With the amount of technology advances happening today, every company must become technology-empowered. It is no longer a choice. Becoming Tech-Empowered means that companies must have accelerated metabolism, be bi-lingual with business and technology, continuously evolving products and services and underlying technology platforms, digitizing everything the company does, and experiment and learn from mistakes and failures – the ABCDE of tech-empowered companies.
I recently spent some time with the CEO of a healthcare company and discussed how he thinks about technology. We discussed the concept of “tech-empowered” vs. “being a technology company”. He said that “Parker, you are absolutely right. It will be difficult for us to become a technology company. But we sure can be a tech-empowered company”. He then asked me the question that I have been thinking for a while – “But what is a tech-empowered company? How do I explain this to the whole company?”
Having spent some time deliberating on the definition of a technology-empowered company, I have come up with my definition of the ABCDE of being a tech-empowered company:
- A: Accelerated metabolism
- B: Bi-lingual where everyone can speak both the business and technology languages
- C: Continuously evolving
- D: Digitizing everything in the company
- E: The mind of Experimenting and Adapting
Let me expand on those 5 key attributes:
A – Accelerated metabolism
Tech-Empowered companies have a faster metabolism than their peers. They have a higher sense of urgency because they understand that markets are now changing faster, customer needs are changing faster, and technology is now advancing faster. They make changes to how their companies are organized and operated to be able to adjust to the market changes and technology advances quicker and deploy new products and services faster. For the tech-empowered companies, the pace of changes is not the usual years, but months and quarters and even days and weeks.
To enable the accelerated metabolisms, tech-empowered companies make changes to their underlying culture. They understand that traditional top-down control organizations do not offer the speed to react to the front line demands. The top-down control organization setups also don’t enable the productive feedback loops the accelerated metabolisms require. Thus tech-empowered companies aim to gut the top-down control into much more federated units working together – similar to the Team of Teams concepts described in Gen. Stanley McChrystal’s book. JPMorgan Chase’s agile management takes a similar approach where small teams of people responsible for products and services work with technologists to improve the customer experience. The teams are given the necessary authority and resources and they understand that they can make mistakes without punishment.
By having the accelerated metabolism, the growth curve for tech-empowered companies is also steeper than traditional companies’. The tech-empowered companies would typically see exponential growth trajectory, vs. the traditional single digit or even flat growth lines.
B – Bi-lingual: business language and technology language
If there is one thing that differentiates tech-empowered companies vs. traditional companies, it’s “Bi-Lingual” – it’s no longer business vs. IT or business and IT. The tech-empowered companies have no differentiation between the business and IT. Everyone is bi-lingual – business people can speak technology lingo and technology people can speak business languages. Technology is a default language across the company. Allianz, a global financial services company, has a similar goal – they called it “Digital by Default”.
By being bi-lingual, tech-empowered companies no longer create standalone business strategy and then try to translate the business strategy into IT strategy. Instead, there is a single business strategy in which technology is fully embedded. In the technology embedded business strategy, growth opportunities driven by technology changes are identified and technology investments required to capture the opportunities are fully articulated.
Furthermore, business and technology staff work together in teams to capture business opportunities, just like what technology companies such as Google and Amazon would have done. Everyone on the team understands technology and works together to pursue the opportunities vs. the traditional hand-off between business and technology.
C – Continuously evolving people, process, and technology
As Steve Jobs often said, “Stay Hungry; Stay Foolish”. Stay Hungry means that one should never be satisfied and should always push oneself. Tech-empowered companies don’t stand still. They don’t embark on multi-year programs and then declare victories. They understand that the market is constantly moving, customer demands are constantly changing, and technology is constantly advancing. Hence the tech-empowered companies build themselves to be continuously improving themselves with technology, to adapt themselves to stay ahead of the market moves, the customer demand changes, and the technology advances. Just like the LEAN and Six Sigma process improvement methodologies, tech-empowered companies constantly assess themselves for ways to apply technology to make the products better, make the process service levels more consistent, higher quality, and more efficient.
Tech-empowered companies also evolve their technology platforms to incorporate latest technology advances continuously. They understand that with technology, whatever they deploy into production today is obsolete tomorrow. Thus they regularly identify new improvement opportunities, size up the cost and the benefit, and enhance the underlying infrastructure accordingly. They are also not afraid of gutting what they have already done and move onto new platforms when necessary. For the tech-empowered companies, technology is forward looking, vs. backward looking and they don’t dwell on the technology debts.
Most importantly, they also evolve their staff’s skills continuously. With the technology advances, they understand that their staff must also continue to evolve their skills to pick up the latest technology advances and apply them into their day to day work. Thus tech-empowered companies create skill building infrastructure to ensure their people continued access to the latest technologies and also help the staff apply them into the business processes and technology platforms.
D – Digitize everything
Tech-empowered companies continue to identify opportunities to digitize everything. As John Donahue, the CEO of Nike, said in a recent Wall Street Journal interview, the future is about seeing things through the eyes of the consumer. Consumers want to get what they want, where they want it, and how they want it. It’s a blended digital and physical experience and the winning companies of the future will bring immersive, blended, digital and physical experiences. The tech-empowered companies focus on the immersive, blended, digital and physical experiences and constantly identify opportunities to automate manual processes and workflows to bring the blended experiences to customers and be more efficient and more productive. They also apply analytics and AI capabilities to make the processes more intelligent and augment humans with machine intelligence.
Tech-empowered companies also embed technology into their products and services. They don’t just sell their existing analog products online and declare success. They would transform the products and services by embedding technology into them and change the fundamental economics of the products and services to capture new growth opportunities.
E – “Experiment and learn” mindset
Tech-empowered companies understand that it will be difficult for them to get everything right the first time. That’s why their mental ways of working are to experiment and learn. This means that tech-empowered companies will continue to experiment with new features and functionalities. They leverage A/B tests to understand which experiment worked better and incorporate the learnings into the next steps of experiments.
Tech-empowered companies also experiment with new technologies with R&D investment. They understand that those experiments don’t always yield success and they are willing to live with the failures, as long as they learn something out of the processes.
Tech-empowered companies even experiment with new ways of working. They don’t just spend 6 months designing a new operating model and organization structure, another 6 months to make the organization changes, and then stay away from any organization changes for 5 years. They continue to experiment and tweak.
And they understand not every experiment will result in success. Some degree of failure is inevitable when a company fundamentally changes the products, underlying processes, and culture of the entire organization. Tech-empowered companies encourage taking calculated risks and celebrate learnings from the mistakes and issues.
There they are – the ABCDE of a tech-empowered company. Changes are hard, transformation often fail (in fact, McKinsey estimates that 70% of the transformations fail). But there is also no choice – in the future, all companies must be tech-empowered. Knowing what they need to be when they transform to become tech-empowered sets up the North Star for companies and will enable them to launch a successful transformation towards that.