This podcast episode on Design Thinking is a recap of the discussion that I had with a Design Thinking practitioner, Randah Tahir. Randah is a cultural designer, innovation facilitator, a TEDx, and a Keynote speaker. She is quite active not only in the Design Thinking space but is an active practitioner of a number of other problem-solving approaches as well.

Here is a quick rundown of the issues that we touched upon within the context of Design Thinking. First, we discussed whether Design Thinking is a strict methodology versus a set of loose principles that can be applied in the context of problem-solving. Then we will discuss if Design Thinking can be used alongside other approaches in a hybrid fashion to solve problems. After that, we touch upon the topic of Empathizing with the users, which as we know is one of the important steps in the Design Thinking method. We then also talk about another important step of the Design Thinking method, which is about Idea Generation and how that works within the context of organizations. And then we conclude the episode today by discussing one of the most topics in this context, which has to do with the cultural challenges that must be addressed before introducing Design Thinking in organizations.

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In this episode we cover the topic of design thinking, which is a problem-solving approach used in the design and development of products and services and in solving other problems as well. In this episode, we will answer the following questions:

The post Design Thinking – The What, Why, and How? first appeared on CorpExcellence.com.

What’s the role of operational excellence in an organization’s digital transformation journey? How important is the role of organizational culture in that journey? What are the elements of organizational culture that are linked to an organization’s digital transformation efforts?

In today’s episode, we will continue our discussion on the digital maturity framework. In part 1 we covered the first three elements of the digital maturity framework, which are innovation, market alignment, and customer centricity. In today’s part 2 of the episode, we will cover the remaining two, yet important elements, which have to do with operational excellence and organizational culture. So, let’s dive into both of those.

The fourth but critical facet about achieving digital maturity is that of achieving operational excellence.

Before jumping in to discuss how digital can help an organization achieve operational excellence, let’s first define the term and understand its impact on the overall performance of an organization. Operational excellence refers to successful execution of an organization’s strategy through lower operational costs and controlling various types of risks while delivering maximum possible value in terms of revenue and overall performance. So, from this definition, we can see that while the choice of an organization’s strategy ensures that an organization is heading in the right direction, operational excellence ensures that successful execution of that strategy results in maximum performance and value for the organization and its shareholders.

To get a better understanding of operational excellence, it would be better to review specific scenarios on how organizations work to achieve operational excellence as part of their digital transformation strategies.

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1. Operational excellence involves a redesign of an organizations’ business processes. As digital is enabling organizations to scale their business processes to handle more volume of transactions, growth in customers, online reach to varied audiences, and more, organizations work to redesign their business processes to scale and meet the growing needs of organizations
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2. Operational excellence is about process improvement. To increase efficiency and minimize waste, increase effectiveness, and overall value, organizations engage in various continuous improvement initiatives and attempt to instill that culture throughout the organization and its processes. Organizations are also looking holistically at all their business processes and finding opportunities where processes can be designed more effectively by bringing down silos and making the overall delivery process more agile.
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3. Operational excellence is about maximizing the effectiveness of an organization’s delivery pipeline. This involves establishing a project and program management culture, practices and processes, which ensure that an organization’s initiatives and projects are aligned to an organization’s strategy, that the right projects are selected for execution maximizing an organization’s investments, and maximizing the returns on projects that are selected for execution.
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4. Operational excellence is about optimizing an organization’s resources. Here organizations ensure that their resource allocation across the organization are optimized and result in the most bang for the dollars that they invest in resources.
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5. Operational excellence is about managing digital transformation and change effectively within the organization. As digitalization of organizations involves a major change within organizations, operational excellence practices ensure that these changes are well managed throughout their lifecycle.
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6. Organizations scoring high on Operational excellence measures have a strong and modernized technology platform. Such organizations are investing in digital technologies and modernizing their systems to help them become customer centric, reduce costs, increase revenue, and improve on other aspects impacting their overall performance.
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7. Operational excellence practices rely on a strong data and analytics Organizations that score high on operational excellence are increasingly investing in data analytics and Artificial Intelligence technologies to accelerate process enhancements and delivering more efficient operational results. The insights and intelligence derived from these analytics and artificial intelligence programs act as the driver to improve an organization’s overall performance.
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These are some of the facets that organizations can work on to achieve operational excellence. In future episodes at DigiBizCentral we will cover more on the specific steps that organizations can take to achieve operational excellence.

The fifth and last facet about achieving digital transformation maturity has to do with an organization’s culture. Organizational culture is an important dimension that underlies the success of an organization’s digital transformation journey.

So what is organizational culture? Organizational culture can be regarded as a set of shared values, beliefs, and practices across an organization and its employees.

Organizational culture is regarded as a key determinant in influencing an organization’s overall performance including its transformation of any type. And the same applies for the case of digital transformation. In fact, an organization’s digital transformation journey can’t be regarded as a success unless organizations are able to bring an overall culture change across the organization. In one of the research conducted by McKinsey, they clearly stated that culture is the most significant self-reported barrier to digital effectiveness. This was followed by other factors such as lack of understanding of digital trends, lack of talents related to digital and others.

And that’s something that the leadership of the organization must fully understand before taking their organizations on a digital transformation journey. It’s for this reason that organizational culture is an important dimension to measure an organization’s digital transformation maturity.

