How to Think About and Prepare for Hybrid Work

Over the last year-and-a-half there have been two priorities for digital transformation, with two different transformations that have happened in our organizations. The first was customer experience, and has largely proceeded well, with a few challenges. The other major change was in the workplace itself. Tellingly, the transformation of work has been, frankly, the harder challenge, and always has been.

First, the good news: I have been largely gratified to see that budgets and priorities for digital workplace and digital employee experience are higher than ever before. The reason is simple: The urgency is there like never before. But we’re still having significant challenges getting our organizations focused on meeting worker needs in this regard during the pandemic, even determining what those needs really are. Some parts of the near future are clearer however: By all indications, work is not going to go back to the way that it was.

Instead, the hybrid model is now generally agreed upon by most as the future of work, both physical and remote, but with a need for it to be as seamless as possible across both groups of workers. And ultimately, it’s the seamless part that will be the challenge, the hardest part to get right, and probably the most important part to address.

A return to the office is going to happen at scale soon, and is even now happening in many places in the United States and in the world. But for most, it will be next year, 2022, as the global return to the workplace for most of us. As it was during the pandemic, technology is still the best tool we have to address our problems, challenges, and opportunities with disruptive shifts to the the work environment. But the tech has to address human needs, first and foremost. So one of the big messages here is that success will require aiming at and achieving worker-centricity like never before.

Simply put, if organizations wish to attract and retain workers in these very trying times, where labor markets are so very tight, we have to design it around those same people. So as to be very adaptive to them, and to educate them, and to be focused on their wellness. There have been bold experiments in some of the efforts i’ve advised, where they actually monitor the mental and physical wellbeing of the workers in real time and provide assistance to them if they need it. While these tend to be large organizations that to do this, helping workers to be resilient and helping them to be effective during confusing and challenging moments will be vital. These digital employee experiences will be designed more deliberately not for one audience, not just for the office, and not just for remote work.

Last year I was on record saying that we should focus on designing for remote work-first, otherwise we’re going to underdeliver for the remote worker, the largest group in most organizations. But this year and going forward, we have really have to put in-office and remote workers on the same footing. I also see that most organizations are still unprepared for this. They want to do deliver on it, but they’re unprepared and they’re behind in applying the tools and concepts available to them. I’m hoping what we have now learned will help them get ahead.

Getting the Foundation and Values Right for Hybrid Work

And so in the visual below are the four major focus areas we must deliver on if we wish to be an enlightened organization that seeks to understand what they should best be providing in terms of their workplace and services with their workers in general. Hybrid workplaces — like all workplaces — need to be value-led, and that’s around mutual benefit as much as possible, with shared value exchange and co-ownership. This is already exhibited in many of the things that we see in the most modern collaboration tools: We are co-workers whenever we work together, we share together, we co-create together in a scalable but sustainable way. And it has to be responsible in our world as well, and in terms of creating trust, protecting workers, and their privacy and safety. To be environmentally conscious, ethical and fair trade. All those important aspects that we really value in ourselves and in our organizations. All of this has to be embodied deeply in the hybrid employee experiences that we create in order for them to be properly realized.

We must also be resilient now more than ever before, so ready for that future that is coming faster at us, more chaotically. Workers must be provided with a work environment that is very adaptable to the two main settings of hybrid work. These environments must inherently be harder to disrupt, since it’s increasingly clear that we live in a world that’s more easily disrupted now, and more frequently disrupted as well. And above all hybrid work must address what it means to be human, meaning it is fair and equitable, and genuinely cultivating our differences, because we are all different in our own way.

We must also be prepared to support the edge of our networks and organizations, for experiments and the eccentric but often useful new behaviors and ideas. I’ve spoken many times in the past about the companies that have lived the longest. They have tended to be very humane organizations that are very tolerant on the edge of eccentricities and innovation. As a result and due to fostering this, and providing support for the whole person, not just the worker part of the person, they have lasted the ag, through all disruptions so far.

Collectively then, this is the future of work, the motivations and aspirations that matter the most, as I see it, for enlightened organizations, which most of us aspire to become.

The Biggest Concern About Hybrid Work: The Divide

So if we look at what top leaders are seeking in hybrid work — I’ve spoken with dozens of CIOs since all this started and many CHROs as well — and if you look at their top goals, there’s a real concern about connecting office workers with remote workers. Connecting them together equitably is widely believed to be a very hard yet important challenge. Some organizations are in fact just saying, “we just can’t do it. We’re going to favor the office workers.” A lot are tacitly doing exactly that. And that will really be leaving behind some of their most valuable and most dynamic workers. But many would still prefer not to.

So there is real interest in maximizing the inclusion between office and remote workers. There are genuine challenges in achieving this: What do you do about key worker groups like agile teams, for example? Agile teams are supposed to be co-located so that information flows very quickly among them. I’ve had CIOs ask me how do we deliver agility during hybrid work? Do we keep Zoom calls open between the office workers and remote workers, all day long? While that’s probably not the answer, it’s an example of a central class of problems in digital employee experience that organizations seek answers to:

How do we properly rethink vital business processes that will be divided between two distributed groups of workers?

In general, what organizations actually want to know is what they should do that works? In other words, what are the overall best practices of hybrid work? However, I am sad to report that there mostly is no set of existing best practices yet. Fortunately, over the next year we’ll see the greatest number of experiments in hybrid work that we’ve ever had before. In the process, we are going to find the way, as we collectively learn from what’s really working out there. As part of this, I will gathering success stories, patterns that work, and I will continue to share them.

What’s the Immediate Goal of Hybrid Work?

