Paul Boag: Digital Adaptation – summary

Paul Boag outlines how to adapt your organisation to meet the challenges presented by digital, in the excellent Digital Adaptation. Further resources are available on the Digital Adaptation website.

User expectations are set by industry leaders

“You may not be in direct competition with Twitter, Google, or even MailChimp, but users will expect the same ease of use that they have been given on those platforms.”
“You are not just up against your competitors, you are competing with the user experience of every digital player out there.”

If you don’t change to meet evolving user expectations, a competitor will appear and render you irrelevant

Napster changed users’ expectations of how they could consume music. People now expected cheap, fast (digital and on-demand) music, focused on tracks not albums.

“The music industry fought hard to have Napster closed down, but the damage was done. User expectations had changed and there was no going back… Instead of adapting to this change in user expectations, the industry failed to act.”

Between 2000 and 2010, record store sales fell by 76%. HMV and Tower Records “crumbled.”
Apple created iTunes and delivered what people wanted. “The music industry lost an unprecedented opportunity because of its failure to adapt to the changing landscape.”

Similarly, Blockbuster had numerous opportunities to purchase Netflix for as little as $50 million. But Blockbuster didn’t accept that customers didn’t want to visit a physical store. By the time it accepted this and began offering a postal service, Netflix was already transitioning to digital streaming. Once this infrastructure was set up, Netflix’s costs plummeted. Blockbuster, with its physical stores and associated costs, could not compete.

Use digital to help you adapt strategically to a changing environment

“With such a rapid rate of change, creating a three to five year strategy is impossible…
Instead, a digital strategy should help the organization become flexible enough and properly prepared to adapt to new challenges and innovations as they arise. The digital strategy should create a digital team capable of thinking strategically on a daily basis.”

“The web requires fast adaptation and close collaboration of people with very different skills. This means that it is the people working with digital every day who have to make rapid, informed decisions. They can’t wait for senior management’s consent.”

Boag recommends: “Good Strategy/Bad Strategy” by Richard Rumelt. A framework for creating a strategy:

  1. A diagnosis
  2. Guiding principles
  3. Coherent actions

“a responsibility matrix is considerably more effective than a web steering committee”

“Web steering committees are not a bad idea in principle, but in practice they can often significantly slow the agility of an organization in a realm where responsiveness and adaptability are crucial.”

“Important decisions are often delayed until a date can be found for the entire steering committee to meet. The meetings themselves often focus on endless internal discussion, rather than basing decisions on data and user testing. Finally, and probably most significantly, most of the people in the room are not qualified to be making decisions on the subjects being discussed.”

Instead, Boag recommends using a RACI framework, showing who is responsible/accountable/supports/is informed about each area of decision-making:
Responsible: doing the work
Accountable: formally accountable for the success of the work
Consulted: consulted about the work
Informed: told of the outcome

Better collaboration across teams

You don’t need to remove departmental structures – just make the edges of departments “fuzzier”.

“Departments should not be the only structure within an organization; there should also be working groups and other smaller teams that work across these departmental divides. But do not mistake this for more committees. I am not talking about interdepartmental committees. I am talking about real teams made up of people from multiple departments who sit and work together.”

Policies promote good decision-making

Standard sources of conflict experienced by digital teams: homepage space, requests for low-value web content, hostility to removing out-of-date content.

Save time on these arguments by having policies. These are impersonal, and have organisational buy-in.

“Instead of saying no to somebody who wants content on the homepage, you are just implementing a policy. Instead of removing somebody’s content, you are just following the rules. It’s not personal, it’s policy.”

Martha Lane Fox’s strategic review of the UK government’s digital offering, 2012

  • Manage digital centrally. Commission content from departmental experts as required. (“complete reversal of the previous policy”)
  • Focus on user needs and the delivery of online services – not just communicating information.
  • Radically simplify the government’s digital footprint.
  • Move from large technical projects to a more agile, iterative approach based on extensive testing.

Predicted that if the government moved 30% of its interactions with citizens online, they could save more than £1.3 billion.

If the UK government can make radical change, so can your organisation

“If an institution with as much inertia and legacy as the UK government is willing to consider such fundamental cultural change, then it demonstrates that this is possible for the vast majority of organizations.”

Common cultural characteristics of effective digital organisations

  • Collaboration.
  • Agile, iterative development.
  • Digital by default.
  • Innovation.
  • Service-oriented

Generic advantages of digital approaches

  • Cheaper
  • Faster
  • More flexible
  • Easier to monitor
  • More targeted

Senior management need to completely re-evaluate the business in the light of digital

Boag recommends Osterwalder’s Business Model Canvas as a tool to achieve this. Explore the following areas:

  1. Customer segments.
  2. Who are your customers, and can digital help you better understand them?
    Could you personalise your offering?
    Could you serve niche audiences that were previously not cost-effective?
    Could digital help you broaden your customer base?

  3. Channels.
  4. Can you deliver your offering through new channels?
    Could you move to a purely digital offering?
    Can digital enhance existing channels – by making them faster, more efficient or cost-effective?

  5. Customer relationships.
  6. What expectations do different customer segments have of you, and could digital help you surpass these?
    Could digital help your manage customer relationships more cheaply?
    Could you transition from telephone support to self-service?
    Could customer service be automated?
    Could you build online communities where customers support each other?
    Could you use digital to enable customers to take a more active role in evolving your products or services?

  7. Value proposition.
  8. What problems does your organisation solve? What needs are you satisfying?
    Could digital help you make your offering more valuable?
    Could digital allow you to solve new problems for your customers?

