Five tips for large organizations to avoid disaster
Apologies for the alarmist headline. You might think that I’m losing my mind with such an opening message! With everyone relentlessly evangelizing about the need for digital transformation for what seems like an eternity, surely change is already coming or happened? My point is that despite the recognized need for change, maybe even tracked as part of a ‘program’, many organizations don’t appreciate the level of change that’s occurring around them and adapt to this change quick enough to capitalize. For many, without a quick call to action, the results will be akin to having the rug ripped from beneath them. Let me try to give some context relating to my recent exploration of the retail sector and e-commerce as a simple example.
Creating a global retail business in just a few days
A few weeks ago I decided I wanted to learn about drop-shipping. For those not aware, drop-shipping is an order fulfillment method where a business/individual doesn’t keep the products it sells in stock. Instead, the seller purchases inventory as needed from a third party—usually a wholesaler or manufacturer—to fulfill orders.
The biggest difference between drop-shipping and the standard retail model is that the selling merchant doesn’t stock or own inventory—they act as the middleman.
Drop-shipping services (normally SaaS-based) are built for anyone from anywhere to create e-commerce virtual shops and enable anyone to sell and ship products at a global scale. Too good to be true?
In the interest of entrepreneurism (and let me be clear from the outset; my retail expertise is very very basic!), I created a mock brand and niche. I then created a domain name and used a SaaS-based drop-shipping service to create an e-commerce site. This took about 30 minutes. Next, I created a digital shop front based on a standard easy to use (and free) template. This took me no more than a few hours.
Once my basic virtual shop was created, I needed to obtain products. Many of the platforms offer integrated distributor networks. Click, Click Boom! Within 15 minutes of browsing integrations, I had connected with a huge catalogue of products and suppliers with end-to-end fulfillment and over 100,000 products to choose from.
Not happy with 20-30 day lead times? How about an in-country distributor? No problem. A few clicks later, I had integrated a UK-based distributor that would cut last mile delivery lead times to one to two days. What about product reviews and supplier quality? There are integrations to provide insight on this too. How about growth generation and buyer trending analytics – yup no problem – services and integrations for that too. Some free. Within a few days I had a fully functioning business with global reach and all the tools at my fingertips.
Cloud has leveled the playing field
Now don’t get me wrong, there’s still a lot to do. I need to build a brand, my product portfolio and a customer base, but the barriers to entry that retailers used to face – like complexity, cost and speed to market – have been removed by technology. The only limitation is your imagination, ingenuity and passion for your product/service.
I hope at this point you’re as impressed as I was! To build this online business I didn’t need to hire a cross-functional team to develop my application stack. This is what technology can deliver now. Imagine where we will be in three, five or even ten years’ time!? The cloud has provided global scale and capability to individuals and companies of all sizes . This has effectively leveled the playing field and cost of entry for developing new products and services.
If you’re still wondering what all the fuss is about then consider this; China’s Li Jiaqi, a top livestream salesman widely known as the “lipstick brother,” sold $1.9 billion of goods in a 12-hour annual e-commerce shopping festival. That is more than the total revenue for Selfridges & Co in one year. Demand generation of this size and scale would have been difficult to achieve without cloud. Cloud was the key enabler, from the communication and e-commerce platforms, the rapid scale up/scale down of the service with no long-term financial commitment.
Act now to capitalize on new capabilities
Having been a technologist for as long as I care to remember, I accept and embrace that technology industry innovation is constant and the waves of change it brings can be perceived as just swells of a tide. However, cloud has been much more than a metaphorical tide and more of a storm. The successive growth and ripple effect that cloud kickstarted has accelerated and disrupted all industry verticals and its impact on large organizations has been astonishing. Not just in terms of the way in which technology has evolved capabilities, but in so many other ways. For example:
- Teams outside of the IT Dept are able to unlock frictionless consumption of cutting-edge tech without the blockers or time constraints that traditional IT used to present.
- Recognition from the business that cloud (and IT) should be perceived as a business value generator, not a cost.
- Traditional technology teams need to adopt a growth mindset and different ways of working.
- Traditional governance and security models are playing catchup with the rapidly evolving threat landscape.
Cloud presents huge opportunities for businesses to develop and test new revenue streams and geographic markets while also enabling the ability to adapt quickly to market change. However, many organizations need to adapt to accelerate growth and innovation in order to capitalize and even survive in this new world.
The Agile Manifesto was written in 2001 (wow!) and books such as The Lean Startup by Eric Ries describe businesses navigating a path to innovation all the way back to 2007. With the advent of mainstream public cloud in 2006, cloud became the catalyst to drive unparalleled levels of innovation. And yet, here we are in 2022 where we’re only just starting to see the impact of this movement across large enterprise, while many smaller companies, start-ups and sole traders become normalized to what the technology has to offer. In order for large organizations to capitalize on what the technology can do to drive business, there is an absolute need for leaner, more agile organizational structures.
The time for large organizations to act is now. They need to accelerate innovation and ideation and believe in their people, encourage them to embrace change, drive experimentation, embrace failure and rip up the waterfall process rulebook (not much to ask, I know!).
As a starting point and without trying to boil the ocean, I’ve listed five key takeaways from the Advisory Team:
Increase your digital quotient & talent density
Leadership teams are the driving force for change. Thinking cloud natively is a necessity. Understanding cloud and its complexities is essential to breaking down silos – not only between tech and business teams, but across the business – ensuring that teams are inspired and entrusted to be a part of a culture for relentless improvement and innovation. Culture eats strategy for breakfast. It’s a cliche but it’s true. Your culture and your people are your business.
Process on top of process? Start again. Think fast flow.
Ashby’s Law implies that the degree of control in a system must be proportional to the amount of variety and complexity within the environment that the system operates in. The environment that businesses operate in is highly varied with many unknowns. As a consequence, traditional organizational processes and budgeting approaches that intertwine throughout the organization do not adapt well to facilitating quick changes in direction. Starting with lean processes, agile frameworks and cloudy operating models can help structure a way forward.
Org change requires org buy-in
Your senior leadership needs to be supporting the movement and this needs to be across the organization. Bottom-up approaches rarely enact the gravitas that is needed to deliver real change, often hindered by bureaucratic red tape and political wrangling. Top-down support, solid communication and overall organization buy-in are mandatory.
Know your customer and recognize value
Moving traditional IT to a product mindset requires a customer-centric approach. Service providers have been doing this for years (some better than others!). Think about your customer’s needs, engage with them, understand their personas. Always think about the value you can provide. Only by developing feedback and listening to your customers will you develop innovation that works for your business. Personas, empathy maps and Amazon’s Working Backwards approach are all good starting points.
Think to the future. Adopt a dynamic strategy. Be bold.
Serverless, citizen developers, less ops over DevOps. Controversial as it might sound, Kubernetes is already the next IaaS in waiting. New and less complex ways of delivering services are being brought to market, constantly making what used to be hard, much easier for the masses. Know these services exist, understand them. Use Wardley Maps to visualize your value chain. Gain situational awareness; understand your value chain and how technology, landscape, and the environment can disrupt your market and lastly, where to invest. Strategy without a constant and iterative cycle of review is a ship with a stuck rudder.
Need advisory expertise?
Cloudreach’s advisory team is here to guide you along your cloud transformation path and help you navigate the impact on people, culture, processes and tech.
Contact Warren Walker for more information.