Leaders also want to preserve the productivity dividend of remote work. Productivity is up in most organizations right now, when we are mostly remote. But now with hybrid, we want to preserve and continue this. And we want to sustain the engagement long term of remote workers themselves as employees. Most organizations I speak with are acutely aware that they have 18 months worth of new hires that many of them have never met. They’re not really connected to the mothership like the workers before. So how do we how do we do that, how do we address engaging effectively with remote workers?. And then how do we deal with all the disruptions that are yet to come? These are the three leading priorities in achieving a hybrid work model. We care about all the other motivators above too, but these stand out.

In fact, if organizations do nothing but address these three goals, they’ll be doing well next year.

The journey itself to hybrid work is now over halfway done. There are three phases that lead there: The pre-pandemic way of working, or the way life that was before, where in-office was dominant and a some of us had VPNs and we could work remotely. And while some did work remotely, but it wasn’t a very large audience. And now that has flipped. We’re still in that flip, with more remote workers than in-office. But people are streaming back now because people are starting to go back to the office. Next year we’re going to end up with that mix, that will average in the 60/40 range, though your mileage will certainly vary.

Key Organization Roles over Hybrid Work

Last year I began to receive calls for the first time from Chief Operating Officers (COOs.) I had never received a call from a COO before. The CIO is the leader that traditionally rolls out new technology solutions and the COO has to operate the company wit the tech the former provides. When they called me, they were saying “I need to be able to run the company with everyone remote. I don’t know what to ask the CIO and CHRO for in order to do this. So how do we do this? I don’t know how to run a company through a WiFi connection. Can you tell me what I should be asking for?”

The Three Phases of Work: Pre-Pandemic, Remote Work, Hybrid Work

And so know this of those in the COO role, they’re very operationally focused, and trying to get their organization through the turmoil of going remote, and now hybrid. Consequently, if you’re trying to drive change, the COO is a role you should be tapping into if you’re seeking to make realize hybrid work today. They’re in the middle of it, they want to do it now (and not in some theoretical future) and they’re willing to try anything to see if it works. So it’s a very exciting new role that we’ve learned that has been involved in trying to make all of these changes during the pandemic both effective and functional.

What Do Workers Need During Hybrid Work

The upshot is that we’re now at this moment in the rebirth of work. That the future is not the model of remote work that we’ve had over the last year and a half. Now is the time when have to start really becoming effective at hybrid work. And that means connecting two very different audiences and that’s really the challenge. To do this, we’ll need a target model for digital employee experience and the resulting engagement that we should be aiming for and can use as a cross-check. Something that we can use to layer our design into and ensure we are creating the right result. As a primary check, I have developed a model for digital employee engagement that is based on Maslow’s hierarchy that has been very well received.

For post-pandemic, this hierarchy is a view of our employee experience needs. If you look at the bottom of it, there are the fundamentals, which is mostly basic access: Getting people access to their devices and the Internet, to their documents, applications, and data, in touch with their colleagues, customers, partners and suppliers, and all the support functions that make them work. This basic access means being able to reach them.

Then the next step up is once you’ve provide access, it is to make the digital employee experience usable. And really because access actually doesn’t really provide that much value without usability, it has to be something you can actually deliver on. And so usability also covers having streamlined digital experiences, making business processes and procedures easily learned and usable, making sure your cybersecurity protections aren’t making the access too difficult. In fact, we still see cybersecurity practices are creating a lot of challenges for usability. Your overall digital workplace can suffer greatly if you don’t solve for easily usable security procedures and experiences.

An organization might have the best digital workplace capabilities in the world with a a wonderful design, but if workers are frequently having challenges just logging in and switching applications, struggling to use it on mobile devices and they’re always struggling to use it, then the rest of hierarchy doesn’t really matter. And so you really have to hammer down those sharp edges before you can get very high in this hierarchy.

Beyond these levels is proactive enablement: How do you ensure that you’re getting the actual work outcomes you’re looking for? That both professional and personal developments are taking place? So this view makes the worker the center, treating that whole person, wherever they are located. This makes sure that that a connection is being established between in-office and remote with effective collaboration that is regularly taking place between in-office and remote.

And if you do this well, then you can actually get to engaged workers. If you’re really connecting to people, and you’re helping them reach the outcomes that they care about, then they can get to and the organization can realize true engagement. That’s connecting with and responding to the mission of the company or the organization with coworkers and colleagues, with management team, and with the work being done. We want them to be engaged and if they are provided the layers below that, then organizations can achieve hybrid worker engagement.

And then the next step is really where, where we are today in many organizations: We don’t want worker drones just mindlessly carrying out processes. No, we can automate that now. Most rote standard work that’s routine can and will be automated. Instead, we need empowered workers that can think, that can innovate, that are able to make both local decisions that make a difference, and be able to influence larger decisions and the wider organization, and to make sure that they can do that easily. That’s empowerment and that’s where a lot of organizations are still trying to get to this point in time.

The next-to-last step in the hierarchy is full realization and autonomy, the ability to self organize, to direct the work. This is embodied in the famous Steve Jobs quote saying, “I hire really smart people, and then I ask them to tell me what to do.” The bottom line is if you have these layers properly realized below then you can get truly autonomous and strategically contributing workers that are engaged in the mission, who are able to then innovate and be able to direct that to an outcome. And so this all this leads to self actualization and the maximum potential of the worker, which we now have to take care to provide in a hybrid work environment.

While we can never reach our maximum theoretical potential, we should in fact be able to get pretty close to our maximum practical potential. So aim at this. This is a nice clearly laid out goal that will ensure that will help organizations prioritize how to create a human-centric workplace that will function both in a hybrid environment and in wherever else we find ourselves in the future.