Culturally, organizations usually have to cross two hurdles when embarking on digital transformation initiatives. In the first case, we have organizations that try to make the digital transformation journey all about the technology itself. As we have discussed on other episodes of this show, the road to digitalization is not just technological in nature but rather involves major changes in an organization’s business processes, new organizational structures, reskilling and retooling of the organization, changes in work practices, collaboration, and more. So, imagine an organization trying to digitalize its processes and systems while facing internal resistance from its employees? The fact is that no matter what technological changes are made within the organization, a successful transformation can’t occur effectively without making a change in people’s mindsets, beliefs, and values, which essentially shapes an overall organizational culture. So, if the people are not on board with the overall transformation and with them learning the new ways of doing things in the digital world, then the transformation won’t be successful or would face hurdles and difficulties.

In the second case, although organizations understand the necessity of influencing a positive culture change, they don’t know how to make that change. The truth is that inculcating organization wide changes of any type are not easy and changes related to culture are even all the more challenging. And it’s here where strong leadership and leadership commitment is needed to make the change stick. It’s a well-known fact that cultural changes can’t be dictated through policies alone and nor can an organization’s leadership wait for the change to happen organically over time. Instead, an organization’s leadership must take charge of the change and drive a deliberate cultural change with specific goals in mind. This means recognizing the gaps that they see in their culture and then coming up with a plan to work those gaps. When senior leaders communicate the need for such changes and live through their principles on a daily basis embracing the associated language and behaviors, an organization can notice a ripple effect throughout their organization.

Once an organization understands the need for the cultural change and its close association with an organization’s digital transformation journey, it must define the specific elements that will shape that culture. As this can vary within each organization depending on its current cultural practices and the transformation that it’s seeking, each organization should define those elements for itself along with a roadmap to inculcate those elements within itself. Here I will review some of the common elements and attributes that embody an organizational cultural change.

Risk taking – A culture of risk taking enables an organization to push the limits and gaze in the unknown. This is what has led to a majority of the breakthroughs for organizations in terms of new innovations and discoveries. Organizations can limit the impact of the risks by encouraging smart risk taking as it allows employees to take risks within certain limits and keep things under control. An organization with a risk averse culture that tries to play it safe will rarely break from its current mode and venture into the bigger and better market opportunities.

Innovation and Experimentation – One of the cultural elements discussed in the context of digital transformation is that of innovation and experimentation. We know that the fast pace of new technological inventions and discoveries are putting pressures on organizations to apply those technologies in their businesses. This isn’t possible unless an organization has a culture of innovation and experimentation, which would allow organizations to find the right solutions for their business processes. Also, an organization averse to new technological innovations will find it difficult to move at the right pace to be able to experiment and adopt new technologies. So, an organization, which doesn’t support innovation and can’t tolerate failures associated with such experimentations will have difficulty in adopting digital trends that will help shape its future.

Agility – We have known for a while now the importance of inculcating agility values and behaviors in the new digital age. We know for example that organizations need to have agile processes to be able to respond to market changes and customer needs. Not doing so will leave the organization far behind its competition. But imagine an organization trying to implement agile processes in a culture where decision making is slow. It’s easy to see that despite the good intentions that an organization may have in making its change, it won’t be able to succeed unless it gets to the root and make cultural changes pertaining to how it thinks, decides, and acts. These cultural changes will help it become more agile and responsive to the market needs and pressures.

Decisions – This refers to a number of things, which include how the organization’s leadership makes decisions and also the extent to which an organization’s employees are empowered to make decisions. As digital is making it easier to provide access to the needed information, digital transformation can have an impact on how an organization makes decisions at all levels of the organization. Instant information access can enable an organization to make faster decisions and at different levels of the organization – something that can greatly contribute to an organization’s overall agility goals. An organization whose culture is not used to empowering various levels of the organizations to make decisions may find it hard to embrace these changes.

Other cultural elements and attributes include transparency, accountability, empowerment, employee engagement, and others. In future episodes at DigiBizCentral, we will cover in more detail specific steps an organization can take to embed the cultural changes important for digital transformation initiatives to succeed.

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Podcast transcription

For all of you who are embarked on a digital transformation journey, how do you know you are on the right track? Are your digital investments upping your enterprise’s overall digital maturity? How can we assess an organization’s digital maturity?

Hello everyone to another episode of DigiBizCentral podcast on organizational excellence. I am your host Wasim R. In today’s episode, we will attempt to answer these questions. But first, a note about this specific podcast.

The DigiBizCentral podcast on organizational excellence is focused on covering various aspects of today’s digital business particularly on business strategies as well as management methods and practices that drive organizational excellence. We encourage you to subscribe to this podcast to ensure that you are always getting notified on future episodes as they are published. Also, please take a moment to rate us on iTunes or whatever channel you get this delivered on. We highly appreciate your feedback.

In today’s episode, I will introduce a digital maturity framework, which organizations can use to assess their digital transformation maturity more holistically. The underlying idea behind this framework is that as an organization continues its digital transformation journey, it must pay attention to certain elements to ensure that they are addressed in their digital projects and initiatives. Defining a digital transformation roadmap with specific milestones and outcomes along the way can ease the transition and increase the chances of success. Before we get started, please note that I will cover this topic in two parts or episodes. As this is part 1, look for part 2 to be published immediately after this one.

So, let’s get started with Part 1 of this topic.

The world in general and organizations specifically have been going through a digital transformation for a number of years now. Digital transformation does not refer to one or two programs that an organization embarks upon at some point in time. Rather, over the years, most organizations have taken on various digital initiatives triggered by their business imperatives and since then have continued their journey, which continues until today and would for some time to come. Depending on when each organization started, they are at different stages of that journey.

But all this then raises the question that how does an organization know where is it in that journey of transformation and where’s it heading? Specifically, how can an organization know that it’s progressing and maturing as it goes through that journey? For example, does an organization that migrates its business applications to the cloud can be regarded as digitally mature? What about the one that actively uses social media to interact with its customers or the one that has established a blockchain system to manage its transactions?

