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|In: Cognitive Enterprise|Last Updated:

Dialog from Blazing Saddles:

Gabby Johnson: I wash born here, an I wash raished here, and dad gum it, I am gonna die here, an no sidewindin’ bushwackin’, hornswagglin’ cracker croaker is gonna rouin me bishen cutter.

Olson Johnson: I’m particularly glad that these lovely children were here today to hear that speech. Not only was it authentic frontier gibberish, it expressed a courage little seen in this day and age.

And so it is that some of my colleagues and I have added the acronym “AFG” to our vocabulary, for “authentic frontier gibberish.” There are skeptics who might want to apply the AFG seal of disapproval to some of the more vague and less useful discussions about Digital and why it matters to modern businesses.AFG

The AFG is unfortunate, because the Digital business model fits nicely into a list of about twenty we developed some years back at my old consulting company, IT Catalysts (credit where it’s due — our starting point was Michel Roberts’s excellent Strategy Pure and Simple (1993)).

At the time we called the business model in question the Technology/Competency model. The idea: Take something your business is already good at and find new, marketable uses for it. In The Cognitive Enterprise Scott Lee and I made it the third part of our Customers/Communities/Capabilities formulation, “capability” being our now-preferred term for “competency.”

And companies that adopt this business model don’t stop with taking advantage of the capabilities they’ve already mastered. They take the next step, making strategic decisions about what new capabilities to build, and for that matter which existing ones are declining in importance and should therefore be sunsetted.

Enter Digital strategy. Shorn of the AFG, adopting a Digital business strategy means using newly emerging or under-exploited technologies to build new business capabilities, which, once mastered, can be used to bring new products and services to market quickly, because so much of what’s needed to bring them to market is already in place.

Simple example: As a consultant, I’ve developed a decent bag o’ tricks for meeting facilitation. I’ve also developed a reasonably good set of techniques for taking strategic intent and turning it into a program of action.

These are, I think, two of my Capabilities, and if you disagree please don’t disabuse me of my conceit.

The point is that with these two Capabilities in hand (and some others, but the point here isn’t to extol my numerous virtues) … where was I? With these existing capabilities I’m in a position to develop consulting services for a variety of specific topics as the need arises and their potential catches my attention.

Digital, for example.

So … if Digital business strategy is a subset of the broader-based technology/capability-driven business model, which is the big deal, Digital, or capability-driven business models in general?

I’d vote for capability-driven business models, with this proviso: There aren’t many new business capabilities to develop that don’t require the use of new and interesting technologies.

But still, what matters (I think) are the capabilities more than the Digital technologies that enable them. The reason goes back to the ongoing, even accelerating trend of business temporal compression (AFG?). While it depends on what your business sells and who it sells it to, in many cases marketplaces are changing fast enough that traditional approaches to strategic planning just can’t keep pace.

As a general rule, the value of a capability will last longer than specific products, product lines, or even product categories. And so, building strategic plans around capabilities makes the most sense for many and perhaps most businesses today.

Take smart products and the Internet of Things (IoT if you want to be cool). Imagine IoT isn’t one of your capabilities, but a competitor has mastered it.

We in IT have become accustomed to products capable of detecting and reporting defects before they cause overt outages.

Imagine consumers start to expect all their major purchases to do this. This isn’t unlikely — customers might not be sophisticated about technology in all its gory detail, but they’ve become pretty savvy about what technology can do.

If you’ve mastered the IoT, you can add this feature to all your products fairly easily. If not, good luck — you’ll have missed a major marketplace shift.

Building a business that’s adept at detecting marketplace shifts early and adapting to them quickly will prove to be the path to sustainable success.

My guess is that Digital will part of the mix, because Digital technologies are what will give businesses the new capabilities they’ll need to adapt at the speed of customer expectations.

* * *

On an entirely different subject: I gave a speech last November at PhreakNIC in Nashville, about the Embedded Technology Generation and its implications. It isn’t exactly TED talk material, but if you’re interested, you’ll find it here.

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|In: Architecture|Last Updated:

“Digital” has replaced “Cloud” as the hot synonym for “Everything.”

No matter what a company plans to do and how it plans to do it, it’s now officially Digital.

Not that I’m a Digital skeptic. I’d just like, when we talk about “Digital,” to be confident we’re talking about the same thing.

Google a bit and you’ll find quite a few different accounts of why Digital is so important, along with several definitions, some of which, reprehensibly, make it a noun.

My favorite: Digital enables new business models. Examples include Uber, AirBNB, and Zipcar, all of whose “new” business models amount to being brokers — companies that bring buyers and sellers together in exchange for a cut of the action.

It’s a very new business model, certainly no older than the Phoenicians.

For whatever it’s worth (probably what you pay to receive KJR) here’s my take on why business leaders not only can’t ignore matters Digital, but have to embrace the subject. Truly Digital companies:

  • Observe: Constantly scan the technology landscape for the new and interesting.
  • Orient: Spend serious time and energy, at the executive level supported by staff analysis and modeling, investigating whether and how each new technology might turn into an opportunity if their company gets there first, or might turn into a threat if a competitor gets there first.
  • Decide: Far too many business executives and managers, and therefore whole businesses run away from the decisions that matter most as if they were rabid weasels (the decisions, that is, not the executives, managers and businesses). Digital businesses have to become adept at making fast, well-informed decisions.

And remember, it isn’t a decision unless it commits or denies the time, staff and budget needed to effectively …

  • Act: It isn’t enough to make the right decision and then either flail away at it or not actually do anything to make it real. Successful Digital businesses must execute their decisions, and with high levels of competence.

It’s OODA again. Digital businesses are built on OODA loops focused on the potential impact of new technologies. Not static list of specific technologies. New and interesting technologies as they arise and mature.

For Digital businesses the Orient stage has outsized significance, because many of us humans have a strong tendency to reject the new as either wrong or no different from the same old same old.

Digital businesses can no more afford to fall into that trap than the opposite extreme — dying from the shiny ball syndrome of chasing the next huge thing before giving the current huge thing a chance to succeed.

So Digital business have to establish methods, and not just methods but a supporting enterprise-wide culture, that let them go beyond the lip service of “that’s what we’ve been doing all along” to accurately recognize what really are familiar old concepts hiding behind shiny new buzz-phrases and what are truly new and important possibilities.

And none of this will matter if the company’s IT organization hasn’t figured out just how different the Digital world is from the standard collection of “best practices” followed by old-school industrial-age IT.

Recent history — how IT responded to two past transformational technologies, the personal computer, and the world wide web — illustrates the challenge. In both cases, IT ignored them completely until long after they’d become entrenched elsewhere in the business.

Why was that? Boil everything down and it came to this: When they first appeared, and for several years afterward, neither the PC nor the world wide web fit what IT did. They were out-of-scope, and outside IT’s current areas of expertise. CIOs didn’t know what to do with or about them, so it was safer and easier to declare them Someone Else’s Problem.

In the Digital era this attitude just won’t cut it because new technologies that can have an impact on your business are emerging faster than ever. Digital businesses need IT that provides technology leadership to the business, at all levels of the business, and at all levels of IT.

Technology leadership means more than just (for example) the CIO explaining to the other members of the executive suite how the Internet of Things represents a threat to the company’s current product line.

It means the IT organization knows how to recognize, research, pilot, and incubate new technologies. And, for those that succeed, how to integrate them into both the company’s technical architecture and IT’s organizational architecture.

All levels of the business and IT means the conversations between a help desk analyst and a workgroup manager about collaboration technologies are just as Digital as the CIO’s executive-suite conversations about the Internet of Things.

And are just as important.

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