We Must Go Faster and Better, Beyond Basics to Real Hybrid Worker Needs

Instead, what workers have today is not designed against a consistent model such as this hierarchy. Thus is has low usability, low access, and low empowerment. It’s often mostly a jumble of technology that’s not aimed at a coherent employee experience and it has very little overall design. And while we can never design all of it, we have to design a lot more of it today and now for our emerging world of hybrid work, particularly the important piece: The core employee experience. These are the prime activities workers carry out the most or are the most important. So we have this new worker journey, a more coherent digital experience. Today it is the whole worker journey, and we have all these things: The applications the devices, the data, our culture, our processes operations, and we need to design around that coherent experience so the beginning of the worker journey, the middle of their of their journey which is where they spend most of their time, and then finally the end of the journey.

Consider all this, what I’ve been encouraging organizations to do — and this is the next useful framework — is think about that journey and say how do you make, how do I make sure each step of that journey, supports the hierarchy that was just described. To ensure that it is a fairly simple cross check. I’m getting lots of feedback that basic cross checks helps focus on what matters most. And so what we want to do is get to a more orderly foundation for employee experience. So we want to take today’s current relatively random, grab bag of tools, technologies, files, and datasets and so on, and create an employee experience platform that’s better designed. One that’s better aligned aligned to that journey and delivering to that hierarchy of worker needs. So this view above is another key cross check that can make sure that organizations can get to hybrid work.

The result is still largely the same grab bag of workplace technologies but now better shaped into an experience platform that actually can help us achieve a true work-from-anywhere foundation and a true hybrid work foundation that’s proactively enabling, is adaptive and automated in terms of when they need support and help, and deeply personalized and contextual with all the technologies. What’s more, we have reached a stage of maturity of the ideas that we need to make this happen are already here. We just have to deliver on it, and we start with the core employee experience.

These then are all the pieces one needs to check to make sure they have everything they need for a next generation digital employee experience. This is the full strength vision. But the key is this: We have to have deliver two versions of our experiences now. The remote version and the in-office version. They’re often not the same. How people work, how people collaborate, or how they get onboarded as workers are different if they’re remote and different if they’re in the office. So we have to we have to reflect that in the employee experience. If you’re giving everyone the exact same employee experience, you’re leaving a lot of value on the ground and disengaging the worker it doesn’t serve well.

The result is going to be les fit to purpose and is going to be slower and not as effective for one half of your workers. And when we, when we need to be worker-centric, we can’t do that anymore. Thus we now have this bright dividing line in our holistic employee journey: The remote and the in-office worker experience, and bringing them together is hybrid work.

Seizing the Moment in Hybrid Work

This is a historic opportunity that many of us will probably never get again. We may never get the leadership attention, organizational priority, or the budget like we can today, or the ability to drive large changes in work like we have right now. Now is the time, while everything is still in motion to make a big change, a meaningful set of changes around the future of work. To actually succeed, we’ll need to use very clear methods. Let’s use this well-defined hierarchy and let’s use this mature worker journey, and let’s go through everything that we have and where it makes sense, let’s align to that. While you can’t change everything, you can change what matters most. That’s all we really have to focus on right now for hybrid work.

We now have to create now a hybrid working culture and mindset that’s gets our top executives and the line workers engaged as a whole in a distributed but very lumpy new construct. Many of you know that I’m a very big proponent of open collaboration, also known as mass collaboration, that best drives almost all the outcomes that we want to have and all the things I just described. There are ways of getting the organization engaged around the shift to hybrid work, and around what you’re doing and around the changes that you need to have in empowering change agents in your organization. In fact, of the things that we explored in our industry for the last decade and a half, how we collaborate and realize change is more important than ever.

Technology, and especially seamless and effective community and collaboration, are the fabric for how we’re going to achieve successful hybrid work. And so the end state is this open collaborative highly adaptive contextual, automated, and personalized employee experience on your evolving employee experience (EX) platform, directed at two distributed groups. One that really is designed not just for the moments that matter to the business but moments that matter to the worker. Put simply, if you want to attract and retain the best workers, that’s what you’re going to provide. You’re going to provide something that has the everything the business needs and everything the worker needs as well, no matter how they best work or where they are located.

End Note: This blog post is adapted from a keynote I recently gave at IOM Summit. It contains much of my latest thinking on hybrid work and references all the research I’ve conducted and some of the great many industry conversations I’ve had recently.

Call for Participation: If you are in a position to do so, please help me map the future of work. I will be closely tracking the many experiments of hybrid work over the next 18 months. If you wish to be part of this tracking and information process, please send me a note at dion@constellationr.com, and I’ll include you in the process so that we can all learn from each other. I’ll also be publishing snapshots of the journey so that organizations who cannot participate for whatever reason, can join along in the journey.

Additional Reading

My recent research on remote and hybrid work:

Reimagining the Post-Pandemic Employee Experience

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

Research Report: Building a Next-Generation Employee Experience: 2021 and Beyond

The Crisis-Accelerated Digital Revolution of Work

Revisiting How to Cultivate Connected Organizations in an Age of Coronavirus

How Work Will Evolve in a Digital Post-Pandemic Society

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 Hybrid Work Management Skill: Network Leadership

My 2020 Predictions for the Future of Work

Can we achieve a better, more effective digital workplace?

Revisiting How to Cultivate Connected Organizations in an Age of Coronavirus

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)

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

One of the most challenging questions to answer about digital employee experience today is where the center of gravity for it lies. As in, where does the worker, by default, spend most of their time using it. The answer used to be that the worker themselves determines it, often with specific guidance or training, by figuring out how to apply the devices, applications, tools, and platforms to which they are given access, to their daily job. This self-guidance generally defines the typical digital workplace journey even today, and constitutes the sort of benign neglect, throw-it-over-the-wall situation that we current find in many organizations.