The answer to that question is that unless those steps have helped your organization become more customer centric or improve on your operational excellence then the answer is no. The market doesn’t reward organizations for moving to the cloud, for example, unless those steps have helped your organization to come closer to your customers and made your organization more agile and nimble to respond to market needs.

The move to digital, therefore, must be more holistic in nature. In this fast paced economy, it’s important to ensure that rather than merely taking on a few digital products and services, an organization becomes digitally mature so it’s firing on all engines for it to be more effective. Band-aid digital solutions in this economy simply don’t work. We saw how GE, despite its numerous digital innovations, suffered serious setbacks due to not paying attention to its bloated internal operations and dropped out of the Dow Jones Industrial Average index after being on it for more than a 100 years. We saw a similar fate of ToysRus, who despite launching major digital initiatives a few yeast ago was recently driven out of business. And there are other numerous examples of organizations, which were driven out of business due to their pursuing one off digital solutions rather than paying attention to all the necessary dimensions to keep them competitive.

As for the digital transformation maturity framework, it has five dimensions and they are:

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• Innovation
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• Market alignment
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• Customer centricity
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• Operational Excellence
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• Organizational Culture
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It’s important to understand that achieving digital maturity related to these five elements that I just mentioned is not just about launching a project or two. For example, an organization can’t just become innovative by launching one innovation center. Rather maturity along these dimensions and getting these ingrained within the fabric of the enterprise requires establishing systems, methods, and practices that can traverse the entire organization along with retooling and reskilling of the organization’s workforce.

Let’s now cover the five dimensions of this maturity framework in more detail. In this episode, I will present the first three elements and we will continue with the remaining two elements in the next episode.

The first dimension necessary to achieve digital transformation maturity is that of innovation. In this fast paced economy where organizations in all industries are facing threats of disruption, no one disagrees on the need to constantly innovate to stay ahead in the competitive game. Innovation today is not about finding random opportunities to innovate a few products and services but instead it’s about changing an organization’s culture to bring innovation at all levels of the organization consistently. To do that, first, it’s important for every organization to define what it means to innovate. Innovation can be defined in multiple ways depending on various perspectives. Within the context of enterprises, we can say that it’s an overall process that identifies and creates new opportunities for the organization. These opportunities may be in the form of creating new products or services, streamlining of operations, making processes leaner, reduction of costs, and so on.

The goal of innovation in organizations is usually to take emerging technologies and prevalent industry trends, and then applying that knowledge in the context of the organization’s current state and develop new products, services, solutions, and even business models and frameworks. The goal usually is to make it easier for customers to engage with the organization, creating new products and services that are more aligned to the market, fixing issues related to operational excellence and so on.

To do so at a larger scale and to make it impactful enough, organizations must have innovative processes and practices at all levels of the organization. From small things such as including the right button on the right spot on a web page to pursuing innovative strategies and creating the most innovative products and services, a culture of innovation must be cultivated at all levels to enable an organization to stay competitive in this marketplace and economy.

And to do all this, i.e. to inculcate innovation throughout the organization, an organization should take formal steps and look at inculcating innovation as an overall process as well as a set of practices that must be introduced organization-wide. Having a formal method or framework can help guide the right processes, structure, and cultural practices across the organization and can help drive innovation at all levels of the organization resulting in new products and services, process improvements, injecting agility in all corners of an organization, etc.

When defining the overall framework or process of innovation, organizations must define it in the context of the various innovation programs that they already have such as R&D labs, CoEs, etc. The process should be defined clearly for all in the organization to see and follow. The better it’s defined, the more the process is likely to yield useful results for the organization.

To ensure that innovation gets its fair share of attention through digital transformation, many organizations can use a maturity model to guide their maturation in this dimension. For example, they may simply start out with a few innovation projects but then may push the concepts across the organization through awareness sessions, launching formal processes, creating new compensation programs to encourage innovation, and so on. This journey of inculcating innovation in the organization’s culture should be tracked and followed up to ensure its successful adoption.

To cite specific examples of innovative practices and steps that organizations can take, we see organizations establish companywide innovation centers, where staff can work on new opportunities and validate their commercial viability. We see for example Samsung establish a strategy and innovation center where it works on new products and services. Amazon has a Cloud Innovation Center where it experiments with new cloud products and services. A number of universities have innovation centers also. ASU, for example, has established a Smart City Cloud Innovation Center (CIC). And the list goes on.

The topic of innovation along with the other dimensions is quite extensive and can’t be fully covered in one episode. As I will cover these in more detail in other episodes, please ensure that you subscribe to this podcast so you are notified of the episodes as they are published.

To summarize what we just discussed here for innovation, an organization should first define innovation more specifically and have a defined framework and process to ensure that its implementation can be tracked. Second, it should consider implementing a formal method to ensure that it’s constantly innovating. The important point is that an organization should not be solely driven by ad hoc innovation practices or projects. Rather, innovation in the digital world requires the organization to espouse a cultural transformation, where all its staff have the mindset of solving problems. A few digitalization projects and initiatives may solve certain problems for an organization but it will introduce others. To tackle the ongoing challenges that will crop up on a nonstop basis and at the speed of the market, it’s important that an organization and its staff have the right mindset and agility to tackle these challenges.

The next dimension to measure an organization’s digital transformation journey’s maturity is that of market alignment. Market alignment may mean a number of things to different people and audiences. However, in the context of digital transformation and digital maturity, I mean it in the sense of ensuring that an organization’s products and services, its message to its audiences, and its overall practices and processes are aligned to the overall market and economy such that the organization is able to not only compete effectively but also deliver the best possible results.

