securely. These outcomes can be broken down today into two different key dimensions.

The first dimension of digital transformation outcomes, what I call the upside objectives, is what most organizations have been mostly focused on until now, as they try to get out of the gate to create initial wins. You can see from the accompanying visual above, that technology does indeed define the art-of-the-possible when it comes to disruptive new products and services (blue circles, center.) While lightweight IT integration, cloud, analytics, architectures of participation, and smart mobility have been technology approaches we’ve had for a while, the modern focus on digital transformation tends to be today on building and wielding customer-facing experiences infused with digital business models, interconnected ecosystems, services built on top of the Internet of Things, and with many flavors of artificial intelligence to make it personal and differentiated. Even the digital workplace is seeing fairly comprehensive overhauls in many organizations precisely to provide the tools and environment for workers en masse to be more effective at transforming their part of the organization. As a result, low code tools, citizen developer, personalized digital workplaces, hackathons, and other ways of spreading out the hands-on transformation process to the edges of the organization to move more quickly are a focus here.

The second dimension of digital transformation outcomes, let’s call it oversight objectives, is a newer one that hasn’t had nearly as much focus so far but is about to become very important as organizations digitally innovate faster and create far more complex ecosystems and stakeholder-facing experiences. Otherwise known as operations, governance, performance optimization, risk management, and cybersecurity, these oversight capabilities must get better and scale just as much as the upside portion of the portfolio. To ensure these capabilities are funded and resourced just as well as the other side of the digital transformation coin is going to be one of the next big challenges.

The reality is that most legacy organizations are not structured or funded for delivering on continuous change as the norm, to do it sustainably, or at the scale required today. While we’re seeing next-generation organization models that will help, we’re all still learning a great deal about how to design the contemporary digital organization. That we simply have to figure it out is the reality for most of us, but the good news going into 2018 is that we have some promising avenues to explore for more successful results.

Additional Reading

In Digital Transformation, The Art-of-the-Possible and Average Practice Are Diverging

Digital Transformation and the Leadership Quandary

What’s really holding back today’s CIO from digital transformation?

Filed under Analysis, Digital Transformation, Strategy, The Enterprise Tagged with , ,

Dreamforce 17: Live Blogging the Benioff Keynote #df17

November 6, 2017 Leave a comment

I’m sitting here in the vast keynote chamber within Moscone Center in San Francisco again this year for Salesforce’s annual confab. Long since an obligatory pilgrimage for those in enterprise SaaS and cloud computing, Dreamforce remains the single largest business technology event in North America, and some say the largest software event in the world of any kind.

Dreamforce has once again taken over downtown San Francisco almost completely. The crowds are larger than ever and security is even tighter than last year, which was tight. With over 170,000 people here, the police presence is palpable this week, with some armed with what looks like automatic weapons. But the crowds seem more reassured than nervous about this, and frankly it’s a minor but notable shift in what has been an annual Kumbaya-style event that proactively celebrates diversity, equality, and social good just as much as the latest new technologies and products.

The Salesforce Economy Growth Projections Increase

The latest Salesforce econoy number are in as well. IDC estimates that Salesforce will 3.3 million jobs and contribute approxtimately $859 billion in new business revenue (yes, nearly a trillion dollars) by 2022:

The Salesforce Economy by 2022 (2017 Estimate by IDC)

A New Google/Salesforce Partnership for the Cloud

Salesforce has released a slew of announcements, especially around industry partnerships. The most significant is that Salesforce will integrate Google’s G Suite with multiple products and use Google Cloud Platform for international growth. The announcement is favorable for Quip, which will tie into Gmail, Hangouts and Google Calendar. Quip’s Live Apps will become embedded with Google Drive and Google Calendar with full Hangout integration. Data is shared as well with customer account details and information which can be used from Sales Cloud directly. More details on the Salesforce/Google partnership from Larry Dignan on ZDNet. Mostly, the announcement seems designed to head off Microsoft’s growing dominance in office productivity with Office 365, though there are some interesting analytics news as well.

The Salesforce Google Quip Partnership in 2017 #df17

The keynote will begin at 3pm PT and I’ll be live blogging is right here.

2:54pm PT: Will.i.am is doing a preshow on conversational interfaces.

3:07pm PT: Still getting in Ohana spirit as the usual Hawaiian commencement of Dreamforce begins…

Ohana Ceremony at Dreamforce 2017

3:09pm PT: Opening video roles. “The next wave is building. Digital and physical worlds are blurring. We’re in the 4th Industrial Revolution (also known as Industry 4.0). Revolutions never change the world gently. That innovations may only help a lucky few. We see another way. At Salesforce we live values of trust, growth, integrity, and equality of every individual in the world. The world is going to be changed by Trailblazers.”