Knowing where the center of gravity should actually be has become important lately for several strategic reasons. First, it’s very useful in identifying where digital workplace teams should spend the majority of their design and analytics time so they can ensure what they provide works well and is optimized for the purposes to which its currently being used. Second, because the digital employee experience has become so fragmented and siloed that just finding and navigating apps, data/docs, channels, and experiences has become its own significant overhead, it allows us to identify where we should be integrating said side journeys into a common hub.

Finally, it just gives us a better operating lens to the digital life of the employee and the business: We can see how to better situate IT within the broader worker journey to produce the best outcomes, onboarding and cross training becomes simplified through a more standardized user experience and thus faster/easier, which means satisfaction and retention becomes higher, adoption/effectiveness of digital workplace investments is greater, and so on. Why? Because this lens provides a more systematic and overarching view that aims at overall stakeholder needs better. It also avoids the traditional point solution myopia that makes it hard to see the big picture or understand properly how an IT system actually contributes to the business (a surprisingly thorny problem.)

An Integrated Holistic Employee Experience and Digital Workplace/Intranet

A number of virtual “places” have come and (largely) gone over the years that attempt to partially address the center of gravity issue. That’s because of the significant payoff in doing so compared to focusing on less traveled — off dramatically less, areas of the digital workplace (see: SharePoint team site graveyards, largely abandoned intranets, and almost useless search engines.) There’s also a lot of edge IT to sort through: The average large enterprise has, to the surprise of most I find, between 1,000 and 3,000 applications that run the business.

But in my experience over the last couple of decades, although the number of apps keeps growing substantially, most employees only use a small subset on a regular basis, usually a foundational set that almost every employees uses, then a different set of apps based on their work persona.

Currently, my rule of thumbs is that core employee experience can be addressed by putting the hundred or so core apps (give or take 50, depending on the enterprise), as well docs, comms channels, and systems of engagement, into a more centralized experience. Yes, the future of IT is distributed, but experiences are not. They are the vital new outcome-centered, cohesive journeys that take workers through their role-based processes, tasks, and helps them get to value-based outcomes as quickly as possible.

I would strongly suggest that if we are to see any dramatic improvements to the digital workplace, it will require moving beyond a largely accidental one to a more deliberately designed one, albeit a digital environment where the edges and even much of the center are shaped, personalized, and customized easily by IT, the worker, the local team, and managers as a collaborative effort.

While parts of this notion are now gaining broader acceptance, what’s even better is that we’re now seeing a generation of digital workplace tools emerge that actually enable it (I’ll explore these soon.) Thus, I am now being asked what does such a core experience look like? How does it manifest itself? Is it a Web desktop, smart intranet, a digital experience platform, or a converged mobile app? Is all of these or what? This is what we’re collectively trying to determine, and has been the crux of the issues and roadblocks for so many digital workplace teams of late.

Key Features of a Modern Digital Workplace

Having been on a number of such enterprise-wide digital workplace design efforts in recent years, I can attest to what such a core digital workplace should consist of. Borrowing from my projects with clients, industry research, and analysis, here is what — at an absolute minimum — I believe must be the capabilities and features of any modern digital workplace hub or center of gravity:

  • A central experience accessible from any digital environment the worker will use
  • A consistent usability model to the degree possible given a highly heterogeneous user experience within the hub
  • Foundational feature set (file/doc sharing, content management, task management, collaboration, comms, online community)
  • A straightforward and easy-to-learn information architecture, variable by persona
  • A way to define personas with easy matching to unique branches in the experience, IA, central experience
  • Global search and discovery that works
  • Administration and community management features
  • Robust 3rd party software integrations and app store
  • Online training and digital adoption features, native or add-on
  • Easy-to-add business software integrations (for custom built, internal LOB apps)
  • Customization options for branding, internal whitelabeling, etc.
  • Datacenter locations and choice (logic and data residency)
  • Deployment options (on-premises, cloud, hybrid)
  • Directory integration (people and groups) including multi-directory
  • A persona mapping tool and/or assessment process to take the employee directory and assign workers to personas
  • A rich ecosystem of customers, partners, ISVs
  • Extensibility and integrations via modern microservices/master graph, APIs and SDKs
  • Governance and compliance controls
  • Native-quality mobile access
  • Personalization features (manual or algorithmic, AI)
  • Low code/no code experience and workflow creation by IT or business users
  • A digital studio to design task specific end-to-end business processes across multiple apps
  • Smart assistive AI across ad hoc cross app usage and workflows
  • Reporting tools and workstream/outcome analytics, across integrated apps
  • Next gen interfaces including voice input, voice/video transcription, smart assistants, gesture control, VR/AR
  • Scalability and robustness
  • Security and privacy features
  • No restrictions on who the worker can collaborate with (any audience, inside or outside the org)
  • Data migration/import from older/previous platforms

The details of what some of these features actually consist of is an exercise for broader industry discussion, which I plan to continue collaboratively online. But it’s safe to say that I think most practitioners would support the majority of what’s listed here. However, I would go a step forther further and underscore that each and every feature is the absolute minimum acceptable set today to achieve an effective digital workplace and employee experience.

The Next Digital Workplace Will Not Resemble Today’s

I also believe large forces and missed opportunities are at work, given the rapid growth we’re seeing in shadow IT for digital workplace, the relatively dire state of the overarching tech-enabled employee experience (workers are generally just clamoring for the rudiments to actually work well, and only 22% think they have a good employee experience at all reports Deloitte). The implication is that most enterprises are not even delivering the fundamentals well, much less zeroing in on the right feature sets that will move them into the future. Instead we are focusing on isolated, over-centralized, one-size-fits-all content-based experiences, and neglect the overall condition of the journey. Instead, we must shift focus to more holistic and connected app-based experiences explicitly designed to deliver the meaningful and effective user experiences that we so deeply wish for and desire.