With the change in the business landscape for each business, each organization (depending on the business it’s in obviously) should appropriately keep tabs on various external factors to ensure that demand for its products and services doesn’t go down, or that its brand and overall business performance is not impacted.

For example, staying appropriately aligned with the market and its trends enabled Netflix to create a new value proposition in the face of its competition from Blockbuster and others. It enabled Amazon to debut its cloud based services when none existed. It drove IBM to shift its strategy and accordingly its spending away from its hardware business to the cloud, AI, and other digital innovations.

So, we see how staying connected with the market and being agile can help an organization to survive as well as thrive. Additionally, staying connected with the market and its trends can help organizations to not only deliver what’s best for its audiences and customers but it can help them see opportunities that they otherwise wouldn’t be able to see that easily. For example, a number of us know how Google started out as a major search engine. But over the years we have seen them expand their capabilities to create even more products and services. For example, they have expanded into marketing, and other businesses. Recently, using their existing capabilities and access to the information that they already have access to and based on the direction of the market, they launched “Google Flights”, a service which allows customers to find the best flights. This service now competes and threatens existing players such as Expedia and other online travel agencies. Another such example is that of Google Hotel Ads, which provides hotels with a new platform to increase their digital reach and generate digital demand through other channels rather than making their properties available through traditional Internet portals. Again, by launching these products and services Google stands to disrupt the digital pioneers in the market such as Expedia, Booking.com, and others.

So, in summary, the nature of the digital world and how it operates necessitates that organizations not only align themselves to the market, its trends and its audiences, but also to adopt agile practices that can help them respond to those market conditions effectively.

The third dimension to measure one’s digital transformation journey is that of customer centricity. Almost every business book and the many strategy discussions today emphasize the need to be customer centric. Although organizations have known about the need to focus on customers since they have had customers, one wonders why is ‘customer centricity’ so important now. The answer is that over the years, as organizations have grown to bring in more customers through automation and online technologies, they had started to drift away from providing the levels of personal attention that they used to give to their customers when there were no such systems. So, we see that those systems seem to have come in between the organization and its customers. As the world is increasingly becoming digital and organizations are scaling their operations further, they are rushing to build functions and features in their systems, people, processes, and culture to ensure that while they can continue to scale and grow using these systems, they stay close to their customers.

Organizations also need to become customer-centric because customers are more empowered than before. Customers, for example, have access to more information, are equipped with state of the art gadgets and have strong peer networks that empower them to make more effective and instant decisions. The enterprise challenge thus is to recognize those realities and to find innovative ways to connect to the consumer ecosystems making their services more useful to those consumers.

We should also remember that customer centricity is much more than building a few bells and whistles on an organization’s websites or apps. We know through research and empirical evidence that customer experience has multiple dimensions such as offering the right price, personalization, response time, look and feel, needs fulfillment, feeling of getting a good experience, good quality, and so on. So, it’s easy to see why organizations need to take a longer term view of this topic rather than brushing it under the rug by adopting a few band aid practices. In fact, many organizations have found that taking a holistic view of customer centricity may require completely reimagining their businesses or having them completely alter their business models. As a result, we see organizations making customer centricity as part of their core strategy and making it part of their key strategic imperatives. Facebook for example highlights the need to “…give people the power…” as part of its vision and mission. Microsoft mentions the need “to empower every person and every organization on the planet to achieve more.” Walmart talks about “… bringing value to customers” as well as “…accelerating innovation to save customers both money and time.” And the list goes on.

Becoming customer-centric in this digital economy starts with asking a number of questions such as these:

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• In this digitalized world, how can we get to know our customers better?
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• What relevant data can we capture from our customer journeys? And then, how can we use that data to improve those journeys, learn about their preferences and behaviors and meet their needs?
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• How can we provide superb customer experiences consistently through all of an organization’s digital and non-digital channels?
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• Based on our business models, what are the best ways to engage our customers?
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• How can we better fulfill their needs and provide them differentiated products and services?
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• And so on.
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As we can see becoming customer-centric is a larger problem and requires that an organization take a longer-term view and start addressing the various facets that will help the organization become truly customer-centric. In summary, this means that an organization needs to define a customer-centric operating model for itself and then to guide its transformation based on that operating model and framework.

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The post (Part 1) Digital Transformation Maturity Framework (Innovation, Market Alignment, Customer Centricity) first appeared on CorpExcellence.com.

In this episode, we will review the important concept of strategic thinking and its applicability in the business world and strategic decision making.

At work and also in our personal lives, we’re often asked to think strategically in order to improve our decision making. But what exactly is strategic thinking? Is it just another management buzzword, or does it really have any merit?

Before we try to understand strategic thinking, let’s first review the concept of its counterpart, which is referred to as conventional thinking. Conventional thinkers like to draw between the lines established by others. In other words, they stay inside their “boxes” and thus there is little in terms of creativity involved in thinking through conventional means. Within the context of our work in organizations, conventional thinking offers limited opportunities as improvements are mostly incremental. Based on the nature of the competitive environment that we have, we need something more creative and transformational in terms of how we think and create solutions.

And that’s where we get into the concept of strategic thinking. Strategic thinkers have a much larger, more creative, and forward-thinking framework. This type of thinking doesn’t just solve immediate problems: it also expands the organization’s possibilities and has the potential for more breakthrough solutions.

Due to its scope of being deep and broad, strategic thinking involves targeted research, large-scale thinking, and forces on to step out of the box to bring fresh perspectives.

