Business management shares a value system forged to solve 20th Century business problems centred on cost, price and marketing. Our century's challenge is all about how to grasp the opportunities presented by digital. This involves rewiring skills, process and organisational structures, but also shedding cultural values that hold us back. The deeply-held attitude that management involves the head and not the hands - and that strategy is a rarer and more valuable commodity than execution - is one of the three interlocked themes of this story; the second is the idea that strategy, planning and investment are more successful as emergent and adaptive practices; the third is the power of changing by making.
Digital creates flux; it’s a world of complex and volatile systems with multiple variables, often producing highly leveraged and unpredictable outcomes - both good and bad. Our preferred way of dealing with the uncertainty involved is to move towards big goals in small steps, at progressively finer definition and with ever greater confidence.
Sometimes the goal is discovered in the process of making, not in strategy and planning up front.
Where there is no map to indicate the high ground, strategy is in part a matter of trial and error, something that emerges from activity in the marketplace (putting real things in customers’ hands) rather than through research or the application of accepted business or organisational theory.
Made by Many’s client programmes are founded on the belief that making real things is the best and quickest way to discover the right strategies and build the new culture a business needs to be successful in digital. This belief has led us to adopt a different set of values to those held in traditional business, technology and design thinking.
This isn’t to fetishise making for its own sake. Good early execution means we can build a store of success and gain credibility for a radically different way of working. Making things real is a means to the end of achieving a strong strategic position in a dynamic and fast changing situation; it teaches you how to change and it motivates people to want to change.
Making things collaboratively amplifies these effects.
Analogue values certainty: digital values adaptation
We value ‘making that produces learning’. However the much more common way - let's call it analogue thinking - values planning, detailed specification and speculation (a pejorative term for strategy created in a vacuum). Most analogue era consultancies, agencies and business leaders retain a bias towards big strategy and big design upfront and for that matter big technology upfront, precisely defined on paper before it ever gets into the marketplace, to which it is ultimately delivered as a big untested bet.
Such practices are built on the understanding that the world moves slowly in predictable linear ways around which a long term plan is the best way to reduce risk and produce a known and desirable outcome.
This was a reasonable expectation in the second half of the last century, when business management, industrial design and computer engineering disciplines were establishing their theory and practice. The main strategic drivers of cost, supply and demand moved in these fairly predictable, linear ways and extreme threats from disruptive business models or technologies were the exception not the norm. However in an age of software and plug-and-play electronics, in which change is instant and exponential, why do we stick to this manifestly failing approach? It's a deeper problem than process design: it comes down to the things management has come to value as second nature and - critically - how managers value themselves and their role within an organisation.
Traditional practice is supported by an embedded value system designed to achieve incremental gains: it values sticking to the plan, one thing at a time, separation of skills, hierarchical organisation, command and control and above all a set of skills expressed as ‘problem solving’ (often with the underlying assumption that the problem is to reduce cost). This way of thinking was delivered within the pseudo-scientific cultural construct of a white collar managerial class that placed itself very deliberately above and apart from the shop floor - away from the place of making things - and lodged instead inside the board room, the zone of administration: its outputs are the gantt chart, the spreadsheet, the blueprint, the presentation.
Our new digital world is by comparison inconveniently unpredictable but also a world which offers extraordinary opportunities that we can grasp and make as fast as we discover them; this is a process that demands creative intelligence, craft and engineering skills, unstructured thinking combined with analytical rigour - product modelling and business modelling meshing together. Blue collar working with white collar. These things aren't learned in business school or, for that matter, in design school.
No more planning landfill, less design waste
Where the old values meet the new world, and their advocates persist in practice that involve irresponsibly long term planning and design, the result is inevitably waste - a growing landfill of lost PowerPoint decks and the echo of bad advice delivered to clients with the absolute confidence that comes from decades of respect in the C-suite. The value of this work is still accepted unquestioningly in board rooms and procurement departments, such that it commands the highest fees; this is why it is rare, in the early days of a client engagement, that we do not discover a dump of these unread and wasted visions by this service design agency or that management consultancy, languishing in a dusty hard drive because the authors didn't actually feel the need to make anything. The talk might have changed (don’t we all do ‘digital transformation’ now?) but the default practice is strictly linear and privileges debate over doing, strategy over execution.
This is the value system that we are seeking to displace, so that we can make digital transformation in established companies more consistently successful. Bringing digital to the core of a business is hard because you have to overcome the inertia of the old system, and it is especially hard where that system retains a substantial residue of assets and revenue potential, in which case there is a (perfectly reasonable) fear of cannibalisation.
The business model drives culture, so if you want to change the culture, change the model
At the heart of the old system lies the business model, an abstraction given concrete reality by the systems, processes and organisation of people that help the model to work. Valuable assets (capital, brands, customers) have been accrued to serve the model, leaving a legacy that constrains both culture and scope for action as well as providing opportunities to scale quickly. A company’s organisational structure almost always slows momentum where skills and knowledge are separated in pursuit of efficiencies that advance the existing model. Even when you take away or radically alter the business model the cultural values and infrastructure that supported the old one often remain stubbornly in place, like ghosts.
Any would-be innovators have to overcome the silos the old model creates; that’s a struggle, wherever individuals are pursuing separate departmental objectives: so say goodbye to the big picture if you don’t remember to move the goalposts or find neutral routes across the silos. Making is often the best bridge you’ll find.
