Digital transformation and technology integration are all the rage. Academics and practitioners alike espouse the inherent need to tackle these challenges sooner in order to assure there is a later. One thing that is missing from the cacophony of voices thrusting digital transformation upon the business public: What is the point? What is the ultimate goal of digital transformation? Is it a more efficient organization? Is it doing more with less? Not exactly. These are admirable ideas but they were the object of the first business technology revolution. Our Kaizen (continuous improvement) mindset should always keep us looking for opportunities to be more efficient. However, the ultimate goal of digital transformation, the El Dorado for which we all constantly strive, is a Frictionless Enterprise.
Efficiency and resource utilization have been, and continue to be business objectives. These goals were the desired outcome of the technological revolution that resulted in Enterprise 1.0. An Enterprise 1.0 company is a technology-enabled organization that maintains many of the silos, outdated procedures, and inflexibility that have been prevalent in business since the early 1900s. In Enterprise 1.0 companies, technology is IT driven, generally as siloed as the rest of the organization, and built to supplement existing policies and procedures that were first defined at a time before digitization significantly lowered the transaction cost of doing business. While this technology did help to create some efficiencies and increase utilization rates, it is often cumbersome, not easy to use, and fails to adapt to changes in business realities.
Enter Enterprise 2.0.
Enterprise 2.0 is by no means a new idea. A result of the Web 2.0 concept (which was coined in 1999), Enterprise 2.0 stresses collaboration, flexibility, and user-driven technology integration. The ultimate goal of this being the absence of friction within the organization. Users have become accustomed to the seamless integration of technology in their personal lives and now want their work to reflect what they know is possible. They want to be able to collaborate effortlessly, find information immediately, and have their tools designed intuitively. While hierarchy, bureaucracy, and compartmentalized information sharing were implemented to make organizations more efficient, the opposite is true. These outmoded concepts create friction on the path to achieving our strategic business objectives. The startups which have eschewed these previously sacrosanct principles have begun to dominate every field in which they endeavor to compete.
Enterprise 2.0 and the Frictionless Enterprise are here to stay. They represent a revolutionary way to do business that is already old-hat in our personal lives. As business leaders, we must embrace the new reality that what we “knew” all along may not be true. It is time to let go of the past best practices and embrace the removal of intracompany barriers, an increase in transparency, and dedicate ourselves not to following an MBA playbook but rather focus on how to best deliver value our customers. This is the only way to achieve a truly Frictionless Enterprise.
Getting started on a project is often the hardest part. When that project is as substantial as enterprise digital transformation, the first step can feel crushing. I sat down with my Inspirant co-founder & CEO Amir Azarbad to ask for his advice on getting transformations off the ground. Here is the video of our interview. A transcript of our conversation is included below.
Meighan Newhouse: Hi, welcome to the first in a series that I think we’re going to call Ask an Unconsultant. My name is Meg Newhouse and I’m here with Amir Azarbad, my friend, co-founder and co-partner at Inspirant Group. And today I’m going to ask him some questions about how to prepare for transformation in 2020.
I thought as we get started in the new year, it might be fun to think about, to reflect on 2019 and to help our clients and others think about what they should plan for in 2020. I know you’ve always talked about the idea of the journey. Maybe you can explain a little bit about what the journey means for folks going through a transformation.
Where do people you know, when they are thinking about where to start–they have all these projects they want to get started on 2020–how do they even wrap their arms around these a hundred projects? How do they get started?
Amir Azarbad: Let’s focus on the transformation journey itself. At most companies, the way these conversations usually go is the CEO comes into the CIO’s office and says, “This technology sucks. We need something new. Let’s go.” And the CIO typically goes to his or her team and starts asking questions like, we need to fix this. What’s the best solution out there? Who do we know in the market? And what that always ends up doing is bringing in the same set of people, the same set of technologies, the same set of conversations that have happened historically. And everyone jumps to, “Let’s invest in a new technology platform. Let’s put a product off the shelf and off we go.” The short answer and simple answer to your question is, “Start with the end in mind.” Don’t jump to the technology. Like we said, don’t jump to the people and the process don’t look at your data.
Ultimately, the question is not what technology ails you or what your people lack in skill sets or what processes you don’t understand, but, “Where do you want to be three years down the road?” And if you start to really map out what three years down the road looks like and five years, and then short term one year and figure out how you measure success, that really starts you in kind of taking that first journey transformation step, if you will, which is ultimately prioritizing the work you want to do versus the shiniest object or the lowest hanging fruit that might not always yield you the best results.
