Data Strategy or Data Tragedy? Only a few letters in English differentiate these conditions, but there is a major difference in how organizations on each side live their daily lives, plan for the future, and adapt to constant changes they are facing.
Organizations that are living with Data Tragedy status are easy to recognize. They don’t have any means to communicate internally (or externally!) their current state of architecture, future development roadmaps, ownership of data or systems, and all change requests to the current setup (new source systems, new applications…) initiate an extensive investigation project, again and again.
People are stressed about change and there is no easy way to communicate internally with different stakeholders about IT and process development. Eagerness to develop businesses further is limited.
You don’t need leadership or plans to develop Data Tragedy, you just let things evolve over the years.
So, what is Data Strategy all about?
Data Strategy is the daughter of Business Strategy. It is vital to understand what the business wants to achieve now and in the future, and how data can help with these business targets.
Data Strategy is not about quick wins, it is about creating a long-term competitive advantage. Data Strategy includes also quick wins.
A comprehensive Data Strategy covers areas like improving decision-making, operational efficiency and data monetization. Collecting use and business cases is a necessary step when starting to formulate the Data Strategy.
It also consists of a longer-term architecture plan that can adapt to changes. AS-IS, transition and TO-BE architectures with source systems, integrations, operational and analytics systems and dependencies between different parts are needed. Architecture principles are created to guide the future development.
In order to facilitate the discussions between internal and external stakeholders, there might also be a need to create common and shared vocabularies and notions. “A truck” can mean different things to different persons.
In many organizations, the ownership of IT systems and data is not clear. A name on an Excel sheet listing IT systems is not equal to ownership. The concept of ownership (like owning a house or car) means, at least to me, that you take an active role in maintaining the quality of your asset. Data Strategy should also include this aspect.
When you want to harness new technological innovations to solve your business problems, competencies and skills start to play an important role. Technology itself is only 30-40 % of the whole business solution. The rest is about people. You can do magic with MS Excel if you have the right competencies in place. Understanding the needs of the future and the skill gap with the current knowledge base may lead to a need to hire new people, establish new roles and look outside the competencies needed.
When you know where you should go and what is needed, it is possible to draw a roadmap that includes both quick wins and longer-term opportunities. There will be, most probably, needs to verify the direction on a regular basis when the business environment changes. But when you have done your homework, it is business as usual – not an overwhelming task.
To conclude, creating a Data Strategy is not a “piece of cake” nor “walk in the park”. It will not happen by accident.
Creating Data Strategy is a serious exercise that needs strong commitment and leadership from the management board.
But as always, where there’s a will there’s a way.
I started my work on e-commerce development field more than 10 years ago from a topic of my graduation project in university. My choice was to develop a B2C store on the then-so-popular (in 2006) OsCommerce open source platform. The scope included a PIM for the OsCommerce engine, a few payment methods, shipping modules, etc.
I did an easy one, without various difficult integrations, without thinking about such important things as scalability, system performance or maintainability. Let’s say that system was monolithic, non-modular, difficult for any modifications, even from UI perspective, slow and inefficient. But the right choice was that I decided to do it using an existing open source platform.
After that, I used to work with a lot of different e-commerce platforms: wooCommerce, shopify, WP eCommerce, zencart, Magento, OpenCart, and I have practical knowledge and experience to compare them and recognize the evolution of each.
From those days, technologies have changed a lot. There’s a vast variety of new powerful e-commerce platforms available today, but only few of them are on the enterprise level and could be applied as enterprise for a large-scale businesses.
The leading companies who provide enterprise e-commerce solutions are SAP Hybris, Magento, Oracle and IBM. By chance, during the last 3 years I’ve been working on SAP Hybris projects and I can affirm that the evolution of this platform and the whole e-commerce direction is really impressive.
Moreover, based on OVUM predictions, in the nearest future the retail trends will be changing even more rapidly, so e-commerce platforms should be able to react to these changes appropriately. That’s why all of the providers/vendors are trying to move technologies and sell platforms like SAAS Cloud, which makes applications more flexible and independent with microservices, integrate AI and machine learning, etc.
It is absolutely natural that each business is unique from the perspective of business processes, workflows, company internal rules and regulations. That’s why platform providers/vendors should also maximize flexibility and make business processes configurable in their solutions out of the box.
The most difficult question for a company which has decided to create an enterprise online store is choosing whether to use an existing platform or develop their own solution from scratch. Enterprise platform is not cheap, but implementation of a custom solution can be even more expensive and, just as importantly, very time consuming.
SO WHAT SHOULD A COMPANY START FROM TO MAKE THE RIGHT CHOICE?
