Our new podcast, The Art of Digital Disruption, will offer you an opportunity to listen in on fun and casual but in-depth conversations focusing on digital innovation and leading in the intangible economy.
We’ll tackle topics related to the scientific art of disruption – AI and Machine Learning, DevOps, IoT, and the Cloud – pulling trending topics from the news and discussing them with experts and influencers.
In our inaugural show, Steven Borg (VP of Innovation at 10th Magnitude) and Alex Brown (CEO of 10th Magnitude) discuss digital innovation, the agility quadrant, and how organizations can truly transform.
Companies need to move ever faster to respond to changes in the marketplace in order to lead, innovate, and disrupt. So, how will an organization transform? What does it take to get to a state where you can move quickly, innovate rapidly and respond to changes in a marketplace?
That’s what today’s show is all about…
Episode 1 – The Agility Quadrant with Alex Brown
Steven Borg: Welcome, I’m Steven Borg, the VP of Innovation at 10th Magnitude. Today, in this inaugural podcast I’m joined by Alex Brown, the CEO also here at 10th Magnitude. We just finished a four-city roadshow where we talked to a group of executives in a roundtable format on topics ranging from innovation to digital disruption. Overwhelmingly, the sentiment from those executives was that in the future, in the very near future if not now, they need to be able to move much faster than they currently are, they need to be able to respond to changes in the marketplace, to changes in regulation, to changes in technology ever faster and most importantly, faster than their competitors. I asked Alex to join and talk a little bit about digital innovation and how companies can achieve speed in the marketplace. Alex, quick introduction if you don’t mind.
Alex Brown: Sure Steve. Thanks, I’m pleased to be here. I’m Alex Brown, I’m the CEO here at 10th Magnitude. We’ve been for the last eight years working with organizations across the globe to help them kind of improve how they’re thinking about agility and innovation within their organizations, how they’re deploying cloud technology to support that mission.
Steven Borg: It’s pretty impressive some of the things that we discovered in talking with these executives, a lot of CTOs, a lot of CIOs, a few CEOs as well. It seems like they’re getting a lot of pressure to innovate to… I’m air quoting here, digitally transform.
Alex Brown: Yeah, it was fascinating as you said. We had a really broad cross-section of executives there. I was particularly intrigued by a number of the kind of older line organizations that were there, companies that are 40, 50, 60 years old, they’ve been very successful and they perhaps more acutely than anyone else are feeling the pressure to move very rapidly now and achieve this new kind of digital disruption posture. We had one CIO kind of reflected a conversation he’d had with his CEO who had just joined the organization who basically gave him the task that in two years the CEO expected to see a completely different organization. This is a company that had been doing billions of dollars of business for decades and boy, are they feeling the heat, it was just fascinating.
Steven Borg: It’s an interesting thing, there’s a lot of need to respond quickly. The disruption is really … No one wants to be Ubered.
Alex Brown: Yes.
Steven Borg: No one wants to be Ubered or Netflixed or whatever is the-
Alex Brown: The flavor du jour.
Steven Borg: The flavor du jour.
Alex Brown: Absolutely.
Steven Borg: Exactly. If we’re looking at a company, pick that company who needs to transform in two years or needs to be completely different, what does it take to get them to a state where they can move quickly, innovate rapidly and respond to changes in a marketplace?
Alex Brown: It’s interesting. I had a very different answer to this question three or four years ago than I do today. What we have seen and observed as we’ve been working with organizations to support this mission over the last several years is there are two primary axes that they need to execute against to improve if they’re going to achieve this mantel of digital disruptor. You described this kind of quadrant concept. If you think about the quadrant, there are two primary views. On the Y-axis, from top to bottom, is this concept of how do they improve their technical agility, their ability to execute technical tasks, roll out new capabilities, flex capacity, drive additional capabilities very rapidly. How do you improve your technical agility, so 10th Magnitude for eight years has been really focused on helping customers achieve higher levels of digital agility through deploying cloud technology, which is inherently rapid to deploy, rapid to change.
Alex Brown: The second and equally important piece is how does the organizational agility improve so that as you can deploy technology more rapidly so the organization knows how to respond and make use of that. That is perhaps frankly actually the harder of the two to solve and I think it oftentimes takes a little bit more time. I’ve often in my career kind of gone reflexively back to the old adage technology is simple, people are hard. We can deploy and improve the way the cloud gives the ability to people to deploy new technical capabilities, but if the people aren’t ready to do it, you only get a portion of the benefit. We found we have to help organizations execute against both of those tasks, sometimes concurrently, sometimes sequentially, but as you improve both your technical and your organizational agility, you move up the curve and get higher and higher up the digital disruptor curve.
Steven Borg: I think that’s a really good visual and for folks that are listening, that quadrant, that technical agility and organizational agility along those axes, there’s a lot of different ways we can move up from the lower left, which might be your laggards or kind of your traditional industries all the way up to your disruptors.