Then you start to do is start to take a look at your majority of processes. And that’s where you should start as your kind of your first step is you have your strategy, you know where you want to go, what the outcome is, and now you take a look at, “What are all the internal business processes across your value chain that will get you to where you want to go?”
And that’s where the real trick with transformation starts. The thing that we’ve seen in the market and the kind of the gotcha–if you will–is that most folks just take existing processes and figure out, “Hey, there’s new technology. We can just start to put it on a solution.” That doesn’t work because you don’t know the process of what you’re trying to transform and you’re not even looking at it. And more importantly–it’s something I know you’re passionate about–is the people side. You haven’t even thought about the impact to your people, both internally, externally. How would that whole organization function in this new world?” Buying a product off the shelf usually is a hard thing to do because what it ends up doing is–you’re trying to take what is proprietary to you and try and plug it into a box and then customize it.
And anytime you start to get in that world, you’re adding a whole different set of costs and et cetera. Why not have your own blank canvas and take your process and build it on there? Most of your processes are probably fixable without any new solutions. It’s just a matter of looking at what people do on a day to day basis. And most organizations don’t spend the time or put in the effort to do that because most organizations and most executives are hand juggling 50 different things at the same time, and it’s really hard to try to convince them to take a step back and really have an in-depth discussion and an observation of a process and try to really think through it.
But once you start to look into your process, once you start to optimize your process, you now have a really good use case for a technology discussion, a people discussion, and a data discussion. But, until you really have a process sort of mapped out, optimized for what you want and how you want to measure based on the strategy, you really shouldn’t jump into that next layer of, “Is my workforce ready for this? Or do we have the right data? And ultimately, what is the technology solution that we’re going to use?”
MN: Well, so I want to go back. I want to think about, you know, I think it’s easy for us as consultants or Unconsultants at, you know, a 20,000-foot level to say, these are the things that you need to do, you know, executive person or manager person, you know. But I think about being in that role, which I know we’ve been in. All of these things coming at you. You said it yourself juggling 50 different things.” I just want to implement the easy solution.” Maybe it’s, “My technology is at end of life and I just need to go to the next version.” Or, “This thing does seven of the 14 things that I want it to do. So that’s good enough for now, cause I got to get it going and get it going.” So. What kind of advice do you have for people to kind of step back and, you know, do you have any experience when you were in that seat, right? Like what? What did you experience when you were trying to get those things pushed in? And the difference between doing that and stepping back and actually being thoughtful and planful about what that looks like.
AA: Yeah, I’m guilty as charged. I actually was that same business executive who was pushing everybody to get things done quickly and not willing to spend time it, and this conversation needs to be split up into sort of a large enterprise discussion organization because there it’s a whole different politics and culture and sort of environment that folks operate in versus the middle small type businesses that are looking to transform.
And so, let’s, let’s focus on the large enterprise. Large enterprises. The directives come from above. Very rarely do you get a chance to sit and look at one process or observe one thing. So, what I would recommend to folks as they start a new journey, it’s to really try to push and pilot and show and demonstrate value in the new way of doing things. Potentially change a process, train a new staff member. Get a new skill set. For some of you folks, it’s show value in a small sort of organic way and let that organically grow, if you will.
MN: I learned that early on. I’ve, I’ve been known to want to boil the ocean or to, you know, big dreams, right? But I’ve had lots of coaching and mentoring in my career to say start small, start with a small pilot and show the success and kind of build that energy at a smaller level and kind of a grassroots, which can be hard to do, I think, in larger organizations, but you can even do that in a large organization. That’s what you’re saying, right? Which you did in a large organization.
AA: At the end of the day, what you’re trying to show is that you have the capability to do something differently. Yeah. What has been traditionally done in the large enterprise organization. That’s really the biggest challenge with transformation in large organizations is trying to take. A new way of thinking, a new way of doing into an organization that is an 800-pound gorilla and doesn’t want to change, and everyone has a role, and everyone wants to sustain their role and go forward. So, transformation in a large organization is a very difficult endeavor for anybody to take on. Well, once you get that going, once you get the transformation started and you get people on board–we always use this analogy for folks–digital transformation in a large enterprise is pushing a boulder up a mountain. It’s, it’s really hard. And you can have as many people trying to push it up there, but that boulder is, is as heavy as it could possibly going up there. There is a tipping point where you get to the top of the mountain and everyone understands the value of transformation, how to do business differently, how do we nimble and agile. And once that Boulder falls on the other side and everyone wants it, your challenge then as an organization is trying to figure out how to slow it down. Cause just as hard as it is to get it started, it’s hard to make sure that you do the right things when you scale and you grow.
