July 29, 2019
July 29, 2019
In my role looking after enterprise strategy for Amazon Web Services (AWS), I employ a team of former chief information officers to help large enterprise customers with their cloud adoption strategies. There are a number reasons why so many enterprises are moving to the cloud, including cost savings and improved performance and reliability, but more often the reasons motivating a move to the cloud include the business’s need for greater speed and agility to help accelerate their digital transformation efforts.
Many enterprises are stuck in what we call a “low-frequency” mode of operating—or an environment where any change involves risk, introduces instability, and requires a lot of effort, ultimately leading the enterprise to move at a slower pace. This is opposed to “high-frequency” enterprises that have achieved a rapid pace of change and reduced risk, where the focus is on frequent value delivery rather than ensuring change does not disrupt operations. In my team’s new eBook, Tuning Up the High Frequency Enterprise, we discuss what the C-suite and board should know about the idea of moving from an organization operating at low-frequency to one of high-frequency.
Why are so many enterprises stuck in low-frequency mode? Boards should understand that low-frequency digital operations are typically due to a mountain of technical debt within the company’s information technology practices. The debt could have been piled on or caused by years of accrued workarounds and shortcuts for issues in existing systems and applications that were never addressed. This debt is compounded by outdated models of security, risk, and compliance that fail to build in processes meant to discover performance issues or vulnerabilities early in the development process when they are less costly to resolve.
Another reason why low-frequency operation models persist is that when the digital leaders of an enterprise develop a new vision and objectives, that vision and grand roadmap too often are expected to be matched with what we like to call “big execution” in information technology. Before any team writes a single line of code, months are spent by executives, managers, and project managers in intricate planning, trying to map out every step of development and product delivery along the way in advance. The problem is that in this mode projects tend to grow larger and more unwieldy, with the scope expanding as more and more requirements are added in by a broader set of stakeholders.
Taking this approach means months or years can go by before anything is put in the hands of the customer. It can also mean that the project is completed without any periodic validation that it actually achieves the original objectives of the grand vision or strategy. As a result, boards will likely have a more difficult time gaining visibility into the actual progress of these large, low-frequency investments, and assessing whether or not they pose a risk to the future growth and health of the enterprise.
On the other hand, becoming a high-frequency enterprise means that the company’s leaders are guiding it towards being an organization where technology is a true enabler of continuous improvement and business value generation. Operating in high-frequency mode means your company’s digital leaders and teams can make changes to products, systems, and applications at the quick pace your business’s strategy requires and at the speed that your customers demand.
How does our team know this works? We have worked with thousands of the largest enterprises globally, and our team is comprised of experts that have led our own digital transformation efforts at companies like Coca-Cola Co., Capital One Financial Corp., and the Department of Homeland Security. Through this work our team has identified seven of the most common strategic shifts needed to get out of this low-frequency mode. Enterprises must identify the rigid and slow-moving anti-patterns holding them back and work to develop new behaviors. The board and the innovation and technology committee can play an active role in this process by working with its technology leadership at the C-suite level to drive an assessment of their current state relative to these patterns, and can suggest that the company prioritize these strategic shifts towards becoming better, high-frequency practitioners of digital transformation.
As board members, your role is of course to look beyond the technology. It’s important to recognize that a mindset shift is usually required to move the business into high-frequency mode. Leaders need to set the agenda, and role model the new patterns for their teams. Change is a fluid journey that requires building a continuous learning culture, constantly refactoring your systems, and always working to reduce your time to delivery. I hope the guidance provided here and in our eBook can help your board understand the enterprise patterns that will speed your digital transformation strategy to success.
Philip Potloff is head of enterprise strategy at Amazon Web Services (AWS).