Here is a collection of digital transformation books from a technology, product, organisation and strategic perspective. One of the great fallacies of digital transformation initiatives is that it is the preserve of the technical function, be it the CIO or the CTO’s remit.
A truly successful digital initiative requires the mobilisation of the entire business. These books explain both the how and why, including highlighting any pitfalls.
Note, this post collates reviews from two previously published posts for convenience.
The Invincible Company
Alex Osterwalder, Yves Pigneur, Fred Etiemble, Alan Smith
From the creators of the Business Model Canvas, comes the Invincible Company, a beautifully-curated journey through how the principles introduced in Business Model Generation can be applied at a company level. It describes the dynamics between what the authors call the Explore and Exploit Portfolios. The former includes the entrepreneurial and often speculative activities aimed at discovering and establishing the products and business models that will drive future profits. The Exploit portfolio, on the other hand, is focused on driving today’s profits.
Although the authors are at pains to emphasise that invincible companies must master both portfolios, it is clear that their heart is in the innovation funnel and on the key building blocks of fostering an innovation culture. Nevertheless, they propose a set of practical tools for selecting and managing innovation portfolios as well as for tracking their performance.
It is however worth buying this book for what its ‘Pattern Library’, or case studies. These range from the done-to-death (e.g. iPhone App Store) to the should know more about (e.g. FujiFilms’s foray into cosmetics). This is probably the most compelling collection of strategy and business model case studies I have seen in a single place and covers all sorts of scenarios, from creating platforms, rearchitecting cost structures to transforming and shifting business models. The disrupted and the disruptor are both considered. You will be hard-pressed to find a ‘pattern’, or indeed a collection of them, that will not in some way resonate. And in the unlikely case that they don’t, the quality of the artwork and graphics will still make this a satisfying purchase.
The Design Thinking Playbook
Michael Lewrick, Patrick Link, Larry Leifer
As can be expected from a book with ‘design’ in the title, the Design Thinking Playbook is richly-illustrated, full of diagrams that stylistically would not look out of place in a kids’ reading book. The book, which follows on research in the area at Stanford University, aims to provide a set of tools to allow businesses to take a more user-centric and problem-oriented approach to coming up with and executing on new ideas.
As such, the book certainly does not lack toolkits. Many of these are not original, but are influenced, or indeed, adopted wholesale from other sources. Hence we re-acquainted with the business model canvas, the lean start-up cycle, scrum, the Spotify development model, mindfulness, the double diamond, systems thinking and more. All these make their way into the Design Thinking Playbook. While many business books are criticised for endlessly repeating a single new concept, this book is perhaps guilty of the opposite, throwing in so many ideas that at times the narrative arc can be difficult to discern.
Nevertheless, this is a small criticism for what is effectively a crusade at bringing the needs of the user to the heart of what a truly digital company must do and be. The key theme is that multiple perspectives and multidisciplinary approaches are needed as a company moves away from linear systems (e.g. supply chains and innovation funnels) to more chaotic and interlinked systems which should be addressed by marrying the rationality and logic of a systems thinker with the intuition and emotion of a design thinker.
Accelerate!
John Kotter
From a book that brings too many concepts, to one that focuses on a single one – namely how to operate large organisations at speed. In Accelerate! John Kotter argues, quite convincingly, that the hierarchical structures and organisational setups that form the foundation of modern corporations fundamentally fossilise a solution for a given market or problem. What they don’t do half as well is to drive successful change initiatives or deal with rapid change.
The solution according to Kotter is to set up companies with a dual organisation structure. Kotter suggests to complement the existing hierarchy with a loose ‘strategy’ network that is organised in the amorphous way typical of a startup, but is crucially set up to be the equal of the hierarchy. While a number of people will be in both systems, most leaders and team members will be a member of one or the other. In time, businesses created by the network will be absorbed into the hierarchy.
The key insight provided by Kotter, is that as companies grow (or as the jargon goes, ‘scale’), the very mechanisms put in place to coordinate the growing organisation prevent it to flex or change. Kotter therefore advocates that the company maintains a start-up like structure reporting to the CEO or executive board. While I have not seen many examples of this kind of permanent dual organisation, the principle remains valid.
Where Kotter is more compelling, is in his recipe for accelerating change. Kotter describes eight accelerators from building and maintaining a coalition to celebrating short-term wins. None of the eight accelerators are in themselves particularly novel, and any change practitioner is likely to be using them to some extent or other. What is effective however is the central theme – creating a sense of urgency around a single big opportunity. Without urgency, there is no need for speed. Without the need for speed, there is no need for the network. This is, in my opinion, the key theme of this book. Urgency is a strong emotional force that can be channelled to drive change.