So that’s the other side of the house. Enterprises that have already started this transformation undertaking and have accomplished a significant amount of good deliverables, let’s say in 2019 and 2018 as they go into 2020 their focus needs to now shift a little bit more on the governance and the centers of excellence and making sure that the best practices are being enforced.
You need to leverage your credibility to really push everyone to understand the importance of governance, the importance of building people, the importance of just understanding what your processes are and to not have your find yourself in a place in three to five years where you’ve made so many bad decisions–technologically or process and people wise–that now you have this significant digital debt. You really don’t want to lose control of that boulder. Cause if you do in five years, you’re right back to where you were–the solutions don’t make sense, processes are understandable here, people don’t know how to support it. And you’re back to square one.
MN: It sounds like that initial roadmap, that planning, is really essential for people getting started. Right. And then for those who may already be in there if they haven’t had the opportunities sat down, had do that roadmap. Now, might be a good time to do that–think about where they are in that process and you know how to keep it going in the right direction.
AA: There’s also this, this notion that transformation requires agility and it requires a transformation in the way you approach implementation.
MN: You know, the culture will change. The cultural change, the expectations will change, and roles will change. One of the transformations we’re talking about now, the average tenure in this organization is 20 years. You know, so to go from, “Well this has always worked this way.” You know, the, “If it’s not broke, don’t fix it” to ” We’re going to do things differently and more efficient” causes a big change. And people, I get scared when there’s change.
AA: Your people are inherently going to put up roadblocks because they’re worried about their job security. They are like “This is the way we’ve done it. Why are we changing?” And one of the biggest mistakes that enterprises make is ignoring the fact that your people need to have new skillsets, new training, new–sort of–way of doing things, and if you don’t keep them involved, through change management early on through learning opportunities, what you’re going to get is a lot of resistance every step of the way.
So that’s, that’s sort of your large enterprise organization type folks. The smaller middle size businesses, they have a whole different problem. It’s a capital conversation. We’ve seen, in a lot of these organizations, they’re willing to invest in their people. They are nimble and they can move and they enjoy the conversations of looking at processes and all that.
They don’t have old legacy systems that are completely hard to integrate with. What they’re ending up with is, “I know that we need this Excel spreadsheet automated. We know that this access database is not scalable, and we know our workforce is out there and then they need to be mobile and they need to be able to do X, Y, and Z.” Right? There’s all of these sort of usability type discussions, and needs, that are coming up in these small and midsize organizations. Delivery is not an issue. It’s just about capital investment and that make it a lot more difficult for them to transform.
For those folks. I think that the more important part is, is start small. Start, don’t boil the ocean. They’ll go in there and trying to completely overhaul it. But take one use case, take one scenario, build it, take another scenario, build it. And this way you’re spreading the investment out over multi-year sort of plan. But what you’re getting is immediate returns every six to eight weeks.
So, we start with the end in mind. Always, no matter what size organization you are. But the approach of how you get to that end. It’s different for a small midsize company than a large enterprise company.
MN: That’s what I was going to say, I mean, it sounds like the roadmap for anyone really. You just have to be planful about it, but the smaller companies, if it is the capital flow is an issue, then maybe they just choose one. They have to prioritize, which one of these do we want to accomplish first to show the value, to show the worth before we go, and maybe they can only do one or two small projects a year, but at least they’re moving the boulder in the right direction.
AA: I think that the ultimate take away from all of his conversation is that transformation is hard no matter who you are and what you’re trying to do. And every step of the way, it’s important to take a look at where you are on that journey and make sure that you are still going down the right path. Everything aligns back to your roadmap, back to where you where you sort of had that end in mind. And every decision you’re making is focused not just on the technology but on your people and process. And ultimately back to your strategy and where you see yourself in five, three, one year, whatever that roadmap looks like. Cause you can keep investing in technology, keep doing transformation type stuff, see results and everyone can be happy about it. But are you ultimately driving towards being that company that’s unique in the marketplace as a value proposition and you are ahead of your competitors in terms of, what it is that you’re delivering to your customers.
Build your own brand as an executive. Don’t fall into the traditional, “All I need to do is this to be successful at this company.” You try to figure out your own brand and differentiate yourself in that, in the company you work with, then you really end up standing out, getting credibility, and can take on and tackle on bigger challenges going forward versus the same old every year process or same, well, every year deliverable, and this is the way things go, so I need to do the X, Y, and Z.
That usually tends to get you not to be a transformative leader, but more of just sort of the same old leader following the same old steps. Digital transformation needs digital and transformative leaders, if you will.