For the better, the approach of rolling out a largely disconnected grab bag of apps from a checklist is no longer a viable strategy for tech-enabled employee experience. Instead, the modern digital workplace is becoming much more of a common fabric upon which we can design, contextualize, analyze, and optimize the worker experience. It is also highly malleable, 1:1 personalized, and hyperintegrated. Finally, this new smarter digital workplace is anticipatory, predictive, journey-based, data-driven, user-obsessed, and design-informed, including, perhaps most importantly, explicit design for loss of control.

Additional Reading

The Challenging State of Employee Experience and Digital Workplace Today

A Comprehensive Overview of Modern Digital Workplace Trends and Emerging Practices

My Predictions for the Future of Work in 2020

The Challenging State of Employee Experience and Digital Workplace Today

It’s a very difficult time to be in the business of providing a digital employee experience today. By digital employee experience, I mean the totality of the end-to-end digital touchpoints that a worker uses to get their job done. This view is also sometimes called the digital workplace, and it includes all the devices, apps, and data that a worker employs in their day-to-day work, whether it’s company provided or not (as we’ll see, an increasingly fraught topic.)

But digital workplace is now seen by many, including by myself, as an inadequate and incomplete construct. Certainly, it consists of the local intranet, computer desktop, productivity tools, enterprise search engine(s), collaboration apps, and line of business systems, most of which was acquired and deployed with almost no thought to how they should fit together as an overall digital journey.

In other words, though I now see more and more digital workplace groups within organizations who are actually in charge of it, the reality is that we’re a long way from a consistent, seamless, effective, widely adopted, and well-designed digital workplace.

The Complex Digital Workplace Landscape of Apps, Data, and People We Must Design Into an Employee Experience

The Issues in Realizing an Effective Digital Journey for Workers

There are a complex and interrelated set of factors on why digital workplace is in reality very much on the ropes in many, if not most, organizations. In my view, the critical factors are:

  • Employee experience is proving to be a more complete and effective view of digital enablement, but comes in at a harder-to-address and rather disruptive angle. The employee experience takes into account a much more complete view (physical, cultural, and technological) of what employees should have addressed in their digitally-enabled work lives. Yet this view, while likely to produce substantially better outcomes if it’s realized through this lens, is highly problematic in that it clearly straddles at least two major organizational silos: HR (the people component) and IT (the digital side) in order to achieve, plus some other groups as well, including everyone from facilities to compliance and regulatory. Getting all of these groups to work together at the same time — and with the same vision — is very challenging.
  • Apps have proliferated by the millions and become hyperspecialized. Every function in the business (marketing, sales, operations, legal, HR, etc) are getting highly targeted apps that they can use to address their work much better than the general purpose, one-size-fits-all that IT much prefers (for cost, manageability, governance, etc.) Consumer and enterprise app stores are filled with countless solutions that will do exactly what you need for an individual task. The supply side of IT has become so vast and large that it’s almost impossible to be a departmental conduit for it (like IT is supposed to be) or design up-to-date experiences around this galaxy-sized pool of choices.
  • The cloud (especially SaaS) and mobile app stores have definitively disrupted IT, creating vast and rapidly shifting Shadow IT dominions on the edges of organizations. While ERP, HR benefits systems, e-mail, and the proverbial cafeteria menu/corporate HQ driving directions pages on the intranet don’t seem to be affected, everything else, starting with CRM and going deep into every corporate function, satisfying near every user requirement, whatever it is, for cheap (often for free), available right now at a button click, has upended the game. Marketing departments are almost certainly the leading example of this: The excellent Scott Brinker has been tracking the vast explosion of apps in this category, going from about 150 in 2011 to a staggering 7,000+ in 2019. What’s more, the churn in the category is astonishing, with 83% of marketers ripping and replacing key apps each year. Other functions are seeing similar proliferation of choice as I’ve shown in the past (and they’re often very good options indeed), though not quite to the degree that marketing groups are experiencing.
  • A strong desire and legitimate need to have a more integrated, centralized, simplified, and streamlined set of digital workplace tools. The above trends are driving a strong inclination — even an imperative in many organizations I speak with — to create a center of gravity for digital work. This is where apps, data, and people are brought together as much as it makes sense and where functionality can be more easily accessed and used (and searched), without switching between hundreds of apps or importing/export data all day or struggling to get co-workers to join and adopt yet another new app, service, channel, or collaboration tool. I’ve called this the digital workplace hub, and something like it is needed, though arguments have been made (by me as well) that mobile devices and their operating systems are ultimately heading in this direction. Enterprise apps such as Slack, Box, and others have increasingly managed to create large numbers of integrations to business systems that workers can use, though said workers are not actually trained for the most part how to benefit from or use these emerging hubs.
  • Design is absent from the overall digital employee experience. We simply haven’t used employee experience as the lens to consider what we should do, and moreover, we haven’t had the tools or composable apps to achieve a more designed experience. With the widespread rise of microservices and easy-to-integrate online apps via APIs, this is now all changing. We are now able to carve out and bring together the features, experiences, and journeys from most of our IT systems into a more comprehensible design that’s better designed (though, never finished and very much co-designed with individual workers, who already do most of their employee experience design day-to-day.
  • The need for digital workplace, and consequently now employee experience, to reflect a wider range of an employee needs, to drive overall engagement, which digital tools are actually very capable of delivering. I often say that nothing is worse that hiring smart people and then giving them poor tools to do their job, or just as bad, a terrible overall employee experience. We simply have to do much better with design of our employee experiences.
  • Limited tools, platforms, models, or prior experience to dealing with all of this in our industry. To be clear, we are in uncharted waters here. Never has the digital workplace or employee experience landscape ever been anything close to as large or complex as it is now, and it will only get worse for most. While I am tracking some early lessons learned, new tooling, and initial planning/design frameworks, we are in early days. As with most of digital, we will all have to get very good at complexity management at high scale.
  • High levels of technical debt and insufficient willpower or support to comprehensively address the core issues. I’ve talked about issues of ever-faster accumulating technical debt before, and it can’t be forgotten how much this hold positive change back. Cloud will help for a while, but new architectures are going to be required.