Reinventing the Product
Eric Schaeffer and David Sovie
I must admit that I nearly did not buy this book on reading that the authors worked for one of the best-known management consultancies around. I have seen enough transformation models being pitched by consultancies as their bullet-proof to help you transform your business. Or, as the cynic would put it, tell you what you already know.
This book was however a pleasant surprise. Neither shallow, nor stating the obvious, it describes how ‘digital’ is transforming our understanding of what a product is, shifting from a one-off purchase to a series of interactions and purchases. It is only by implementing very fundamental changes to the way a company is organised and operates, that an existing company can hope to operate in what is a very different space. The authors focus on how products evolve over an ‘intelligence’ continuum, becoming more connected and autonomous, while at the same time, the experience also becomes more engaging as business models shift to a ‘something as a service’ model.
Many of the examples are drawn from the automotive industry, where I can see first-hand the challenges of shifting from making cars, the most expensive products most of us will ever buy, to a mix of product and service business models. Unsurprisingly, Tesla is the authors’ darling – the closest an automotive company gets to the digital ideal.
One of the strengths of this book is its authors’ clear experience in dealing with large traditional companies, understanding their pain points, and the difficulties that must be overcome. The authors propose the ‘pivotal’ capabilities that need to be mastered, including, unsurprisingly, ‘large scale agile development’ through to ‘as a service’ competencies and a customer-centric organisation. This is complemented by a practical roadmap of steps towards getting the business to one of a number of sustainable end-states.
As a one-stop guide to how to navigate the transition from a product company to a digital company, this is undoubtedly one of the best guides around.
Flow
Fin Goulding and Haydn Shaughnessy
The final book in this collection is yet another landscape-format book, clearly being the orientation of choice for design thinkers and agilists. I must admit that I bought this book on the merits of its title alone. The concept of flow, so crucial to lean manufacturing and lean thinking, is my personal analogy of choice. Just as naturally balanced manufacturing system prevents the build-up of material or parts anywhere in the system, the same is true for software development. Unbalanced teams are constrained by their slowest subsystem, the challenge being simply that a backlog of user stories to be implemented by a team is less visible than a pile of parts on a factory floor.
The authors are clearly trying to pitch this book as an agile manifesto for enterprises and their IT departments, directly drawing out comparisons to the use of lean start-up in large organisations and agile principles. As this is a book aimed at taking start-up culture into the enterprise, unsurprisingly, a lot of the emphasis is on scaling, and in this regards, the similarities to the Scaled Agile Framework (SAFe) cannot go unnoticed. There is however a lot to like in this book.
The authors clearly know how to adapt the working practices, job types, design focus, funky team names and customer orientation, from start-ups into corporate IT departments, and the intent does at times seem to be aimed at making ‘square’ executives feel cool. The methodology is anchored on the use of a large number of Post-It covered ‘walls’ ranging from the Customer Wall through the Projects-In-Play Wall to the Jobs Wall. This ties into the book’s core concept – in order to maximise flow, you need to make work visible. This relentless focus on creating visibility of digital work is what binds the concepts together. As people increasingly work from home, the challenge is ensuring that ‘digital’ walls can be as effective as physical ones.
The Digital Transformation Playbook
David Rogers
For those wondering the relevance of digital strategies to their roles, and particularly for those execs who believe that digital disruption has no part to play in their industry or function, The Digital Transformation Playbook is a must-read. As is to be expected by a faculty member at Columbia Business School, the theoretical underpinnings of the book are impeccable. Of particular interest is a re-framing of disruption theory that is more relevant to consumer products. Rogers distinguishes between disruption to a company’s offering and to its operations, or what he calls a value network. Digital platforms and technologies have the potential to severely disrupt both of these. The book is rich in case studies, from the well-known (e.g. Netflix) to the less well understood (e.g. Warby Parker).
As befits a book strong on digital economics, much emphasis is placed on platform theory and the changes in business models that have emerged over the past ten years. The underlying drivers of platforms – their inherent scalability, the value they provide to both service providers and consumers and “winner takes all” economics of platforms such as Google and Facebook are explored in detail. Importantly the book highlights the shift in thinking from value chains (relevant in the physical world) to value networks (in the digital world).
Additionally, few people will have missed the claims about data being “the new oil” or “a company’s most valuable asset”, but in many cases may fail to grasp what it means in their specific industry or company. One of the invaluable contributions of this book is to provide practical means for understanding how to treat data as an asset, and the various ways in which it can be used not only to provide value to your company but to provide the underpinnings of a digital transformation programme.
Given the breadth, scope and credibility of this book, miss this at your peril.