MN: I am all about new year’s resolutions. I look at the new year as a fresh start. I love starting new. You can look ahead. What did I do last year? Reflect on what you did last year and how you can improve on that. And so I think, you know, this is a really cool conversation to reflect on what 2019 looks like, how we can be planful for 2020 I’d say for leaders who feel overwhelmed, who don’t think they have enough time to sit and plan things out, I think now’s a good time to assess what you spend your time on and see where the focus should be and to make these projects successful going forward.
It can take two years for a new employee to become fully productive. Millennials change jobs every 2.5 years on average. That means you only have each role filled with a fully productive person 36 months every decade. Without proactive action, the chances that your organization will ever have every role filled with a productive employee are astronomically low. The math is simple. Keeping millennial employees on your team will be the only way to survive in the post-boomer economy.
Millennial Shark is a digital native. He has never known a world without the internet; doesn’t remember pagers—let alone pay phones. Knowledge has always been available at a click. They have experienced very little waiting in their lives and aren’t going to develop the patience for it now. They don’t have time for seniority politics. When they feel like they have stalled, they move to another company. Millennial Shark, like his aquatic namesake, has to keep moving to survive, right? Not necessarily but keeping the shark in your pool is going to take some work.
Millennials will move if they feel like they have stalled, but there is a way to keep them on your team. Millennials live in a world that is constantly changing. They came of age during the great recession. They know that the next downturn can happen at any time with no warning. Staying in one role, at one position, for too long means they are not getting the knowledge and experience their peers are getting elsewhere… They aren’t getting that knowledge and experience unless you proactively give it to them.
To keep millennials on your team you have to actively develop their skills and build a culture of learning in your organization. You have to make them feel like they are moving while they are staying in the same place. A corporate university is the most effective way to do that. The best part? Establishing a corporate university program will help your organization achieve its goals while also helping your millennial employees achieve theirs. You are creating better-equipped employees with a common culture and deep knowledge of your organization and strategy while making sure they are gaining the knowledge they need to remain engaged.
Creating a corporate university is not a small endeavor but it is worthwhile. Can you afford to have a less than 100% productive company?
Digital Transformation: Surveys say most companies are doing it. Academics claim that those who don’t are destined for disruption induced failure. The one question no one seems to be able to answer is…what is it? There are many definitions of digital transformation, but all of them seem to miss the essence of what digital transformation really involves. Is it just a fancy new word for “technology integration,” “digitization,” or “digitalization”? Or, is digital transformation something bigger. To get a handle on this concept, I believe a good starting point is to look at a real-life case.
Associated Textbook, Inc., a textbook publishing company, was about to release their first entirely digital book. You could get it on your Mac, PC, Kindle, or Nook, but it would not be available as a paper book. The digital assets were in place. The webstore copy was written and submitted. Everyone at Associated was excited about this strategic direction. Then, on launch day, nothing happened. Quite literally, nothing happened. The book wasn’t listed on the website, which meant no one could purchase it. Associated had an expensive digital asset which was supposed to disrupt an industry and no way to sell it. There was a mad dash to figure out who had dropped the ball. Fingers were pointed. Accusations were made. Everything was checked, and to Associated’s surprise, nothing had been missed. Everyone at Associated was stumped.
Every process at Associated Textbook had been digitized. Technology had been seamlessly integrated into every process. Most importantly, as far as the individual silos were concerned, those processes had been optimized. Every team that would be involved in the distribution of the digital book had been involved in the planning and done everything they needed to do to launch a digital book. Yet, despite all of that, the product launch failed.
Associated was missing was a broader view of how value had been delivered to consumers by the organization previously and how this would change with the new endeavor. Each silo had made sure that the systems they designed got the product from the beginning to the end of their process. Since this book would be entirely digital, the printing operations team wasn’t involved — yet they were the ones who had the answer to the product launch conundrum. The automated system which lists books for sale was tied to the receipt of the order by the printing team. (This check was implemented after an issue years prior when a book was listed in a physical catalog but was ultimately canceled). To ensure this never happened again, books were not listed on the website, until the print order was received. In our scenario, the webstore listing for this groundbreaking digital title was just sitting there waiting for the receipt from the printing team — something that was never going to happen. Associated had technology integration. What they needed was digital transformation.
Technology integration, digitization, or digitalization involve making manual processes automated. Digital transformation asks the questions, “Do our processes and strategy still match the way we deliver value to our customers?”and “Is our process frictionless?” These question can’t be answered in a silo. They require an examination of everything from business strategy to delivery and, most importantly, all of the steps in between. Digital transformation takes a deep dive into what we are doing, how it is getting done, and why we started doing it that way in the first place. Only after this picture is developed can we integrate holistically developed technology to take the enterprise to the next level.