First of all, the company should do some research and identify levels of risk, the main goal of the future solution, scale, scope, schedule, technologies and budget. Besides that, the goal of the future system should be predefined from the very beginning for choosing best applicable application architecture and approach in general. The goal may change or the target may become clearer during the implementation phase. As a result, it will affect solution and processes, but not the fundamental things agreed on preliminary analysis, system analysis and design phases.
If we are not limited in time and budget, implementation of an own solution is the best and the only right choice. The result is that finally, we will have a 100% match for our business needs. Is it possible in real life? Unfortunately, this is very rarely the case…
TECHNOLOGICAL STACK AND DOCUMENTATION
Nowadays, e-commerce systems are very complex and multilayered from a technical point of view. By layers, I mean such system components as CMS, ERP, CRM, and the search engine, which should be integrated into one system and cooperate with each other.
Each layer may differentiate by their own implementation and technological stack. For example, CMS part written on Java or PHP, interacts with Oracle or MySQL database, with implementation of search through SOLR. Finally, this part of e-com CMS is integrated with some third party PIM, with SAP CRM and ERP. Technologically, to maintain such a system, a company should have an expert in each layer. Let’s talk about it later.
If we choose to use an enterprise platform, in most cases we are safe with new features, future updates, required level of performance, security and quality. Instead of implementation of specific features, we can use already existing modules, plugins, or extensions. API of those systems is very flexible and easily modified and reused. Such platforms as Hybris are well documented, and professional communities and forums with required information are widely available.
An additional benefit of platform use is that all of the layers are implemented on the same technological stack, all modules inside each layer are written in the same programming language, and stable and compatible frameworks are in use. So we are avoiding a mix of technologies and approaches on the project, which are incompatible with each other and potentially may cause big issues in future.
To allow systems to be integrated easily, the development of the system API should be planned from the very beginning. As we can see from the definition above, this is the most risky, difficult and unpredictable part of each enterprise system. Most of the platforms provide their API’s for integrations and default integration mechanisms. It reduces the potential level of risk somewhat, but still this is the most difficult phase of enterprise system development.
The implementation of a custom solution requires mature, high-skilled people who are experienced in similar kinds of development. Finding the right person who will work efficiently as a team player can be very challenging. At this stage, any lack of coordination and organizational skills will slow down the development. Furthermore, the cost of disorganization and inability to work together can be very high. Thus, meeting a tight deadline is impossible. Please note, that I haven’t even mentioned any application design mistakes people may do unintentionally, which happen very often in enterprise system development.
For a platform customization, we need mature and qualified people as well, because developers have a lot of possibilities to implement the same functionalities and features in different ways in platforms like Hybris. But they need to choose the most appropriate one, which will fit the current solution and comply with requirements.
Time is something very difficult to estimate and it’s very important to do this estimation properly. For each enterprise solution, the scope may vary rapidly, and change requests happen very often. Adaptability for market changes plays a key role in business, and it is very important to be on time and faster than your competitors.
So, developing your own solution may be too risky to choose and extremely time consuming. When using a platform, go-live with basic functionality and a team of 7 people is possible in 3 months. By basic functionality, I mean product catalog, product variants, simple promotions and order placement.
If time is difficult to estimate, the case with budget estimation is even more difficult, because budget depends on development time and time is an unknown variable. And just imagine the time we need to design and test an enterprise e-commerce system! Collecting requirements, analysis and design, and testing may overrun the budget for the full project.
For a platform, we just need to customize it for the company business processes. That’s why calculation of the budget is much easier in this case. We need to take into account the license cost and estimate the development efforts for platform customization due to customer needs.
FUTURE CHANGES, TESTING, SCALABILITY AND PERFORMANCE
Let’s imagine that we are done with our own B2C system development, and after looking at the positive and increasing statistics of e-commerce sales, our company has decided to take the next step and extend the system for a few more countries. This is something we should probably do from the very beginning of the project, but in practice, we would need to start development of a new system, because the scope of changes will be equal to the whole previous development.
Furthermore, the count of end users of the system is very underestimated and it affects the general system performance in the near future. Is it possible to modify existing application architecture for increasing system performance later on? Yes, but the scope of changes is huge.
What about testing and continuous delivery? Testing is my favorite topic 🙂 And as we previously discussed, most projects are multilayered, and connect a big amount of integrations with third-party systems and existing legacy systems.
In the case of our own custom solution, we should do unit testing for each separate module, integration testing for validation of modules integration inside of each layer, system testing of each layer, and finally regression testing of subsystems cooperation and the system behaviour as a whole. Lack of testing may cause financial loss and loss of company reputation. So the company needs to do testing as quickly as possible and satisfy the required level of solution quality, or do not change anything.