Alex Brown: I think that’s a great point. I think what we have found is there is no one path to moving up the curve and going from the lower left-hand laggard quadrant to upper right-hand disruptor quadrant. Different organizations consume and absorb this change differently. We are very aware of this as we begin to talk to a new customer, making sure we are understanding their goals and objectives, but also how does their organization behave? What are the cultural values that are very important to them? What are the organizational values that are very important to them so we can support the journey in the way that makes the most sense for that organization? There is definitely not a one size fits all prescription for this and I would… I’ve seen organizations want to believe there is and it oftentimes kind of gets in the way of kind of getting enough of an open mind to support the right prescription and the right approach for the specific needs of your organization.
Steven Borg: That’s been my experience as well. A lot of companies think they can move really fast on that technical axes, but they can’t. They’re moving along the organizational axes, but they might have an agile roll out or some type of scrum in place for their software delivery teams and in the equivalent, Kanban or something for their other delivery teams. But then they’re unable to have that technical agility to move fast enough to scale, to collapse, to continuously delivery value.
Alex Brown: Absolutely. I think that’s a great point. We’ve also seen kind of the opposite approach where an organization may have a new kind of visionary CEO in place who is driving organization change very effectively and aggressively across the organization. But you know what, if the technical organization has not been through an agile transformation, they’re not familiar with the concepts of scrum, they haven’t adopted any type of continuous type of deployment concepts, it may take the technical organization longer to change, although the rest of the organization, the organization agility piece may be well in hand. Different organizations behave very differently and it really… It’s interesting, the opportunity I believe that it presents to leadership within the organization. I think this is very heavily… More than almost any type of work I’ve been involved in in the past, this is very heavily driven by division from the top and kind of how that is permeating the organization. I think much of this really does start from leadership and how leadership is viewing the need to change and where they believe change needs to happen first.
Steven Borg: I think one of the CEOs of a recent customer said we have to drive it from the top. It’s gotta be a CEO led transformation, which flies in the face of some of the bottom up type agile adoptions that have occurred, but I’m 100 percent behind it.
Alex Brown: Absolutely. It’s interesting, I actually think the two meet very nicely. I think certainly a lot of DevOps transformation and agile transformation has been driven ground up as the development organization sees the need to improve their ability to execute rapidly. I think that just gives you a foundation and a platform so that as the executive leadership function realizes there is a need to change and realize there is a need to become a disruptor, they’ve then got the foundation place to move very quickly. But I think left on its own, the technical organization will do a phenomenally good job of driving to more of an agile delivery state, but until the rest of the organization’s ready to move to a similar state as well, they will struggle to get to that disruptor kind of quadrant.
Steven Borg: I agree. I think it’s a really important drive that people go both directions. I’ve been involved in enterprise-level transformations, lean and agile transformations and in the past, I’ve tried to drive people along the organizational agility axis and really push them there and then bend them up into the technical axis. What I’ve found is that’s an enormously long process, it’s two, three, four, five, six years sometimes for those engagements. When you first talked to me and painted this picture of this quadrant and these ideas and talked about how quickly people can move once they’re in the cloud, once they have the technical agility, I was sold, sold enough that I joined your firm.
Alex Brown: As you and I met and shared some ideas, it became clear to me that the capabilities that 10th Magnitude of two years ago had very… Your kind of world-class capability to drive and improve technical agility could be married with the world-class organization agility capabilities that Northwest Cadence… Your previous firm, your old firm had, if we could figure out how to combine those two to bring together two world-class transformation capabilities, we could in a very impactful manner rapidly drive our customers up both the technical agility and the organization agility axes in a way that neither of us on our own could do. The opportunity I saw was if we can get an organization started along the technical agility journey, that journey very quickly begins to provide some returns in the sense of either some cost savings, some agility improvement and those dividends can be reinvested back into that organization agility effort to drive both forward very aggressively in a way that either on its own would struggle to do. There was really a phenomenal opportunity to take two world-class capabilities, the world-class kind of cloud and technical agility changing capability of 10th Magnitude coupled with the world-class organization agility transformation ability of Northwest Cadence, bring the two together and holy cow do we have now something that I think is quite unique and exceptionally impactful for our customers.
Steven Borg: What I’ve found that’s been such a treat here is that because people have moved to the cloud, that’s part of what we do with our customers is bring them to Azure and once they’re in the cloud, they’re able to very rapidly iterate. That’s starting to imbue that culture of technical agility right into that group, so shoving them across the organizational agility axis has been far easier.
Alex Brown: It becomes easier. It’s interesting because you can also see as you start to work with people and they begin to experience the operational differences of working in the cloud, you can see their thought processes begin to change. All of a sudden things that in a premise world were hard and therefore they approached very gingerly or with some trepidation now all of a sudden they realize wow, that’s easy, I can behave very differently and I can do things I never could before. I think as that perspective changes, you can see that the barriers to changing organizational agility start to get knocked down almost in real time.
Steven Borg: Yes, because they can make those changes, they can pivot on a market and they can try something, and they can try something in seconds or minutes, hours, days, weeks, not weeks, months, years.