  9. Revenue streams
  10. Could you collect revenue more efficiently, and more easily for customers, using digital payment?
    Could you introduce new revenue streams, e.g. a subscription model?

  11. Key resources
  12. What are the foundational resources for delivering your offering?
    Could digital be used to replace these or lower their costs?
    e.g. do retailers need physical store fronts?

  13. Key activities
  14. What are the foundational activities required to deliver your offering?
    Could digital streamline these, or even automate them? (e.g. automated dispatch management of ecommerce orders)

  15. Key partners
  16. Who are your key partners or suppliers?
    Could digital tools help you manage them, or even replace them? e.g. self-publishing.

  17. Cost structures.
  18. What are the most important costs associated with your business model?
    Could digital lower these costs?
    e.g. lowering distribution or customer acquisition/retention or stock management costs.

    Looking at competitor organisations during this process can help motivate senior managers.

Embrace failure as integral to improvement

“we need to see failure as a necessary step towards success. Only by failing do we understand what success looks like.”

“In an industry so young and dynamic, the only way to innovate, the only way to progress, is to experiment and that will inevitably mean failure. We need to nurture a culture where failure is acceptable and, in fact, expected.”

“You might think that building something that fails is a waste of time and money. That is true if huge amounts of both have been sunk into its development. However, if you are working within an iterative process, centered around rapid prototyping this will not be the case.”

Test your assumptions by building something and seeing if it works. If it doesn’t, you can learn and improve.
If you have competing ideas, you can test them against each other at prototype stage. This de-politicises decisions, and helps organisations make decisions based on evidence.

Allow staff some time to explore new ideas, and create a culture in which new ideas can be expressed and valued.

Unless you are solely competing on price, you need to embrace customer-centricity

Marketing departments are still focused on broadcasting to mass audiences with mass media, rather than focusing on connections.

“One step in the right direction would be to make user testing a permanent and ongoing feature of your company’s culture.”

Twitter have an ongoing programme of usability testing that is open to anyone.
“user testing is not a periodic event confined to a small team, but an ongoing company-wide policy.”

In “Rocket Surgery Made Easy”, Steve Krug recommends a rolling programme of monthly testing.

How to get the most out of your digital team

“The most important factor is to give your digital team the freedom to do its job and set its own direction. This is a new and very light form of leadership based on respect rather than authority. It means relinquishing control and allowing people to direct their own roles.
I am not suggesting staff should be given the freedom employees of Valve or GitHub have. Although this might ultimately be beneficial to both employee and organization, it requires such profound organizational change that it is beyond the reach of most companies.”

The Harvard Business Review advises that “Senior leaders need to get used to the idea of abandoning absolute control”

“digital workers… need to see the reason for management decisions. It is not enough to tell them how things are going to be; they need to understand why a direction has been chosen.”

Your digital team needs the right tools

“You wouldn’t expect a professional tradesman to work with the same DIY tools we buy from B&Q, so why do so many companies insist that their digital teams use the same technology as the rest of the organization? What some perceive as luxuries such as smartphones, high-end computers, and tablets, are in fact tools of the trade for a digital professional. They shouldn’t have to fight to get these tools, they should just be provided.”

The knowledge of your digital team is their biggest asset. You need to actively invest in growing this

“you need knowledge. You need experts in creating digital solutions. They are your most valuable asset.”

Give staff the time and opportunity to continually strengthen and update their skills.
Digital professionals are motivated to do this – you just need to give them the time to learn and experiment, and to meet with peers.

Traditional project management approaches don’t work well in digital

Digital projects are so complex that traditional project management approaches struggle to scale.

For example, “It can prove nearly impossible to accurately specify large web projects due to the huge number of variables and complexities.”

Incremental change is better than big projects

Monitor user behavior to identify problems, prioritise areas for action (based on value of fixing and ease/cost of fixing), invest in a small incremental improvement, test and iterate, then go live. This reduces the risk of failure.

“This significantly reduces the amount of planning required and acknowledges the uncertainty inherent in running any large website.”

“The idea is to establish a rhythm of building, measuring, learning, and improving so that the site naturally evolves over time.”

Focus development work on user needs, not stakeholder requests

Any development work should be based on a user need, and to serve a defined persona.
“These personas need organization-wide approval and they become the bedrock on which your applications are built. Only tasks that meet the needs of these personas should be considered, and no task should be built that prevents a persona from completing one of their key tasks. They act as a filter for deciding which user stories will be accepted into the backlog of work to be developed.”

Tips for building grassroots change

Support each other, to build a safe and fun environment where you have the support of your team to take some initiative.

Try implementing small improvements to how you work. This will build your confidence and get management used to the idea. Don’t ask for permission – just make the change. Have a clear rationale ready in case you’re challenged. This should be focused on how it benefits the organisation.

Always educate and build bridges. So don’t just say “no” to requests.
Make sure you aren’t seen as a blockage that needs to be worked around.
Help colleagues think through alternatives – focus on their underlying need, rather than on the particular approach they’ve advocated.

Educate colleagues:

  1. Highlight best practice. (Competitor examples are particularly effective)
  2. Destroy preconceptions, using evidence. (e.g. any weird beliefs that people have)
  3. Promote your successes. Explain why things worked – builds the credibility of your team, and the organisation’s understanding.
  4. Explain failures. Explain why they happened and discuss how they could be avoided in future. Build a culture that embraces failure.

Senior management

“Getting frustrated with them will not help, but learning more about them will.”

Understand their objectives/targets and needs.

Focus on:

  • topics that they are interested in
  • their broader objectives and targets
  • return on investment
  • threats

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