Strategic thinking is typically used as a corporate management tool for formulating promising long-term strategies. Its benefits in a corporate setting are obvious because of the complex problems where its usually used. It requires a joint effort from different experts from multiple domains. But although it’s traditionally associated with corporate planning, strategic thinking is equally useful for smaller organizations, especially in situations where more rigorous, creative thinking and targeted action are needed to solve the problem. Relying solely on conventional thinking and techniques will probably not yield optimal results in such cases.

Aside from solving problems, strategic thinking can result in key insights that can then result in intelligent organizational decisions, which in turn can lead the organization into new and promising directions. Business literature contains many ideas on this type of thinking, but for those of us who are unfamiliar with it, here’s a simplified model that’s relevant to all levels of organizational planning and problem solving. You can use these following 4 steps to think strategically and use the ideas to advance your business.

Mapping out the ecosystem helps to provide the context of the problem, including its background and it can prevent you from developing a tunnel vision. If you think about it, how many times have you really been in a situation where an idea that looked promising at first sight turned out to be not so great when considered from other angles? So, a 360-degree view of the problem allows you to see the problem from all angles, i.e., in the context of the overall picture, before examining the different solutions.

The output of this step is that you have defined the problem in much more detail and it usually involves a detailed map or model of the problem’s ecosystem.

For example, what would you do as the new CEO of a troubled company? What strategic thinking approach would you use? Your first task would be to collect as much information as possible on the company’s operations, sales, and other aspects of the firm’s value chain. That information would then become the focal point of an interdepartmental brainstorming session that would use the different types of available expertise to yield critical insights.

Once you go through this step, it will result in creative new insights and lessons, along with a list of potential options and solutions.

This step results in final recommendations and ultimate decisions based on a careful examination of the practicality and benefits of the options yielded in Step 3 above.

Finally in summary, we can say that strategic thinking undoubtedly requires additional skill, time, and effort, but the investment is definitely worthwhile. While conventional thinking may be useful for ordinary situations, strategic thinking is more effective for tackling new problems and accelerating company growth. Because of its farsighted, creative nature, it also has the capacity to generate excitement and direct growth into groundbreaking channels. Lastly, let’s remind ourselves of a useful quote from Albert Einstein who said that “The world as we have created it is a process of our thinking. It cannot be changed without changing our thinking.”

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This podcast focuses on lessons from Amazon.com’s success based on its recent performance results and a few lessons and takeaways that can be beneficial to others. Now a lot has been talked about over the years on how Amazon has excelled in both customer experience as well as operational excellence. But as the company continues to improve and excel year after year, we are compelled to revisit the topic and its performance. Just recently, Amazon and Jeff Bezos released the annual shareholder letter describing the organization’s performance. That’s what we will discuss today.

We can learn a number of things from this report especially about how an organization like Amazon has achieved its current stature and position in the industry. In general, reports like these can be very useful in understanding the psyche of the organizations, what drives them to do better and excel, and then see the impact of that in the results and outcomes.

So, in this podcast, I will go over some of those points that Jeff Bezos has highlighted in that report and what others – both businesses as well as individuals – can learn from Amazon.

First, I would like to highlight some important facts that Jeff Bezos mentions in the opening of his letter. And that has to do with Amazon being ranked as number one in various customer surveys. Amazon it seems was ranked as number one in the American Customer Satisfaction Index for the 8th year in a row – it was also ranked number one for the 5th year in a row in the U.K. Customer Satisfaction Index, which is put out by the Institute of Customer Service – it was also ranked as the #1 business on LinkedIn’s 2018 Top Companies list – and it was number one for 3rd year in a row on the Reputation Quotient, which is released annually by the Harris Poll. For those who don’t know, Reputation Quotient issued by the Harris Poll quantifies the reputation ratings for the 100 most visible companies and they have been doing this for the last 19 years or so. Additionally, Amazons’ India site – Amazon.in – has become the fastest growing marketplace in India, and the most visited site on both desktop and mobile, and also boasts the most downloaded shopping app in India in 2017.

Jeff Bezos then goes on to highlight three elements that in his view drives this level of performance. He highlights them as unrelenting customer obsession, ingenuity, and commitment to operational excellence.

So, let’s look at Amazon’s performance on various fronts.

Before we get into the potential reasons for Amazon’s success, let’s briefly review its performance over the last year.

First, its prime membership has grown to exceed 100 million subscribers. That means 100 million subscribers consider it worthwhile and of value to pay the $99 annual membership fees. More than that, this membership has now expanded to include more countries outside the USA.

Second, Amazon’s cloud platform called AWS or Amazon Web Services has grown to provide thousands of cloud based services making it easier for cloud developers to build digital systems and applications. Also, the fact that it’s annual conference on cloud computing services exceeds 100,000 attendees and participants, says a lot about the popularity of its cloud computing services.

Third, Amazon marketplace that enables third party sellers to sell on Amazon has grown substantially. Although the actual number is not known but it is in the millions and just in 2017, 300,000 businesses started selling on the Amazon platform. That’s a staggering number of businesses and shows the power of the platform. If the sellers on the platform has reached such a high number, this naturally would attract even larger number of shoppers.

Fourth, Amazon has also started to venture in the brick and mortar business, something that is new for the organization. For example, it has launched a new store called Amazon Go that requires no checkout. It uses a number of technologies including computer vision, sensor fusion, and deep learning, which all come together to create a Just Walk Out shopping experience for customers. Also, Amazon has acquired Whole Foods in an effort to making high-quality, natural and organic food available for everyone. They are also offering these products for delivery to prime members in certain markets. Amazon is also identifying in store Whole Foods shoppers who are prime members and have begun to offer special benefits and services to them.

Amazon also continues to excel in the area of Prime Video. For example, in 2017, Prime Video Direct secured subscription video rights for more than 3,000 feature films and committed over $18 million in royalties to independent filmmakers and other rights holders. Again, by bringing in more sellers and content producers on the platform, Amazon in a way is guaranteeing a wider adoption and use of its digital video membership.