Alex Brown: Absolutely. The perceived risk of undertaking any change now collapses, it falls apart because in the old days, any change you wanted to drive required planning and time and lots of people and deploying capital or hardware. In the cloud, it doesn’t need any of that, it requires few people, it requires no capital, so now you can try it. You know what, if it doesn’t work, fine, take it down, pivot your team to the next thing and try again. You can iterate through these changes much more aggressively and with little risk. Now all of a sudden, the risk becomes are you moving fast enough and if you’re not moving fast enough, that’s where all your risk is now. Your risk is no longer around deploying people and capital because you don’t have to do that anymore.
Steven Borg: The fact that you brought it back to speed and where that risk lies lets me tie that right back to those roundtables, the CIOs number one concern and the CTOs that were there was speed. It was how can I respond quickly to the marketplace, I do not want to be left behind.
Alex Brown: It’s interesting because in a similar roundtable setting 10 years ago they wouldn’t have been worried about speed, they would’ve been worried about capital and cap X and how are they going to go free up sufficient budget and resource to execute. You would’ve heard much more of a discussion around how do we prioritize the projects in our list and going through kind of much more granular and painstaking kind of TCO analysis or ROI analysis rather, you don’t hear that any more.
Steven Borg: I didn’t hear that at all, it was all how fast can we move and how do we get there. From your experience, you’ve had experience working with Fortune five companies to Fortune 500 companies to very small companies, what are a couple tips and tricks that our listeners can take away to help get them up to that disruptor quadrant, where would they start, what should they do?
Alex Brown: I think a couple of things, I think now the concept of disruption is something that permeates the entire organization. The most effective C level executives, whether they’re CIOs, CTOs, CEOs, that I see helping to drive this are thinking broadly, they’re thinking across functions, they’re thinking in a multidisciplinary function or framework, so they’re no longer willing to just have an impact within their direct functional silo. The CIOs who are really driving change I think most effectively are effectively partnering with their C level peers and they are no longer content to live within the IT sphere and drive change within IT. That’s number one is you have to think very broadly about this and you have to be able to influence across the entire organization because in order to achieve the disruptor state you need IT and the business functions partnering very effectively together and frankly, more and more what we’re seeing is those walls … Those barriers are really becoming very artificial, they’re really falling. That is, I think point number one.
Alex Brown: I think that the second point I’d have people think about is the need to change your perspective a little bit. Traditionally, a lot of decision making around what initiatives to push ahead have been approached from a perspective of risk management and frankly, to a certain extent, fear-based decision making. If I’m wrong am I going to get fired. Because if you were wrong, you had probably gone and deployed millions of dollars of capital, you tied up months or years worth of people and it would’ve cost a ton if you were wrong, so you needed to make sure you were right, it was a very fear-based approach. You have to flip that on its head now. Now, your most precious commodity is time, it is no longer deploying capital or people because it’s easy, all of this is automated, the ability to change and pivot quickly is kind of inherent in these platforms. Now what you’re investing mostly is time. If you are not investing aggressively enough, the time is going to slip by and you’re going to find competitors moving passed you. I think you have to flip your decision making and realize that the longer you take to think about these things is probably working against you and the quicker you can pivot, try, experiment, learn and move the ball forward is now operating in your favor. You’ve got to really shift the decision-making paradigm.
Steven Borg: Love it. Those are two really good pieces of advice. I want to end on one note, one of the attendees, a CIO mentioned that first-mover advantage is gone, it’s just gone, there’s no such thing anymore because anytime you can build something, someone’s going to be able to come in and replicate that very quickly as long as they’re in that upper right disruptor quadrant.
Alex Brown: That’s the key distinction though, that is a true statement if and only if your competitors are in that disruptor quadrant. If your competitors are not in that disruptor quadrant, first mover advantage is very real because they’re going to struggle to execute at the same pace that you are. If however, you have competitors who are disruptors, you’re right, they will be able to match your changes in real time. Then it really… Your advantage really defaults to your people and your insights and your market knowledge and your ability to innovate. I think it’s a great point and I think we’re seeing this play out now in some legacy industries where let’s face it, most of the competitors are not disruptors, they are old style, risk-based decision making, slow moving and they are I think what we’re seeing.
Alex Brown: We’re seeing in financial services now a lot of these larger organizations are really struggling with how do we compete? And how do we match what is going on with Quicken Loans? which is an inherently… Which has effectively moved themselves up there. A disruptor they move very quickly, they move very aggressively, they can pivot on a dime, they can release new capabilities and new products very quickly. Really tough for some of those organizations that have not effectively moved themselves up the disruption curve.
Steven Borg: Alex, thank you very much.
Alex Brown: Absolutely, it’s been a pleasure.
Steven Borg: Thanks for listening to The Art of Digital Disruption. At 10th Magnitude, we’re proud to create the path for organizations to stay competitive and disrupt their industries reaching new heights in cloud-enabled innovation.