3:11pm PT: “Welcome to Dreamforce. Let’s blaze a trail together.” Voice over now introduces Marc Benioff who comes out onto stage.

3:12pm PT: “The biggest job I have here today is to say thank you to our customers” say Benioff. “We are deeply grateful for all that you do for us.”

3:14pm PT: Now Benioff is talking about the 4th Industrial Revolution, which is apparently the theme for this year’s keynote. “I see it happening all around me. Incredible new tech like 3D printers, CRISPR, autonomous vehicles, and generation manufacturing.”

Marc Benioff Keynoting Dreamforce 2017

3:18pm PT: Now Benioff talking about luxury brand companies are becoming “so deeply connected to our customers. Coca-Cola is another great story. They have these incredible coolers. The next-generation of these coolers has a camera.” They can tell when the cooler needs to be replenished. “They are going through incredible transformation using this new technology. “Everywhere I go, I see this transformation. I recently stayed at Marriott. I’m a member of their loyalty program. But loyalty is dead. Now we’re on journey. Customer journeys, transformation journeys. They can even give me my key on my phone now.”

3:20pm PT: “That’s what all of us are doing, trying to connect better with our customers.” Now cites Ducati’s new connected motorcycles (see their CIO Piergiorgio Grossi’s vision for IT here at Dreamforce, a inductee to the Business Transformation 150 that Ray Wang and I selected this year.) as a new type of next-generation product. “Are these technologies united us or dividing us? Are we more connected or somehow less connected.”

3:23pm PT: “We have 2,700 sessions over the next few days” says Benioff.

3:25pm PT: Benioff continues to go over the major guests at Dreamforce including Michelle Obama, Ashton Kutcher, Kasper Rorsted, CEO of Adidas, and Ginni Rometti, CEO of IBM. Here’s the full list of major speakers at Dreamforce this year.

3:28pm PT: “Over 3,000 companies have adopted the Salesforce 1:1:1 model. And will do more than $12.5B in revenue next year. Thank you for what you have created. Business is the greatest platform for change.”

Salesforce Economy 1:1:1 at Dreamforce 2017 #df17

3:31pm PT: “It’s about the equality of every human being. When we see discrimination happening anywhere in the world, Trailblazers came forward and help change it. We’re committed to diversity and equality. We have to look at our boards of directors, management, and employees.”

3:32pm PT: “We are the largest net zero cloud company in the world. This is happening through all of you Trailblazers. We are the Number 1 CRM in the cloud. #1 in service and marketing. The fastest software company ever to grow to $12.5B in revenue. How did this happen? Because of you.”

3:34pm PT: “It’s amazing what you do with our platform every day. You’ve created that. And you’ve created this, the Salesforce economy. $859B in GDP impact by 2022, $1B in social impact, and 3.3 million jobs. Building communities, sales, collaboration, and industries. Trailhead is this tremendous educational environment. Einstein with artificial intelligence, Lightning, an incredible productivity environment for creating apps. Analytics in everything, and AppExchange with thousands of apps. So thank you for that. For inspiring us to build this.”

3:37pm PT: Now rolling video of Salesforce MVP Stephanie Herrara, on the power of Traiblazers. Now Benioff is up on stage with Stephanie, talking about her Salesforce Saturdays.

Marc Benioff with MVP Stephanie_Herrera at Dreamforce 2017 #df17

3:41pm PT: “Our platform gets bigger and stronger every day.” “Now I want to take a moment to talk about something new that you’re doing to see at Dreamforce this year. Our development teams have been working on creating tremendous next-generation capabilities. If you’ve been over to Moscone West to see that first floor on Trailhead. You’ve embraced Trailhead. It’s an amazing community in so many ways. 4 million badges have been issued so far.”

3:43pm PT: Benioff is now unveiling myTrailhead, “exactly for you. It’s Trailhead with your brand and your content. To make Trailhead exactly for you. This is your Trailhead. It’s the learning cloud, it’s the enablement cloud, and community cloud all in one. With myTrailbead, you can create Trailhead for your company. You don’t have to be a coder or programmer. You can create with clicks, not code.” This is one of the reasons I put Salesforce on my low code platforms ShortList recently.

3:46pm PT: You can deliver your own mobile apps without code. One last thing Trailblazers want to do, it to take all those things (coolers, motorcycles, and other physical objects) that they’re doing is to plug it into the Salesforce Customer Success Platform with (the just-announced) MyIoT. We want this as one single integrated CRM platform, that we can integrate declaratively without code. This is the more personalized and integrated Salesforce that you’ve always wanted. We want to show you in this keynote what this platforms looks like.”