How Will We Overcome These Challenges?

What is IT, and indeed, HR and the whole organizations due to address these very considerable obstacles and headwinds? That is the question. I’ve argued that the methods that we ar led to by the concept of Design for Loss of Control will be key. I believe in this more now, than ever before.

People will also be key to this. While cultural change will be the hardest and take the most time, we don’t have to wait for it. Harnessing and enabling change agents who are hungry to improve their local digital workplaces and employee experience will provide a lot of the scale and local change that we need. Other techniques are emerging, such as digital adoption platforms. I am actually very hopeful that we’ll get to a much better place, but not until we’ve learned a lot of those hard lessons. I’ll be surveying our BT150 digital leaders en masse early this year to see what they’re doing to improve this state of affairs. I’ll release the data when I have it.

Until then, we have to take what we’ve already learned to heart and apply it: Use employee experience as the master lens over it all, and use exponential methods to realize it. Collaborate with everyone in our organizations that we’ll need to make it a reality. Measure and improve it often. Be inclusive, and don’t overcontrol. Good luck.

Additional Reading

Creating the Modern Digital Workplace and Employee Experience

How to Develop the Minimum Viable Employee Experience

Tech Foundation for Employee Experience: An Integrated Stack

Four Strategic Frameworks for Digital Transformation

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

Why Microservices Will Become a Core Business Strategy for Most Organizations

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

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

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?

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

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.)

Internet of Things Strategy: It Will Determine Your Organization’s Future

Few technology developments will ultimately have the global cultural, business, and economic impact of the Internet of Things (IoT.) While today IoT still looks like an industry largely concerning itself with factory automation, connected light bulbs, air conditioning controls and so on, the eventual objective is clear even to a casual observer: Nearly everything in the world is about to become connected and data-driven, from the most trivial object to virtually every significant item in our personal and work lives.

The implications of this shift are profound: We’re about to be able to measure and quantify just about everything that exists. While there will be the requisite debates about whether this is always a good thing, the implacable march of technology development will ensure it’s going to happen anyway. When a new enabling technology arrives and is useful, it finds its way into just about everything.

The implications alone for IoT and the healthcare, insurance, financial services, logistics, manufacturing, and energy industries — to name just the most affected — are profound: For the first time in human history, most aspects of our business will be measurable, and therefore to paraphrase the famous Peter Drucker saying, they can actually be managed in a more direct and effective way than ever before possible.

Internet of Things: The Next-Generation Customer Experience

IoT will also be critical to the next generation of customer experience, allowing us create more personalized and far more useful experiences while maintaining direct and continuous connection — and most importantly, value exchange — with our customers like never before. Customer experience is the product we must all produce in the future and IoT is how we’ll realize it. As Stuart Lombard, CEO of Ecobee, noted last week during his appearance on DisrupTV.

As the current wave of Internet of Things emerged on a scene a few years ago, I wrote an analysis on whether IoT is truly strategic to the enterprise (short version: it is.) Though the exact growth projections continue to be debated, given the inevitably vast numbers of devices and the staggering data volumes they’ll create (large enough that it’s even driven the need to push cloud capabilities back to the edge of the network), it’s now evident that IoT will be the largest new technology industry to date, far eclipsing even mobile computing.

In other words, tens of billions of connected IoT devices, many streaming rich media and other high volume data types around the clock, are already in the process of arriving today and steadily over the next few years. In the process, they will remake the digital and business landscape as they do, as they represent enormous opportunity for new disruptive new products, services, and business models. At the same time, IoT will also pose very significant infrastructure, operational, management, governance, and security challenges for most enterprises due to scale, skill shortages, build-out, and related issues. Organizations must prepare at the highest level for this and put IoT in the middle of their digital value chain as they digitally transform. The resulting IoT strategies will determine their future as a business in profound way.

It’s evident that IoT is a core part of the future of digital and is the next customer experience mandate. We will simply have to be connected to our stakeholders in this way, holding them close across myriad digital channels, providing value in a way that only real, sustained, and live connectedness and engagement can.

Deep Digital Connectedness Requires a New Mindset

To help frame up this story, I was pleased to contribute recently to a significant new IoT strategy ebook produced by SAP, along with many of my industries colleagues. The book does an excellent job teeing up the mindset and thinking required to capitalize on the historic opportunity of the Internet of Things. Thanks to Amisha Gandhi, Jim Dever, and the SAP team for inviting me to contribute. Note: My contributions start on page 7.

