The Digital Transformation Equation

In the 90’s, if you wanted to wallow in misery, you had plenty of music choices from grunge to emo to shoegaze to death metal. One of my favorites from the era was Radiohead:

If you needed a song about not belonging and feeling out of place, Radiohead was spot on.

It’s like when I talk to developers at large enterprises. One long-time engineer recently described working at his company felt like he was a zombie. When I asked him to explain, he recited the lyrics to L7’s Pretend We’re Dead:

While he said it was a relief to finally leave, he is pretty sure his former employer didn’t even notice. To recall one of the comic greats, why can’t developers get no respect?

Nearly every company I speak with is currently undergoing some sort of digital transformation. So it strikes me as strange that the people most critical to the successful execution of these transformation initiatives would be ignored and unwanted.

Ford, GE, Nike, Burberry, and P&G are just a few of the recognizable names that suffered black eyes from their transformation. Depending on your source, either 70%, 84%, or 95% of digital transformations result in failure. One German bank has launched three transformations over the past three years and has shutdown each stunted attempt. The graveyard is piling up.

What would compel businesses to spend $1.3 trillion per IDC’s estimate to embark on strategic initiatives that will most likely crash and burn? Why the sudden attention to all things “digital”? It’s because they know that if they do not succeed, there are faster and nimbler companies ready to take their place. And these new competitors are not too worried about breaking things in the process of disrupting entire industries:

Corporate titans are waking up to the fact that the disruption is happening from companies that live and breathe technology:

The attacks are coming from all sides. You have the US based FAMGA (Facebook, Apple, Microsoft, Google, and Amazon). You have the Chinese BAT (Baidu, Alibaba, and Tencent). There are regional super apps like Grab and Naver. And then there are the startups all around the planet in every country. Did you know there are over 300 Unicorns tech startups now?

This is technology created by engineers writing the code that is the driving force for innovation and enabling growth in all companies, including large enterprises:

The challenge is that most large enterprises, saddled with legacy platforms, did themselves no favors. From the 70’s to the 90’s, IT departments were thriving to serve ever more complex business needs. With reengineering, companies moved to streamline operations and costs by adopting packaged business platforms. Once reengineering wound down, companies treated IT as a cost center and wholesale outsourced most of their technology:

Now we are in a new age. Competitive differentiation now comes through building superior and compelling digital products that require skilled developers. This is a renaissance of code:

So companies are now undergoing a transformation journey to shift their organizations to become more digitally oriented. But what does that journey entail?

First step is to insource the talent and build up the required skills. Second is to shift the organization to adapt to a new culture that adapts and learns faster. Third phase is to bring in platforms that enable the organization to be more agile. Then the last stage is to create internal and external ecosystems to accelerate innovation and create better digital products and services that extend value across the delivery chain:

The fuel for this transformation is not marketers or executives or people with “digital” in their title however. They play a part, but it is developers that have to execute and deliver the goods. Companies that find digital success have a supportive engineering culture, a deep talent pipeline of developers, a knowledge platform to allow their developers to be more productive, and active collaboration inside and outside the organization to foster innovation:

Is it any wonder therefore that most transformation efforts fail miserably? It’s important to emphasize that transformation is more than just an IT-driven initiative, it requires the entire organization to adopt radical and often painful change. Without developers though actively involved in guiding the initiative, any transformation effort is dead on arrival.

Perhaps then digital transformation can be best stated as an equation:

When you have the right mix, the outcome can be multiplicative in delivering business results. If any one element is lacking or stalled, then it cancels out the positive efforts in other areas of your transformation. For example, without the right culture, you will not acquire and retain the needed talent. If you do not have a knowledge architecture, you will waste the investment in talented developers that toil miserably in getting answers to questions.

Do you agree that developers are key to digital transformation success? What parts of this equation is your company strong in versus needing more work?

How does a computer restart itself?

True confession, I always used the on/off switch to shutdown computers…

We help IT leaders in enterprises solve the cultural challenges involved in digital transformation and move towards a community based culture that delivers innovation and customer value faster. Learn more about our work here.



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Thoughts on developers, digital transformation, startups, community building & engineering culture. Author is Mark Birch @ AWS 👉