At this point I am going to pause as the idea is not to list all of Amazon’s products and services. If we go through the full list, we will see that Amazon boasts similar results in the areas of selling music where it has 10s of millions of paid customers, Fashion where it continues to attract and host big brand and other clothing and fashion items, and even hardware devices where it has sold those to millions more customers.

So, in the next few minutes, let’s note some key takeaways that leaders in other organizations can use and apply to their organizations.

Customer Obsession: In his letter to the shareholders, Jeff mentions “unrelenting customer obsession” and commitment to operational excellence as two of the elements that drive Amazon’s performance. Both build on each other and you can’t have satisfied customers by missing any of the two. When we look at the surveys, indexes, rankings, etc. there is no doubt that customers rank Amazon as the best in serving its industry’s customer needs. And we see this in the rest of the market and in other cases that companies who succeed almost always have this level of customer obsession. Having this customer obsession then translates into behaviors within the organization that drives the quality of the organization’s systems, processes, and people – the three building blocks of any organization that in turn drives the quality of an organization’s products and services.

In the age where customers are more empowered than ever before in terms of being more knowledgeable, having access to more information, and having high expectations, it shouldn’t be too difficult to understand for the need to be obsessed with meeting and exceeding customer standards and expectations. All this along with the fact that customers can switch loyalties in a matter of seconds, organizations must have that level of obsession to be able to meet and exceed customer expectations.

The next takeaway and observation that we can make is that Consistent Growth Reflects Impact of a High Standards Culture: As we discussed earlier, Amazon has grown consistently and substantially in ALL areas of its business. This says a lot about its leadership and as we discussed earlier, the high standards that it has set for the almost 600,000 employee organization. For leaders of other organizations – whether small or large – this confirms years of observations, study, and research even more that a high quality culture established at the top almost always finds its way to permeate in all nooks and corners of the organization. And in this case, a culture set of high standards is showing phenomenal results in all parts of the Amazon Empire.

In fact, Jeff mentions the importance of high standards as the reason behind achieving this level of excellence in customer experience and the importance of inculcating a culture in the organization where it’s easy for people to achieve such high standards. When high standards are instilled in the culture, then obviously that will have an impact on people, processes, systems, and the products and services that the organization delivers to its internal and external customers.

So, the takeaway for the rest of us is that it’s important for the leadership to institute a culture of high standards within the organization. That culture can be instituted by committing to it, communicating it repeatedly to the staff, and to live by that commitment so it becomes a habit. And leaders know that even a small change made at the top can cause ripples in the organization and this can increase the quality of all deliverables, products and services that staff deliver to their internal and external customers. In Amazon’s case, as we will see later in this podcast that every business from online retail to cloud computing services to the sellers marketplace, experienced phenomenal growth. It’s obvious that the commitment and obsession with high standards set at the top of the organization has had an impact on all parts of the business.

The third observation that we can make has to do with the Power of an Innovation Culture: Jeff mentions “ingenuity” as another key element for its success. If we look closely, not a quarter goes by that we don’t hear about a new product or service from Amazon and this speaks volumes about Amazon’s amazing innovation culture. It’s not about the success of one product or service, rather we see the success of an innovation culture at play – a culture and a process that consistently pushes new products and services on a regular basis. And that’s the takeaway for the CEOs and for the rest of the business leaders and that is to focus on instituting a culture and a process that not only encourages innovation but has the processes and systems in place that will take those ideas and have them evaluated and tried. This then can result in innovative products and services from all corners of the organization. So, it’s not about relying on a set of heroes or one team – rather it’s about a process that encourages everyone to bring forth ideas, have them considered and evaluated for business and customer value. When the whole organization is motivated to innovate as part of their daily work, then the whole company feels invested in the process and the entire company wins.

Power of the Digital Platform: We have to address the elephant in the room and that’s Amazon’s digital platform on which it continues to win and grow. Amazon is one of the best examples that illustrates the power of the digital platform. A platform that is able to enroll both producers and buyers intelligently and then can find ways to retain them to use its services can grow at phenomenal rates. More than simply enrolling buyers and sellers on its platform, Amazon has gone deeper and wider to offer value added services to both of those communities. There is a reason that on one side it has 2 million sellers, hundreds of thousands of authors, millions of AWS developers, and on the other side it has hundreds of millions of customers. Amazon has done that by recognizing the needs of both communities and has made it easier and worthwhile for them to conduct their business on its platform. So, the takeaway for those who either have already built their digital platforms or are in the process of building them is that more than focusing to grow ones subscriber base, they should focus to understand the needs of the market’s audiences and then to build those on your platforms. Once that’s done, enrollment will become far easier. So, the mantra has shifted from “build it and they will come” to “build more value added services and features and they will come”.

The final takeaway is that despite all these accomplishments, Amazon considers itself in Day 1 of its innovation and progress. That says a lot about its relentless focus on tomorrow and what and how it can make its customers lives better. The company may be celebrating its successes but it’s not resting by any means. And as we have noted earlier, Amazon’s ongoing experimentation with new technologies related to machine learning, artificial intelligence, computer vision, and more can tell us what’s in store for Day 2 for us (still Day 1 from Amazon!) This poses an interesting challenge for the leadership and that is how to maintain that balance between celebrating your successes yet continuing your customer centric march toward continuous innovation, improvement, and achievement of business outcomes.

In summary, we see that the key drivers for Amazon’s success have been its customer obsession, its high standards culture, its focus on having a culture of innovation, and its efforts to continue to build its digital platform.