Rapid market changes require on-time and direct actions, that’s why changes and modifications of e-commerce solutions quite often are the real-life case. As a result, we need to apply regression testing for all the stages mentioned above.
The main benefit from using a platform from the QA perspective is that we do not need a testing platform itself. We need to test only specific changes/modifications done by us to be sure the whole system works properly. That gives us better dynamics, stability and possibilities for quick changes and continuous delivery.
Maintaining a system or any system layers is not an issue if we are a product company and we have all the required skillset on board. But what to do if we are a company which developed a system with external resources and switched from the development stage to maintenance?
From the business point of view, it is expensive and inefficient to utilize the whole team in the maintenance stage. Companies are trying to minimize maintenance costs by using only a few persons, or even switching to a third-party company. It will also require a wider set of skills and people to maintain the system if it was developed from scratch with different technologies.
With platform usage, it is much easier to maintain the system because the company just needs a person who has the experience in development or maintaining the specific platform.
As a conclusion, only a few companies in the world have succeeded with their own implementations, I mean such companies as Amazon and Rakuten. If a company needs to go to market fast with the lowest level of risk, I’d recommend to select a strategy of development using an e-commerce platform.
Some statistics regarding leaders in e-commerce platform development can be found by the following links:
I travelled to The Silicon Valley to see for myself what it is all about. In hindsight, perhaps it was a kind of energy vaccination against lethal opportunity myopia. During a turbo-charged week of meetings, I met dozens of people and got to see and feel The Valley first hand.
Now I try to answer questions like ‘So what?’ What are the exploitable learning points? Is my inspiration transferrable?
It would be naïve to expect that one can just smuggle handful of The Valley soil back home and expect that planting your local seed in it will change something. You need to make a couple of conversions back to the metric system to see if you can translate something into actionable learning points. There are a few I found useful to work on.
“Shit. I know shit’s bad right now, with all that starving bullshit, and the dust storms, and we are running out of french fries and burrito coverings. But I got a solution.” – President Camacho
1. Attitude& mind-set. I think this is the essence of The Valley and it comes in many forms: relentlessness, entrepreneurship, can-do, positivity/optimism, laid back, cooperativeness/openness, curiosity, competitiveness and pragmatism. I think you might need to seek fulfilment intrinsically, but I bet if you import The Valley attitude into your guidance system, you will open yourself to new opportunities.
Tip: Create an alter-ego – your valley-character who has the above traits. Mine is Mike. Whenever I question myself, my demeanour or my decisions, I’ll check what Mike would do in the same situation. A check-list of sorts.
2. Think Big. This is my favourite. It is not so much about daydreaming as it is about what kind of questions arise from raising the bar ridiculously high. It has a kinship with attitude, but I like to keep it separate. What would need to have happened if my business is 10x..100x…1000x in 10 years? This is about “if I was to start my business today, what it would be about”. It is about removing your mental barriers (“we can’t because..”) and giving room for inspiration.
Tip: Create an outrageously bold news headline which is published 5 years from now in a leading business journal: “your business has grown 100x” or “your business has just become number #1 in the global market”… For added impact, make a mock version of the cover page with your people on it. Have your management team answer the question. Have them explore what must have happened to make the headline true. Don’t be surprised from the fresh insight you get. Of the new questions. Of the new energy.
3. Focus. Focus. Focus. And one more time focus. This is not really new and actually a no-brainer, but actively executing on focus is much easier said than done. Successful gaming companies do this all the time. In its purest form, streamlining your efforts and maximising your business aerodynamics is not easy. You need consciously decide to let go and terminate things you might have spent valuable time on. A milder form of focus is prioritization. This is a little easier, and can be applied to just about everything.
Tip: Deserted Island routine. If you were stranded on a deserted island in the middle of a shark-infested ocean of endless opportunities, which one single piece of your business would you take with you with which would have the best chance of survival and success.
4. Perfect pitch. Instead of avoiding interaction and dazing at your shoelaces, find your way to situations where you get to pitch. It is a privilege. A good pitch is an excellent short story. Really short. Really excellent. And make it a story, because stories are loved and they are remembered. Expect the span of attention of your audience to be about 30 seconds. If they are still with you, you get another 30 seconds and so on… And you need to get your story told in 90 seconds. Make every word count. It is about simplifying complex things into something you can easily explain.
Tip: Really do it. And repeat. I recently volunteered to pitch at a business summit in front of 100 young talents. I was given 3 minutes to convince them to apply to work for us. Learning to swim in the shark tank (and survive unscathed) is a precondition for surviving in today’s business world.