3:54pm PT: Now Salesforce co-founder Parker Harris is up on stage talking about Salesforce and Heroku, claiming that they are the world’s largest platform-as-a-service (by what criteria I wonder, as AWS is certainly the largest overall.) “Employees can created ‘trailmixes‘ (which are described as ‘custom learning paths you create from your favorite trails, modules, projects, and superbadges’) and create their own education and playbooks.”

3:56pm PT: “Instead of having to hire new employees, you can send them to Trailhead instead” says Harris. Now talking about how Einstein will provide predictive forecasting. What if you could be a data scientist and create a custom field in Salesforce? What if you could build a smart custom field? We’re going to use Einstein prediction building to predict customer attrition. This can’t be generically put into the product, as it is very specific to your company. A beautiful new component. The Einstein platform is doing all the machine learning for you. Creating the scores and creating the insight. We’re going to get you dynamic layouts with dynamic Lightning Components.” A huge yell comes out of the crowd, as this is something that’s been sorely lacking up until now.

4:03pm PT: Harris continues to demonstrate mobile Salesforce experiences with T-Mobile. Wraps up all the news about the platform and hands the keynote back to Benioff.

4:04pm PT: “Salesforce technology has some incredible assets. One of them is strategic partnerships. Such as with companies like Amazon to deploy in Australia and Canada. And IBM, and Kone, with their CEO Heinrich and his talking elevators. So many companies are using the incredible capabilities of Watson. We have so many great strategic relationship. Today it’s my dream to introduce to you a new strategic partner: Google. You’re going to see an amazing new Salesforce capabilities in G Suite and running on the Google Cloud Platform. And you’re going to see customer insights like you’ve never seen them before, as we’re integrating Google Analytics in Salesforce for the first time.” Google execs come on stage to talk about it.

4:09pm PT: Continues telling the three customer stories. T-mobile story already told, now doing Adidas. Video: “We have to be able to respond to new consumer expectations immediately. If you’re not meeting their expectations at the first point, you’ve lost them right away.”

4:13pm PT: Now Stephanie Buscemi has come out asking if the 4th Industrial Revolution is bringing us together or driving us farther apart. Announcing 1-to-1 personalized journeys for customer using a tool called Journey Builder, whatever your preferred channel is: Mobile, e-mail, social, whatever. With Einstein Social built-in, Adidas is able to detect pictures of their product in social streams. “What all of you want is what Adidas needs to know in order to be successful. We made a really big bet last year. its called a DMP (Data Management Platform, a good background on DMP by Jack Marshall here.) It’s important to know and a game-changer in marketing. It captures Web online behaviors marries it with CRM data, and can then deliver personalized experiences.” Unfortunately, only ads apparently for now. My analysis: The DMP goes a good bit of the way towards mastering the critical “50 first dates problem” in engaging with and providing digital experiences to consumers today in an pervasively omnichannel world.

Stephanie Buscemi shows off the Data Management Platform in Salesforce at Dreamforce 2017 #df17

4:18pm PT: “Einstein bots are changing the world of service today” says Stephanie. Showing the DMP experience and how it’s unified across all customer experiences. Again, it seems about advertising right now, and not meaningfully customized consumer journeys.

4:27pm PT: Now the CEO of Adidas, Kasper Rørsted, is on stage showing off some 3D printed shoes that he’s wearing, which could theoretically print the custom size 14 show that Marc Benioff needs. “We see 1.2 million pairs of shoes a day. The more we can customized them, the more revenue we can produce, and the happier our customers will be” says Kasper.

4:30pm PT: Kasper says “we are opening an Adidas app today. We think by cannabalizing our industry we can completely change our industry.” Now Benioff is introducing the new customer story, of 21st Century Fox. Video rolling.

4:35pm PT: Now Leah McGowen-Hare is on stage talking about 21st Century Fox’s Salesforce journey, calling them a Trailblazer. They are using Quip, the “team collaboration platform”, with over 20,000 Trailblazers at the company. “Companies like 21st century fox have massive, highly engaged audiences. With Community Cloud they can share their enthusiasm and have a stronger connection with the brand.” See my analysis of Community Cloud here, which is one of the more underrated community platform in the industry. Now showing a highly customized Salesforce Sales Cloud that’s completely skinned for the company and called the Global Theatrical System (GTS) replacing Excel and e-mails.

4:40pm PT: Leah showing how AI, analytics, and Sales Cloud can accelerate sales for the new movie Deadpool 2. We get a confetti drop as well.

