Raising Duocorns
It was great to be part of the new travel agency. The travel agency was essentially selling trips to the promised land: the Great US of A, California, home of the garage startups, land of the customer focussed platforms.
Customers from the old world, EMEA, would sign up to listen to, experience, touch and feel the stories of the great new companies. Digital platform giants like Twitter, Salesforce, Google, Apple, and many others. They would also visit the company I worked for in Palo Alto. Perfect new energy, many new ideas, we need to become a platform was the essence of their learnings. They would all return to SFO on a natural high.
Once they returned home, to the Netherlands, Belgium, France, Germany or any other country, the problem started.
What was not clear, not mentioned, simply ignored in the excitement of the trip to the platform Walhalla was this: all the companies started from scratch, had no legacy, we’re extremely customer focussed, mainly sell services and were loaded with VC money.
While that is a great business model for startups, and increase of debt is a indicator of startup success, the one remaining question was simple. How do we make this work in the old world, in our existing company. Our own company that has a customer base, needs to make a profit, has all sort of legacy and is product centric, still product centric, and very much so. How to digitally transform an existing company is a very different animal that raising a new one.
Over the years various approaches have surfaced. The main 2 approaches I have been part of are on the one hand the transform your existing business model, transform your existing IT. On the other hand there is the mode 1, mode 2 approach that is setup as a new company, with a new business model and new IT setup possibly even in a new company like a corporate funded startup.
Both have pros and cons, both can be successful. The ones that failed mostly focussed on this digital transformation as an IT program, not realising it is a business transformation to become digital, supported, enabled by new IT options.
They also most likely failed by totally ignoring the human element in transformation. No culture change, no new leadership style, no looking different at the way we see our customer: no success.
If your customer proposition changes completely, you draw a new Value Proposition Canvas and Business Model canvas to support that reality, not changing IT does not make a lot of sense. The new VPC and BMC pretty much prescribe the future capabilities you need from IT to make it work. Having a separate, almost isolated transformation roadmap for IT is a clear indicator for future failure. Or future challenges if you are in the US.
This week I had two nice customer meetings along those lines. One customer has asked us to build new Machine Learning (ML) based solutions to solve real business problems they could not solve before.
With our standard Trifork approach to do ML well (feel free, get a copy) we are on the way to make some really cool dents in their universe. ROI under 6 months, not to bad.
Part of our ML approach is step 3: you need to integrate the new ML solution in your current software, process, or create new software.Only if the solution is being used it can create value, if not, it is only a nice academical exercise.
As the integration was the bottleneck, did not fit in their IT roadmap, technical debt stories and all, we create new software to use the new ML solution. Fastest way to production, fastest way to business value.
And still one wonders: why are there 2 transformation roadmaps, one for business and one for IT, and why is it that never the 2 shall meet. Applying old IT wisdom in a new world where we need an almost agile approach to strategy in a digital world, old IT approaches simply not work. Best way to make IT even more irrelevant is to stick ITIL V3 with just 3 processes sort of done. Or ask for a budget of 3 times the yearly profit just for solving IT technical debt.
The other customer has different but similar issues. The digital transformation roadmap started as a nice to have, then over the last years the realisation kicked in that in order to ensure corporate continuity the digital transformation has to be strategic. So how do you turn an academic project into a strategic transformation roadmap? Cool question, rather important it seems, so cool to be able to contribute to that problem.
Visiting California to listen to platform stories from Unicorns is nice, and good for your tan. Translating that back to the real world of existing companies is the problem to be solved. I love this problem I labeled raising Duocorns (not in the urban dictionary sense of the word).
We are not in a greenfield, we need to keep the company afloat while transforming. What they call at Boeing: change engines mid flight. That is the problem I am working on with the Digital Transformation Canvas with my partner in crime. All the new tech needs to be part of a new customer centric business model. With only 1 transformation roadmap. We use our spare time on top of our day job to create that approach. It very much helps us in our day jobs, cool form of synergy. A transformation approach that helps existing companies cope with the need for transformation in a digital world. While making money. Without going bust. I believe in raising Duocorns.