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In this episode, we will cover five key priorities that an organization’s CIO or CTO should focus on to smooth their organization’s digital transformation efforts.

In the context of building the right vision for an organization’s digital platform, we know that in today’s economy and digital markets an organization either creates its own digital platform to deliver digital services for its ecosystem members or uses an external digital platform to deliver its services. For example, GE has built its Predix platform to provide maintenance for its equipment that it sells to customers worldwide. It’s able to use that platform to provide services and has proved to be a major source of value for the organization. Other organizations such as Amazon have built a retail selling platform that it has opened to businesses to enable them sell their products and services through the Amazon platform. Thousands of businesses are successful due to selling on this platform. Similarly, almost every industry has organizations that have built successful digital platforms to provide services to their customers. So, part of defining a digital vision for its organization, a CIO will have to define their organization’s vision for either the development of new digital platforms or integration with ecosystems and the organization’s future position relative to that ecosystem and digital platform.

To ensure that the vision doesn’t sound as a wish or a dream, CIOs must embark on a transformation program and create and communicate a roadmap that shows the planned and progressive realization toward the new digital enterprise. The transformation roadmap should focus on all three dimension of people, process as well as technology along with working with all other stakeholders.

In conclusion, these CIO priorities primarily centered on creating the right vision of a digital enterprise along with a proper roadmap with some strategy execution tips.

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In this episode, I will cover five habits that you as a manager must adopt to stay competitive in today’s digital markets and economies. We know that competitive pressures have been building up in today’s marketplace and digital disruption has created a fast-paced environment that is challenging traditional business models and requiring organizations to transform in order for them to remain viable. Effective team leadership in this new business environment demands that managers find fresh ways to help create both business value and a rewarding experience for colleagues and team members. To do this, you as an executive and / or manager must adopting new habits to help your teams and groups achieve the flexibility required to tackle the headwinds of this new competitive climate.

Here are five of those habits:

Whether overseeing large projects or smaller tasks, managers need to define their department’s work in the context of overall business outcomes. Examples of business outcomes are growth in sales, improved customer experience, increased productivity, and reduced process cycle times. A problem that some teams face is that they get so bogged down in addressing lower-level requirements that they lose sight of the company’s overall target outcomes. One way to fix this is to implement trace-ability mechanisms that will track the relationship of lower-level activities to larger business outcomes. This can help you to align your department or group to the organization’s overall objectives and keep your teams focused on delivering business value.

Many organizations use quantitative metrics such as Key Performance Indicators (KPIs) to help their departments and managers stay focused on delivering the desired end results. However, improperly defined KPIs can have the reverse effect by obscuring the team’s ability to attain business value that’s relevant to the company’s larger goals. In such cases, you as a manager need to bring your teams back into focus by putting business outcomes in the context of overall business value. Doing this will help team members to think on a larger scale.

Thinking and communicating in terms of business outcomes also brings managers closer to their customers and stakeholders, ensuring that the department’s delivery is in line with their expectations and preventing any surprises in the future.

A healthy organizational culture is a prerequisite for achieving optimal organizational performance. An organization’s culture depends on the mindset and behaviors of its employees, who take their cues from the leadership’s core beliefs, values, and practices.

As a manager, your potential for building a strong cultural foundation for your department gives you considerable influence. Among the ways of inculcating a positive culture are improving communication between team members, communicating core values to employees and practicing them yourself in your daily work, appreciating and valuing your team members’ input and efforts, and encouraging risk taking. Investing in your department’s culture will help employees feel personally fulfilled and also build trust and respect, all of which lead to a more motivated and creative staff. The positive impact on the thinking and performance of your department can only benefit the company as a whole.

Demands for speedy delivery are pushing managers to reduce cycle times across all levels of the organization. Methods such as lean and agile have proven useful in software development, manufacturing, and other organizational functions. But effective managers recognize that, more than a methodology, agile is a shift in mindset that embodies principles of incremental and iterative development, better customer alignment, and the use of feedback loops to improve products and services.

Agility in today’s environment, for example, means preferring rapid and incremental delivery of products and services with limited functionality, rather than waiting longer for hefty feature releases. In the new paradigm, failing quickly and learning from your mistakes is at times considered more desirable than engaging in extended (and sometimes indefinite) planning and analysis cycles. Managers who embrace these principles understand that being agile can help not only with working around complexities, dependencies, and uncertainties but also with ensuring rapid delivery to the marketplace.

Departmental processes certainly help an organization to meet various performance objectives, but standard processes and predefined scripts cannot guarantee the successful achievement of all performance goals. Many tasks and situations require out-of-the box thinking for generating innovative ideas and solutions. Effective managers establish systems at the departmental level that encourage creativity and innovation for the purpose of tackling challenging problems and situations. Organizations like Google are known for allowing their employees free time for projects and activities unrelated to their daily work. This helps to stimulate their creativity by giving employees an opportunity to step outside the “boxes” created by repetitive daily tasks that may have caused their thinking to become too restrained.

While the value of creative thinking is well known, it’s more commonly preached than practiced. To drive such new behaviors, managers must lead both through their own focus and consistency and by fostering team collaboration and creative thinking. By instituting practices that encourage people to step away from their usual thinking patterns, managers empower team members to bring forth new ideas. Also, to ensure all ideas are given an equal chance of evaluation, many managers and organizations are now instituting more structured approaches for capturing and vetting ideas before they get lost.

Effective managers also create a learning organization where employees collaborate and constantly learn from each other’s experiences, thus increasing the company’s collective wisdom. According to Peter Senge, who spearheaded the concept of the “learning organization” in his book The Fifth Discipline, instead of building pockets of expertise, effective managers strive to increase the overall capabilities of their organization. Knowledge creates more knowledge, and when shared with others, it has a compounding effect so that the acquired collective wisdom is more than the sum of its parts.