4:46pm PT: Marc wrapping up the keynote talking about how tech can divide or unite us. “Dreamforce and all of you are more important than ever before. The inspiration is in our own hearts, and where you’re going to take us. Welcome to Dreamforce 2017.

That’s a wrap for the Dreamforce 2017 main keynote, I’ll post my analysis of where Salesforce is going next on ZDNet shortly.

Additional Reading

Relevant for Trailhead: The digital transformation of learning: Social, informal, self-service, and enjoyable

Assessing Salesforce’s platform and ecosystem

Vital Trends in Digital Experience and Transformation | Dreamforce (34K+ views)

Filed under Analysis, Events, The Enterprise, Trends and Statistics

In Digital Transformation, The Art-of-the-Possible and Average Practice Are Diverging

October 6, 2017 Leave a comment

I’ve long noticed an interesting phenomena when it comes to more fully digitizing our organizations. Namely, that it mostly looks like what other organizations have already been doing. Because we are all almost entirely still early pioneers in a brave new technologically-infused world, this shouldn’t really come as a surprise. Since there are an almost infinite number of directions we could go, copying that which we see that works well just makes good sense.

This herd mentality of digital actually has numerous causes: Proven best practices for digital are too few and far between, successful experiments are often hoarded for competitive motivations, digital innovators by definition take on often untenable risks we’d prefer to avoid, and perhaps most of all, we are still trying to get used to the rapid pace of learning that digital requires to stay abreast.

A big reason for this state of affairs is because digital is inherently complex in its realization, intangible by nature (thus it can be hard to study and assess), and difficult to actually understand in context since it’s now so deeply connected to everything else today. This makes it hard to identify the root cause of any desired effects. Combined with the slow rate of change in people when it comes the requisite shifts in culture, skill, and inclination for new digital ways of working, and the result has been a clustering of most organizations around a similar level of digital maturity: Relatively low.

Digital Maturity: Technology Is Driving the Leaders and Laggards Apart

Digital Maturity is a Team Sport

This was made evident a little while back when McKinsey published their in-depth analysis of 150 representative organizations around the world and their digital maturity in 18 dimensions (see graph above.) It uncovered a wide range of digital maturity, but most notably revealed a sort of inverse Lake Wobegon effect, where most organizations were in fact performing well below average.

In other words, average practice is steadily and inexorably diverging from the art-of-the-possible in an exponentially changing era of technology evolution. This is leaving a great deal of space for leaders to find the leaps forward that are dramatically better and thereby own the market opportunities.

Yet, we also know that when applied for its unique strengths — for faster growth, better engagement, reducing friction in commerce, improved efficiency, and so on — technology can be a tremendous force multiplier (something noted about a decade ago by Andrew McAfee and Erik Brynjolfsson), propelling the leaders that focus carefully on these strengths far head of the laggards. This gap is real, which we can see from the data above, and it’s growing quickly in my experience.

Nevertheless, whether I look at the digital workplace, customer experience, or digital transformation efforts that I’ve been involved in over the years, I tend to see the same thing: The application of average practice that, while proven, will assuredly put most organizations into the also-ran list and fail to propel them forward digitally in a meaningful way.

Over time, this has led me to ask what the digital leaders are actually doing that has gotten them much farther out ahead. In short, my ultimate analysis is that they appear to be learning better and faster about digital in key ways — and from a larger variety of sources — than most other organizations. They also then apply these lessons effectively to their business. Digital leaders tend to eagerly gather lessons and evidence broadly and early, especially outside their organizations. Without this, they are limited to what they’re able to learn linearly on their own, through solely their own efforts. There is also good evidence that this is what most organizations do that have survived a long time, from the work of Shell’s Arie de Geus (and which I frequently cite in my keynotes and talks):

These companies were particularly tolerant of activities in the margin: outliers, experiments and eccentricities within the boundaries of the cohesive firm, which kept stretching their understanding of possibilities.

This same line of reasoning has led industry colleagues like John Hagel to conclude that scalable learning, especially across organizations as Don Tapscott has noted in his research on Global Solution Networks, is essentially the only sustainable competitive advantage. But as I mentioned above, competitors usually don’t like to share lessons learned, and it’s often hard to transfer lessons from one style of organization to another, say across industries or geographies.

The key existential question now is this: How can we use today’s capabilities to learn much better as organizations?

