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Iteration or transformation - which is your business transformation project, really?

There's a question I think many executives leading transformation should be asking themselves -- is your business really transforming?

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"Business transformation" is a hot topic in all sectors at the moment.And it's easy to understand why organisations are willing to embark on long term, multi-million dollar projects in order to achieve transformation. In addition to the customer-centric benefits, business or digital transformation projects are supposed to provide long term ROI, enhance efficiencies within the organisation, and promote competitive advantage.

But there's a question I think many executives leading transformation should be asking themselves -- is your business really transforming? It seems that in many cases, organisations are taking an iterative view, rather than a genuinely transformative one.

So how do we recognise (and measure) true transformation?

Within Telstra, we've been very focused on making sure that we lead genuine transformation. So I sat down to learn more with Jemma Vandali, Acting GM Service Creation and Design Practice at Telstra. Jemma is one of the change agents in the leadership team across the business given the task of helping to lead a "deep and genuine" transformation project around how Telstra builds new products.

Five years ago Telstra recognised a need to become far more customer-centric, and was struggling with how it could create a more responsive service development process. Jemma indicated that success has been built upon three key approaches - or adjustments in mindsets - that smoothed the transformation process across the entire organisation:

1) There was broad top-level support. The key to successful transformation projects is that they require the executive layer to understand that a transformation project involves a new way of doing things, and to have them unified on that vision.

2) There was also a bottom-up approach. A successful transformation involves giving people within business units more responsibility, giving them permission to have their own ideas, enabling them to start small and build upon success.

3) The organisation ensures that the right people have access to the right information and resources, investing in mentoring pathways and building the support around people to enable them to accelerate the change.

"Transformation involves more fluidity and encouraging teams and individuals to develop a greater range of different skillsets, so they can wear many hats, and have the right to sit at the table in the new agile teams. We have also transformed how we design, moving to a customer-centric viewpoint where our teams start with the users' insights and needs first (the why) before we start on the technology (the how). This has been a significant shift in Telstra's practices, where we would have historically dived straight into the technology. At the same time we're working with more and more cloud-based technologies, which are far more agile and suited to a newer style of iterative development." Jemma told me.

"We've moved from traditional IT roles to ones that have more accountability and a greater breadth of skills.Today at the heart of product development there's a Service Design Lead who is responsible for both the technical outcome and product success, whether it's a good technology for the customer, and whether it generates the right outcome for the business too."

So people are at the heart of true transformation, and this has required a cultural and skill-set shift within Telstra, both in terms of encouraging staff to take on new competencies, and in developing new hiring policies. Because of that, Telstra is now open to sourcing and recruiting talent from alternative sources (like hackathons), and has developed deeper and more robust mentoring systems, focused on cross-discipline skilling.

We have also had to acknowledge that in some areas we can't develop the necessary skills fast enough to meet our own demands. This has led to an inorganic scaling strategy, which has included the acquisitions of leading cloud technology companies Readify, Kloud and VMtech.

This clearly isn't a one-year project, and that's one of the hallmarks of a true transformation.

Changing the approach to technology, too

We've all been engaged in the iterative initiative of tasking IT teams to adopt modern best practices with regards to technology and drive optimisation of existing environments to reduce risk and cost. This includes efforts to consolidate datacentres and infrastructure, reduce the vast array of vendors we deal with down to a few strategic technology partners, and generally simplify the technology landscape. This is an important optimisation component of all IT strategies, however this program of work is typically focussed on tuning existing capabilities rather than generating transformative new ones.

The sheer pace of innovation expected by customers today has prompted businesses to look at how to leverage third party platforms (like cloud service providers) and specialised service partnerships to keep pace. To Telstra, it has meant a shift in mindset from being a 'technology builder' to becoming a 'technology aggregator'.

"We're all impatient in our digital lives, and our customers are no different. By aggregating innovation rather than building it all ourselves we're able to get features to customers faster, and it's closer to real time. We now have releases every few weeks, not monthsor even years." Jemma said to me.

This approach has its challenges - we need to be willing to cede some of the control over the products we use, and develop contingency plans in case the ongoing evolution of our supplier's technology no longer aligns with our own strategy. And when we source innovation externally as a service we become a servant of their change control, which can be challenging in enterprise environments that aren't used to operating at the speed that technology providers like the hyper-scale cloud platforms operate.

Successfully modifying the organisational processes to adapt to constant change enforced with little notice is one more hallmark of a truly transformed enterprise.

The lighthouse approach

One of my favourite things about transformation exercises is that as big as they can be, actually embarking on one can start from something very small. Some of the best business transformation projects started as simply as getting everyone in the staff in a room, handing them a piece of paper, and telling them to start designing. Once you get something small to work, and then show that the new approach can be successful - the "lighthouse approach" - it becomes easier to align the whole business behind the new approach to work.

"That's ultimately the difference between iteration and transformation," Jemma said to me. "We've iterated several times, but this is the first time we've really seen true transformation in the business - and we're getting there because it's about how we thought about the amazing people we have and the skills we need them to have into the future. This is something I'm constantly focused on and working on with the team - crafting their future... to match the organisation's needs now and the strategic skills we need for the future."

So although we've adopted all the tools (e.g. agile methods, lean start up and design thinking), in the end it's the change in our people that marks the success of a true transformation.

Let me know how you're approaching transformation, and how you define success?

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