Cultivating and maintaining a strong learning environment requires setting up various forms of collaboration and communication such as meetings and workshops to facilitate sharing and dissemination of information. It also requires implementing a system capable of capturing large amounts of knowledge and experience. Specific methods vary, depending on the manager and the organization’s needs. For example, an organization where sales teams shared their learning experiences from the field would require a different setup from an engineering group with a focus on learning from product development experiences.

A collective learning environment puts both managers and organizations in a better position to meet the new and constantly changing requirements of today’s business climate. Companies with this type of environment use mistakes as learning tools by capturing the lessons they provide through feedback loops and then disseminating them across the organization. An organization that only focuses on providing periodic formal training for its employees is missing out on these types of opportunities and the rapid development and growth that they bring.

So again, the five proactive habits for you to adopt as a manager in today’s economy are

Finally – Remember, great managers know that change is the only constant and that a company’s greatest asset is its people. By encouraging creativity, transforming mistakes into wins, and fostering a healthy, cooperative learning environment, you can help accelerate your organization’s growth and create a rewarding experience for all involved.

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Watch the video below to learn more about Gartner’s Hype Cycle Tool

As a technology executive, you are constantly expected to embrace new technologies and trends to help your business gain a competitive edge in your industry. How do you make those decisions, especially when the technologies in question are still new and have a greater risk associated with their adoption?

Let’s take some recent trends. A lot of enterprises are testing the waters to potentially adopt emerging technologies such as machine learning, smart robots, cognitive computing, etc. How can one get a perspective on the maturity of these technologies within enterprises in general and their future potential?

To help with these decisions, Gartner introduced its Hype Cycle tool a few years ago and is currently used by many organizations to drive their technology strategy and investment decisions. The Hype Cycle is a graphical representation of how technologies progress from conception to maturity to becoming mainstream. This tool helps technology professionals get insights on the maturity levels of various technology innovations and the market adoption path that a technology may take in the future.

Each year, Gartner releases more than 90+ Hype Cycles related to various domains. Some of the recently released Hype Cycles relate to domains, such as Emerging Technologies, Midsize Enterprises, Data Management, Digital marketing and advertising, Internet of Things (IoT), and others. An example of a Hype Cycle diagram is included below in this article. You should note that the diagram is included as part of a detailed report that Gartner issues to its members only and is not available in the public domain.

The Hype cycle (presented below) is a graphical representation that shows a new technology’s progression through five distinct phases before reaching a ‘plateau of productivity’, where it is considered mature and mainstream. The Innovation Trigger is the first phase, when a technology breakthrough creates early excitement in the market and starts to become popular. At this phase, the adoption amongst a select few early adopter organizations picks up pace. However, the products related to the technologies in this phase are still not mature and are not widespread.

The technology then reaches the next phase of Peak of Inflated Expectations, where the market’s expectations peak, and the market slowly starts to lose interest, perhaps due to the technology not living up to the hype or other reasons. As Gartner states, the only enterprises making money in this phase are conference organizers and magazine publishers. From here, due to lack of meaningful results and accompanying negative coverage, the interest and adoption slow considerably, and the technology slides down and hits the Trough of Disillusionment. Although one would think that most technologies would die in the trough, an interesting thing happens, and the interest in certain technologies starts to pick up again. This may be due to focused experimentation by some organizations that leads to a true understanding of the technology’s applicability. This is where the technology enters the phase known on the Hype Cycle as Slope of Enlightenment. From here, the benefits of the technology are widely understood, tools mature in the market, and the use of technology stabilizes and enters the phase of Plateau of Productivity.

The Hype Cycle is a useful tool, as it can help technology managers get an informed perspective before rushing to adopt new innovations or abandoning them as those technologies fail to live up to earlier touted expectations. In general, the tool can help technology executives get a perspective on the following:

The following delineate some observations related to the use of this tool.

The following are some perceived limitations related to this tool.

In summary, let’s remember that while adopting newer technologies and innovations provide opportunities for competitive advantage and positioning, they have certain risks. Although tools such as Gartner’s Hype Cycle can provide useful insights related to new and emerging technologies, organizations should also review industry specific implementations before making strategic technology decisions.

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To download free reports on IT Alignment and best practices on steering committee’s role in shaping an organization’s governance framework, enter your E-mail below. You will learn the following:

In this episode, we will review some best practices related to establishing an IT Steering Committee function. An IT steering committee ensures alignment of IT and business and thus is a crucial function that is needed in organizations.

So, first, let’s take a look at what is an IT steering committee and the benefits that it serves to the organization. After that we will review some best practices related to establishing this function within an organization.

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IT steering committees bring key IT and business stakeholders in a common forum to discuss matters related to strategic planning, program planning and project and program approvals. A typical steering committee usually includes the CIO, other key members of IT management, and executives from various Lines of Businesses such as Finance, Marketing, and others. When instituted correctly, programs are strategically planned and approved mutually between both parties, and thus one can expect IT and Business alignment.

Although a number of organizations have IT steering committees in place, only a number of them are really effective. In fact, a research conducted by the Info-Tech Research Group highlighted that 88% of CIOs believe that their governance structure and processes are not effective. As IT steering committees serve as an important glue in the overall IT governance process, they can encapsulate a number of critical decision making processes and activities, especially those related to the review and approval of key technology related initiatives. Due to the criticality of this organizational function, it’s prudent therefore that organizations should invest in improving the effectiveness of these committees.

Here are some best practices that an organization can follow to improve their effectiveness.

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