Next week, Inspirant Insights will take a deeper look Enterprise 2.0 and the Frictionless Enterprise. Stay up to date with the most recent Insights by following Inspirant Group on LinkedIn and subscribe to our weekly newsletter at inspirantgrp.com/inspirantinsights.
[Originally published January 2016]
As the health insurance industry completes another successful open enrollment period and the Affordable Care Act enters its third year of implementation, the healthcare business has been fundamentally reshaped. Since World War II the bedrock of the health insurance industry was actuarial calculations that predicted risk. The primary business was focused on employer groups and the business model was based on back-office processing. Today, the industry underwrites retail policies and competes not just on price, but on individual customer service. The strategic and operational implications of this shift are enormous, beneficial, and largely untold.
The need to focus on every single member is critical and difficult but that transformation has started. Significant investments have been made in the industry’s people, customers, and technology. The first dividends are starting to show. Of course, bad press and shrill voices sometimes dominate the tremendous work of thousands of dedicated people across the industry who are targeting — and hitting — the triple aim of better access, improved outcomes, and lower cost. Regulatory and policy changes only started the process. After the compromises are reached and the direction is set, the architects and builders have the massive, groundbreaking job of putting in the systems that do the work.
One might think that there are plenty of examples we could borrow from, companies that manage millions of accounts, but the reality is that we have a higher standard of excellence. Of course it is annoying if an airline messes up your reservation or loses your bag. Or if your credit card mistakenly rejects a charge at the grocery store. Or if a call gets dropped when you have four bars of signal. As consumers we expect convenient, flawless service at low price, or we take our business to a competitor that claims to do a better job.
But in healthcare, those accounts are not just numbers. They are real people looking for real healthcare. They are a parent making sure that their child is properly immunized. A spouse or loved one whose partner was just taken away in an ambulance, or just received a serious diagnosis that will change their lives forever. An adult child of elderly parents who cannot fully manage their affairs anymore. These are real stories, real people, and we have to do a great job making sure they get the services they need and are entitled to by their policies. We stand at the fulcrum of the relationship between our members, our providers, and our service delivery partners. There’s no room for error.
The strategic vision is rooted in data transparency, promotion of healthy behaviors in the day-to-day lives of members, and a “frame off” overhaul of the technology infrastructure. The goal of the transformation is simple: to change the basis of customer interaction away from crisis management to an integrated part of their everyday lives. This is a once-in-a-lifetime challenge, from gathering resources to maintaining intensity, but success and survival in the new age of healthcare requires us to deliver truly leading-edge services to create an integrated ecosystem for members and providers.
There are three elements to a successful transformation: the creation of a real-time data-driven ecosystem; digital automation that helps manage every member across the health continuum, and delivering to the market a suite of robust, reliable, secure, and easy-to-use solutions that engage members in their care, and enable shared decision making between them and their providers.
Of course, there are terrific advances in the technology frameworks, user interfaces, and analysis tools; the goal is to mount the new wheels, not re-invent them. Moreover, there’s been a recent explosion of health-related data from wearable devices — from blood glucometers to step counting — and a plethora of new apps focused on wellbeing. The investment in “big data” technology that aggregates all of these streams together, sometimes using open source components, and sometimes with custom solutions, have to be part of the equation. This wealth of information enables unprecedented insights, and feeds powerful predictive models that allow engagement of our members early so they can lead longer, healthier lives.
Second, the people we insure — from the young invincible to those managing chronic conditions — need to be empowered and engaged in their health. From the delivery of home monitoring tools, to tele-health alternatives for a doctor visit, the industry has to offer a menu of services that empowers members to take better care of their health, where they want to be, when they need the help, and how they want to receive their care.
Finally, the new era of managed care will focus on authentically-shared decision making between the member and their clinical care providers. This requires private and convenient access to accurate data so the provider can authorize services and referrals for members based on their benefit plan. In addition, by providing transparency into the care decision made by the provider to the member, they are empowered to partake in their own care. This brings the ecosystem together, puts the member alongside the provider in the decision making, and lets the insurance companies behind the scenes become a pro-active, constructive partner in care.
This is an exciting time in our industry. These transformations — from regulatory requirements to customer expectations, from advances in medicine to better access to care — are critical to surviving and even thriving in this new consumer-centric environment, and are mostly untold success stories of an industry that has joined the 21st century.