We use every aspect of the process of conceiving, testing and delivering real things to winkle out the blockers, find the best new ways of measuring and motivating, adjust objectives, change attitudes and build these bridges.
Businesses rarely know upfront what new skills or assets they’ll need to succeed in digital. The process of prototyping and delivering hero products into the market is often a more effective way of discovering how a business should organise for change; this is because it enables a business to observe its own ability to meet the new demands that digital products place upon it and adjust accordingly. At Made by Many, when we make a product we’re also making the tools required to deliver the product in a sustainable way; this is why we don’t just settle for prototyping customer interactions or underlying technology: we prototype the complete proposition, including the tools and processes the business will need to use to deliver it. The often remarkable effect is that new tools promote quick and substantial changes in attitudes: the actuality of ‘the thing’ replaces suspicion and fear with optimism and enthusiasm. This is also a point at which interesting unseen opportunities may emerge and the business strategy may need to change.
Here’s a real world example:
- We devised a disruptive digital news strategy for ITV, a leading UK broadcaster. The objective was to compete credibly - from a scarily low base - against better-funded and established digital incumbents such as BBC News, Sky News and dailymail.co.uk. The strategy involved what was then, in 2011, a unique streaming news idea built around updates, not articles. Testing with prototypes confirmed that consumers would be receptive (wildly so, apparently) and that delivery required a fast and friction-free editing tool unlike any then on the market: journalists were fearful of the impact on their working day of adding digital editorial demands to broadcast production.
- Rather than speculate or protest that these fears were unfounded, in just four days we built a working prototype of an editing tool that allowed drag and drop of multiple content block types (text, tweets, pictures, video). A programme of live delivery using successively improved variants of the prototype satisfied journalists’ concerns but also, using the prototype over time, it changed the way they thought about and delivered news stories.
- This is only part of the story, however. Having gone live, our rough and ready news strategy resulted in a 500% increase in audience within four months. This looked like success: but it wasn’t anything like the success we ultimately achieved. Two things happened that released the real power of the strategy. First, the speed of the editing tool enabled ITV News online to become the fastest breaking news service in the UK, publishing stories first and propelling the news site up the Google news rankings - this was an entirely unexpected by-product of the need to increase journalists’ productivity. Secondly, a major software release 15 months after relaunch focused on mobile optimisation and social sharing; it achieved a further 1500% hockey stick growth to 16m unique users a month. What kind of idiot would have dared to plan for a 2000% audience increase in such a short space of time?
Emerging realities, not predictive fictions, should determine how you invest and grow, so be careful what you measure
The takeaways from this story are twofold: first, nobody knew where the potential ceiling lay for such a service. We smashed our original targets and headed into completely unanticipated and unknown territory. In digital, measurement often changes by orders of magnitude. What is measured and the scale of expectations should be adjusted continuously according to what we learn - not predicted upfront by an entirely speculative strategy document. Adaptive planning also requires adaptive strategy and budgeting as new opportunities become apparent. Whereas budgeting is, conventionally, predicated on some reasonable certainty about returns around low orders of magnitude, in budgeting for digital, emergent properties or opportunities should be expected and actively searched for and provision made for investment in those that arise.
For ITV News, the core strategy was right but wasn’t going to achieve its full potential without a strong pivot to mobile-first and social sharing. We had no map, we brought in new ideas from outside the sector and they worked, but we could not possibly quantify or locate the strategic heights without some trial and error and our firm attachment to a philosophy of continuous improvement and adaptive planning. The strategy emerged from practice and observation.
This is (therefore) an argument for not just changing practice, but also changing business culture and values
In established businesses, organised around a norm of reasonable predictability and the pursuit of incremental efficiencies and known and repeatable goals, the highest value is placed on long term strategic and financial planning and on very precise definition of the ‘requirements’ and ’functionality’ of delivery - a blueprint for success that presumes to mitigate against risk but in a transformative situation is at best unambitious, at worst irresponsible.
Digital businesses succeed when they are supported by a very different set of values. We value the ability to evaluate a complex system of production, exchange and consumption and spot an interesting product opportunity. We value the ability to know when to stop talking or researching and start building so we can learn quickly. We value skill and speed in making and the facility to adapt as we iterate through multiple facets of product design: not just customer need, but also technical facility and business viability. We set high store on both creativity and collaboration, with mutual respect and understanding across disciplines - never one leading but balancing strategy, design and technology and relying on evidence-based decision making, not ego. Nonetheless we acknowledge and value special expertise or a privileged viewpoint. We also value access to the highest placed decision makers in order to make the maximum impact on a business. This is sometimes difficult to obtain where management lives in the realm of strategy, high in the top floor C suite. Top floor values also need to change.
C suite, come on down...
The design and technology professions have for decades complained that they aren’t given access to the C suite. That’s not our ambition at Made by Many, we’d like to turn that one on its head too. Yes we want to talk directly to the CEO and have the board sponsorship that’s essential for any ambitious transformation programme to succeed; but we prefer to bring the board members down to the shop floor, help them get their hands dirty, involve them directly in product innovation practices and learn and appreciate the cultural values and product philosophy that’s so essential for success but so different to the norm of traditional business practice. Doing it - making stuff - is the only way to appreciate the way of product culture and the power of product culture.
We find that the CEOs and board members of companies that have achieved some success in digital transformation are the first to recognise that their attention and resources should be equally focused on strategy and execution. Making is the way to learn about the new world and to de-risk innovation. Strategy is often emergent. Skill in making, learning and swift adaptation of tactics and strategy is where the real value lies.
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