Overcoming Digital Transformation Maturity Barrier with Community Learning, Outsourcing, and Copying for Fast Follower

Three Roads Over the Digital Maturity Barrier

How then are digital leaders overcoming the digital maturity better? In my experience, they are doing one of several things that allows them to pool their digital experiences and investments, then tap much more widely and sustainably into shared lessons learned that they can each use and quickly build upon:

  • Community learning. Non-competitors can come together across organizations to share their digital knowledge and lessons learned, and especially, tackle digital challenges too big even for large enterprises. This kind of cross-entity learning primary comes in three forms, though there are numerous ways to do it: Industry consortiums, which we’ve long had, as well as more digital versions of consortiums such as collaborative multi-organizational Networks of Excellence and of course, the aforementioned Global Solution Networks. These require the highest level of effort but are also the most sustainable, effective, and most likely to reduce the risk of disruption by truly capturing and wielding collective intelligence.
  • Outsourcing. Pull in expertise gleaned from hundreds or thousands of other companies by building on someone else’s mature and evolving ecosystem or digital blueprints. Amazon’s cloud stack and Apple’s iOS platform are great examples of this that countless companies are using today (Netflix using Amazon, for an industry leading example), while increasingly we’re seeing industry blueprints emerging for digital transformation of their entire organization. See the overview of my Digital Transformation Target Platforms ShortList for some details on blueprints.
  • Copying the Leaders. This has long been a corporate strategy of so-called fast followers and it works well for some. This approach basically uses 3rd party investments, discoveries, and exposure to risk in an arbitrage fashion, for their own benefit, picking and choosing what works and avoiding the downsides almost entirely, though some have certainly criticized the fast follower approach, others have cited organizations like Samsung as becoming market leaders by using it. Although technically another form of outsourcing, this model also works in a group of competitors. Downside: You won’t have any “moon shots” or big digital breakthroughs on your own and so you’re still at high risk of disruption.

Clearly, this list is in rough order of preference, though all are workable strategies and will likely be used in combination. That said, the vast majority of organizations are taking the easier routes of the second and third items on the list. This means letting Amazon, Google, Microsoft, IBM, and SAP pathfind their future and build on their capabilities/ecosystems, or being content to cherry pick from the successful digital pioneers and hopefully to attain success in that way.

Digital Maturity Requires Harnessing Collective Intelligence

The third way (first on the list), which I see more advanced and mature organizations engaging in, is to work far smarter by combining knowledge, investment, and experience as whole together, creating a network that can learn many times faster than a single entity. The competitive issues can and are usually worked out.

Are there good examples of multi-stakeholder learning? Yes. Some of the most strategic can be found in the list of known Global Solution Networks, but others that I’ve had personal experience with are the famed Fraunhofer Society, open source software projects (many people/organizations coming together to collaborate on common goals via shared technology innovation and development, and the American Society of Association Executives (and indeed, the entire professional association space, which is becoming increasingly digitized and community-centric.)

There is also a fourth route, which many will observe seems to be the case with certain top digital firms: Hire the smartest people on the planet and turn them loose. This is certainly possible, but it’s also an unsustainable zero sum game that the vast majority of organizations simply don’t have as an option to employ (the smartest people always work for someone else, it has been observed.) Instead, we need additional options for reaching digital maturity that are generally attainable by most of us.

Thus, in the flat and hyper-competitive world of the Internet, average practice is just not sufficient to thrive, nor to survive. Organizations must find ways to learn and evolve faster, more widely, and with much more scale than in the past. Cultivating change agents has emerged as one such way to actually achieve this, but these actors need a steady stream of knowledge on emerging new practices in order to drive the organization forward. This is through scalable learning.

As Scott Brinker’s now-famous law (Martec’s Law) tells us, technology changes exponentially but organizations only change logarithmically. The good news is that it’s very much not clear if this is an inherent limitation of organizations, or that’s just that way because of how we have traditionally learned and changed in the past. From my experience in the field of mass collaboration, my view is that it’s almost certainly the latter. There we now have new and better ways to change if we choose to use them.

The reality is that if we don’t find ways to change more rapidly and effectively, the results are potentially calamitous for us as enterprises and institutions. Fortunately, we now have powerful new tools to apply when it comes to digital learning and change. I believe these approaches may be enough for most organizations for now. If it’s not however, I remain confident that we will find even more and better ways to evolve and grow. The digital future is bright, if we’re ready to learn.

Additional Reading

Using Online Community for Digital Transformation | Slideshare Storytelling Version

How Should Organizations Actually Go About Digital Transformation?

The Eight Essential Digital Strategies

Digital Transformation and the Leadership Quandary

Let the Network Do the Work

The Hardest Lesson of Digital Transformation: Designing for Loss of Control

The emerging case for open business methods | ZDNet

The Top Business Trends for the New C-Suite in 2017
(See: Digital Transformation Programs, Change Agent Initiatives, etc.)

Filed under Analysis, Digital Transformation, Online Community, Strategy, The Enterprise

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