The Future of IoT ebook itself is free, has a nice digital customer experience of its own, and covers the following topics:

Future of IoT ebook: Insights on the Future of the Internet of Things (IoT)

1. Focus Forward on the IoT and Business
2. The “Intelligence of Things”
3. The evolution of smart devices and how business will leverage the IoT
4. The Customer Journey
5. How will the IoT affect the daily lives of consumers?
6. The Internet of Truth
7. Concrete data leads to better decisions
8. The Forward Focus of Business
9. Strategic advice on the IoT for business leaders

SAP eBook: The Future of the Internet of Things (IoT), with Dion Hinchcliffe

Other contributors were an all-star cast and include Ronald van Loon, Yves Mulkers, Maribel Lopez, Bob Egan, Christina “CK” Kerley, Bill McCabe, Ahmed Banafa, Joan Carbonell, Jim Harris, Daniel Newman, Evan Kristel, Chuck Martin, Dez Blanchfield, Isaac Sacolick, and Giulio Coraggio. Brian Solis also shared his thoughts about the ebook as well.

Additional Reading

The Essential Digital Strategies

SAP Leonardo, IoT, and Digital Transformation: The Strategic Implications

Visual: The Top Digital Shifts the Enterprise Must Take On Today

The enterprise technologies to watch in 2017 | ZDNet

Tech Trends AstroChart for The New C-Suite, Q3 2017 | Constellation Research

The Essential Digital Strategies

The reality today is that despite seemingly endless advances and a steady river of emerging technologies, many of the key insights, strategies, and lessons in the digital age have still yet to be discovered. Looking back, we are frankly still early in the pioneering phase of digital, despite significant early ground being claimed and several generations of impressive success stories emerging.

Therein lies the opportunity for most of us.

Thus, despite all the esoteric talk over the years of network effects, the red queen treadmill, strategic platform plays, and winner-take-all, it’s now clear that the digital market is so fluid, self-creating, and essentially infinite, that most of the value by far still remains to be created and captured.

When I say digital age, I do mean since the advent of the Internet, which as we look back on it now was a truly epochal event whose impact will be felt profoundly for the remainder of this century, both inside and outside our organizations. This isn’t an understatement: The vast, easy, simple enabling of global digital networks of people and organizations has been a genuinely a revolutionary one. Today’s networks can be of any size, any form, and can effortlessly enable us to come together en masse and collaborate for purposes of creating incalculable human value — many of which were hitherto simply impossible, and all at a cost that relentlessly falls towards zero.

Far too many people I talk to today, including many digital strategists I find, still do not fully appreciate this time in our history. Most of us are coming to terms with and beginning to understand what digital can do, both for positive outcomes and otherwise (as all technology is a two-edge sword.)

Digital Setting the Global Growth Pace

Yet while digital in all its many forms is now well down the path of transforming our economies, enterprise, and society, we do have a growing sense of what the art of the possible is. It’s clear that digital is now of the primary aspects of how we live and work, and so we must shape it into what we want it to become. We have only to look at tech firm exemplars like Amazon, Google, Facebook, Airbnb, and the 183 companies currently in the so-called “unicorn club”, namely digital startups worth over $1 billion, to find the companies that are creating the most new large-scale business potential. In fact, over the last 10 years, digital companies have surpassed the traditional corporation dramatically, now making up five of the six most valuable companies in the world by market capitalization:

The World's Most Valuable Companies: 2006-2016 - Apple, Alphabet, Microsoft, Amazon, Facebook, Exxon

Put simply, it’s far easier — and more valuable economically — to grow a company in a digital world than it takes to do it the traditional way with physical offices, departments, divisions, stores, factories, and vast workforces to run them all so that you can build products and deliver them to customers individually. The cost of doing it the old way is by comparison simply enormous and increasingly prohibitive, even if we’re not talking about eliminating the old world entirely. An amalgam of the two is happening, as we’ll see.

Note: In a digital world, you still need people of course, and some infrastructure, just orders of magnitude less typically. A canonical example of this is WhatsApp, which only needed 50 direct employees to deliver services to 900 million users at the time they were acquired for $19 billion by Facebook.

What Are the Top Digital Strategies Today?

There have been a good number of attempts lately to quantify what the top-level “known quantity” digital strategies are, since for all the reasons above these should be the top targets for the digital transformation process within most organizations. One of the most recent examinations of this is an exploration by Jacques Bughin and Nicholas Van Zeebroeck’s what they believe today’s 6 core digital strategies are. It’s a good overview, especially the insight that for over 2,000 organizations the value of such digitalization has in general been only a little above the cost of the capital to get there. In other words, most efforts don’t generate unicorn outcomes. (Though to be fair, they shouldn’t be expected to. Digital is a numbers game and it’s why VCs invest in pools of startups than in one or two efforts, but that challenge is another story.)

However, I’d argue that Bughin and Zeeborekc’s digital strategies tend to be ones that traditional organizations would be more able to carry out by their existing inclinations and nature. It’s far easier to move into e-commerce, for example, that it is to become a platform company, as the former seems familiar to traditional organizations, while the latter has entirely different rules.

Being a truly digital organization means thinking quite differently than an industrial age organization. I find the above mentioned strategies to be less transformative and meaningfully sustainable than what is possible and evidently required to get the gains that the more green field unicorns are seeing.

The Essential Digital Strategies for Business and Transformation Today

Instead, other research has come up with a slightly different list of strategies, notably recent research by Libert, Wind, and Beck, which shows a breakdown that focuses on price-to-revenue impact. They identify asset builders, service providers, technology creators, and network orchestrators, in that order, with the latter coming out far head. As we’ll see, this identifies more strategic value creators for digital than the previous set of strategies, yet I find that it’s also incomplete in terms of describing digital strategy by not taking into account some of the more tactical approaches.

In my own work with clients, I’ve used a more comprehensive and strategic list of digital strategies — along with applied integration with some of the many proven and/or emerging digital business models that now exist — to identify where organizations should be focusing their valuable leadership time, execution resource, and organizational capacity.