The Lean Startup
Eric Ries
As much as a manifesto as a book, this book fired the starting gun that really kicked off lean development practices. Although focused on Ries’ experience in running startups, the approaches popularised in this book have found their way into product development organisations and tech companies large and small. Although agile practices barely get a mention, the genius of this book was to show the symbiosis that exists between agile software development and an iterative, experimental approach to finding the best product-market fit. As such, this approach was ideally suited not only to startups but also to companies of any size dealing with the uncertainty brought by disruption and rapid technology changes.
Terms like “to pivot”, and “minimum viable product”, which will go on to be abused by managers were first popularised in this book. However, Ries’ most significant contribution has been the embedding of the iterative Build – Measure – Learn cycle, which when coupled with agile processes, has become the bedrock of modern product development. Although Ries went on to write a follow-up, The Lean Startup remains the mandatory starting point for anyone seeking on embarking on a tech transformation journey.
The Lean Enterprise
Jez Humble, Joanne Molesky and Barry O’Reilly
As the Lean Startup Movement drew many disciples amongst tech startups, scepticism remained as to how relevant the approach was to large enterprises, which operate with thousands of employees, complex programmes spread across the world and annual budgeting cycles. Not only does The Lean Enterprise put to bed any doubt that lean development principles can scale for use in large companies, but it also makes the compelling case that Lean Development is indeed the only way large companies can compete when faced with disruptors.
While this book does not bring in any radically new approaches, it shows how lean startup principles, the business model canvas, agile development, continuous integration and deployment can all work symbiotically. Emphasis is put on the concept of flow, demonstrating the similarities between intangible work such as software development and physical goods being manufactured in a factory. The same techniques that can reduce work-in-progress and backlog of work in a factory have applicability in the world of software development.
Often ignored, a company’s financial management processes can make or break a digital transformation project. The authors make the compelling case of separating programme financial budgeting from annual budgeting cycles and provide some practical examples for how to prioritise and fund innovation projects. Equally important is the interrelation between organisational structure and culture and the architecture of products they create, and it is no surprise that the authors are big fans of cross-functional teams.
The DevOps Handbook –
Gene Kim, Jez Humble, Patrick Debois & John Willis
It is safe to say that agile has well and truly eaten the world. There are very few software teams that do not subscribe to some form of agile development practices. Equally important, but perhaps, less well understood is the concept of DevOps, the bringing together of development and operations teams together to increase the speed of development and the quality of products created. For decades, development and operations have operated as very distinct silos, with different objectives, metrics and cultures, often sitting in distinct companies. The DevOps approach is to bring product, development, test and operations teams together with the aim of creating more cohesive company cultures and more resilient products.
Like in Lean Enterprise, the DevOps Handbook lays into the inefficiencies and corrosive cultures that are inherent to organisations built around functional ‘silos’. The antidote, naturally is an organisation built around cross-functional teams focused on achieving market or product outcomes. Equally important is the technical architecture adopted. The authors are great fans of loosely-coupled software architectures where services are largely independent of each other, communicate via standard APIs, which allows them to be updated and deployed into production with no impact upon other parts of the system.
The loose coupling described above is one half of the equation that leads to fast deployment of software. The other half is to ‘automate everything’. From building and configuring environments through automating testing at all stages, onto monitoring live systems, manual procedures should ideally be banished from all stages of the software creation process. When all these practices are brought successfully together, software release becomes a low-risk, almost mundane activity, which hopefully banishes for good the stress associated with large high-risk, big-bang software deployments.
Architecting for Scale
Lee Atchison
You may create the most compelling, ground-breaking tech product, but it will not be worth much if your users cannot access it. Without service availability, not only will your users be unable to access your products, but you will likely suffer severe reputational damage. Think about recent outages to mobile operator O2 and British Airways. Not only did they result in multi-million-pound bills, but the companies are still suffering the impact to their reputation. Moreover, many systems start suffering just as they hit growth – failing to cope with the increasing demands being placed on them. Twitter’s ‘fail whale’ is probably one of the best examples of this. Architecting for Scale addresses the twin topics of scalability and resilience, arguing that these need to be built in from the outset, rather than being bolted on as an afterthought.
The book addresses both the management practices as well as technical tools required to create and operate high-availability services. At the heart of the book is the importance of designing systems with failure in mind. Whilst second-nature to engineers working in the physical world, failure analysis is often overlooked in purely digital operations. This is something that the new kid on the block can learn from some of the so-called traditional engineering industries.
Structured approaches to risk management and mitigation are presented as well as how to structure service tiers and service level agreements. On the technical side, the authors sensibly assume that most of their readers will be interested in using public cloud infrastructures such as AWS. Once again, microservices-based architectures are championed. The book provides an overview of the benefits of distributing functionality for resilience as well as a brief exploration of serverless technologies. While this is a fairly concise book, it provides a well-rounded starting point for exploring the importance of good architecture