The 8 Essential Digital Strategies Today

With the disclaimer that we’re learning more all the time about which are the most significant and impactful digital strategies, here’s the leading models that exist today, in increasing order of strategic value:

1. Automation

This was the first generation of applying digital to business and didn’t even require networks, though they certainly added an inflection point when they arrived. ERP, CRM, and business process management (BPA/BPM) are all examples of IT automation of the business. The growth of corporate productivity as a direct result of technology automation is a well known story. There is plenty of value here worth investing in, but primarily of the cost-cutting and efficiency variety. Automation will not even prepare organizations for their digital future, so its score is the lowest of all the digital strategies, but is nevertheless the most common form of digitalization. IT vendors such as IBM, Microsoft, SAP, and Oracle have long played a key enabling role in this strategy, but most of them have since moved their new products and services to other digital models below.

2. Legacy product/service digitization

This strategy involves taking existing products and services and putting a digital face on them. This was done by the entire airline and hotel industry in the 1990s and was finally taken up by the retail, media, and financial services industries in the 2000s, in the form of transactional Web sites. Telecom and other industries most affected by digital disruption have often done a very poor job of legacy digitization. While most organizations must look to digitize legacy products to sustain their organizations during digital business model transition, the rise of the unicorns shows us that the largest growth and value is in new markets and technologies. Unfortunately, the majority of traditional enterprise have done a relatively poor job creating effective customer experiences for digital, though the lessons are getting clearer now. Bottom line: Like automation, legacy digitization is a responsible and required investment, but not necessarily highly strategic nor likely to enable survival for the long term by itself.

3. Digital channel distributor

Getting digital products and services to market requires far more than a digital experience at a handful of touchpoints. Instead, it requires marshaling digital channels of all kinds, both self-realized as well as enabling 3rd parties, to flow value from source to customer. Digital affiliate programs (Walmart pays 4% or more gross commission to enable this, for example), marketplaces, arbitrage services, business app stores, open APIs, and other channel reach models such as Amazon’s Alexa Skills are all examples. Even the stodgy insurance industry has gotten into the digital channel game, with insurance giant Chubb partnering with Suning to distribute insurance products to the online Chinese retailer’s ecommerce network, with 230 million users.

4. Marginal market making

Once you have a digital audience, it allows you to expose them to new offerings and digital experiences. This enables incremental new gains that would have been cost-prohibitive without pre-existing investment in that digital market or channel. For instance, Amazon, a good example in so much of digital, allows any of its customers to become individual sellers, tapping into an existing marginal segment that would not have been worth the investment otherwise. While not a big business by itself, this strategy can further tip the competitive scales by generating additional revenue while becoming even more valuable to customers.

5. Technology creation

While having formidable barriers to entry due to capital expenditure, though certainly much less so on the software than the hardware side, there’s no denying that creating a must-have technology remains one of the top digital strategies on the market. Technology creation has created trillions in economic value over the years for companies that solve important problems for their customers. From hardware like smart devices to must-have apps for social networking and messaging to search and media consumption, technology creation can lead directly to value creation like few others digital strategies.

6. Digital platform ownership

Most of us are now familiar with the digital platform discussion, made famous back in the PC days with Microsoft vs. IBM, and now much more familiar to us as iOS vs. Android or Amazon Web Services vs. Microsoft Azure. If you build a platform that can be extended, instead of a just a single point technology, it can be enriched many orders of magnitude further by others, creating an unbeatable network effect over time. Apple and Google have attracted millions of apps collectively to their mobile platforms, while hundreds of thousands of businesses and software companies have built on top of AWS and Azure, making them indispensable foundations that will be vibrant and growing largely through the effort and investment of their platform partners.

7. Network orchestration

What if you could take the assets and technologies that already exist on the network, connect them, and turn them into business models? That’s the premise of this digital strategy, which the likes of Uber and Airbnb have shown pay off in spades. The essence of this strategy is the following: Use existing infrastructure and resources (connecting people who have cars with people who needs rides, for example) and make it the most appealing process. Organizations can create fast-growth new lines of business in very short amounts of time than using the traditional, slow, and out-dated approach of trying building everything yourself, a prohibitive and unnecessary cost today.

8. Ecosystem cultivation

Orchestrating your own platform and enabling it become an ecosystem is the most valuable digital strategy of all. Amazon does this with Amazon Web Services by extending it with marketplace built on top of it, as does SAP with its new but already large and growing SAP App Center. The key here is not just in owning a platform but in making it a recombinant living ecosystem that is directly enabled and extended by each and every new partner, through their own respective ecosystems. Apple does this by allowing other platform partners to build on top of it, a specific example is much of the consumer Internet of Things (IoT) industry, such as Philips Hue and other connected device product lines. Another important example is commercial blockchains, which are poised to become major category ecosystems in their own right, highlighting a path towards a major new digital future. Short version: Ecosystems are as much about their community of business partners, not just the technologies or platforms within them.

Digital Strategy: The Story of Disruptive Co-Evolution

Is this list of strategies an oversimplification? Almost certainly. Is it incomplete and will it grow. Absolutely. Yet it also provides a clear lens through which to look at the heart of an existing organizations and making momentous changes. Smart organizations will grow digital competency — largely through talent — that can quickly execute from the start to the end of this list.

How will such changes be made in large organizations? I’ve been exploring that and grappling with the means of digital transformation and the future of technology enablement in my work for years and some broad outlines are emerging. So in the meantime, brush up on these and get ready for one of the most interesting and challenging times in business history.

Additional Reading

In Digital Transformation, Culture Change Goes Hand in Hand with Tech Change

Vital Trends in Digital Experience and Transformation Today

22 Power Laws of the Digital/Social Economy

Old but still interesting: Fifty Essential Web 2.0 Strategies