5. Purpose is one today’s big buzz words yet so fundamentally important. The most iconic and the most successful Silicon Valley companies have been purpose driven. Purpose is atomic energy and helps you get through when the going gets tough. In a company which is not genuinely purpose driven, it is sometimes hard to identify purpose, other than the obvious financial purpose of rather making money than losing it. I believe that it is worthwhile to explore purpose and expect it to uncover some new thinking.
Tip: Don’t fool yourself. Not all companies have a meaningful or noble purpose. The likelihood your company already has one is not that high. You can try to retrofit a purpose to your business, but most likely it will not be convincing or shared by your people. Then again, you might have a purpose, but you just haven’t articulated it because it hasn’t been on your agenda. If you know why people choose you, that is likely to be related to your purpose.
Other stories inspired by the visit to The Valley:
What is innovation? One definition is that innovation equals creativity + execution. An idea alone carries no value if you are not able to actually turn it into something and scale it. If The Valley is about investors, it is just as much about innovation. They are in symbiosis. And everything is about scale.
“The day before something is truly a breakthrough, it’s a crazy idea.” – Peter Diamandis
I travelled to The Silicon Valley well prepared, or so I thought. I wasn’t really surprised by the scale of things and I also knew to expect that thinking bold comes as second nature. Still when Facebook laconically explained how they will build internet access with the solar-powered drone Aquila to those 4 billion people without Internet (of whom 50% don’t even know what internet is), I couldn’t help noticing my own awe.
Not about the fact that the drone’s wingspan exceeds that of a Boeing 747 and still weighs less than 400 kg. Nor about the positive arrogance of “if there is not enough internet, let’s just make more…” But of the laconic tone of the narration – of course we will do this because we need to. And because we can.
The wilder the innovation, the more I admire the innovator. Can you learn to become an innovator? There are lots of books and articles about how to innovate.
Based on what I heard from the start-ups, grown-ups and scale-ups, this is my list for everyone who wants to be a valley-style bold innovator
Don’t limit your thinking. At all. Innovation comes from everywhere.
Challenge fundaments. If you need to design a driverless car, start by asking what is a car, what is a driver, why do you need one, who needs one…
Focus on the user. The modern user expects nothing short of fast, simple and magical.
Launch and iterate. Launching a minimally viable product will steepen your learning curve and accelerate your pace to the final product. Share and learn.
Design for scale. Think 10X, think global
Share and learn. Think ecosystem, show and tell,
Fail well. This is the combination failing fast and learning fast
Have a mission that matters. The bigger the problem that you’re are solving, the bigger and more meaningful the solution. Going on a mission attracts passion.
C’mon everybody, let’s start innovating disruptively! Easier said than done. Where to start? I would look into design thinking, which is a creative strategy for designers and it is the current mainstream innovation approach.
“Design thinking is a human-centered approach to innovation that draws from the designer’s toolkit to integrate the needs of people, the possibilities of technology, and the requirements for business success.” – Tim Brown, CEO of Ideo
The centrepiece of design thinking is almost too obvious – The Human Being. This is paramount to keep in mind and looking at some of the so-called innovations, this is forgotten far too often. And too often we come up with inventions and call them innovations.
Design Thinking captures the essence of these top principles into four distinctive phases:
Inspire new thinking by discovering what people really need
Push past obvious solutions to get to breakthrough ideas
Build rough prototypes to learn how to make ideas better
Craft a human story to inspire others toward action.
“That ain’t workin’, that’s the way you do it – Money for nothing and chicks for free” – Mark Knopfler
There is a certain primal simplicity about design thinking, which I like. Instead of looking for something universal, look for something small, which has huge scaling possibilities.
One of my favourite innovations is the paper clip. It dates back to the 1860’s and in spite of various attempts to improve it and make them from other materials than metal wire, the original Gem paper clip is still in use 150 years later. It solved a very true yet simple problem – and very simply. Manufacturing cost was miniscule and scale was genuinely global. It was a very creative invention combined with broad execution.
Other stories inspired by the visit in The Valley:
The amount of venture capitalist (VC) money in the US was 62,8 billion in 20161,2. The Bay Area alone collected 45% of this and the rest of California another 10%. For comparison, the state budget for Finland in 2017 was just short of 50 billion euros.
“Money, money, money” – Benny Andersson, Björn Ulvaeus
The Valley and San Francisco is like a candy store for venture capitalists. There are so many start-ups and emerging businesses to choose from, one really needs to find ways to select the best ones. There also many venture capitalists in The Valley, but fundraising is very competitive. Compared to less competitive markets like Utah, San Diego, Maryland, Georgia etc. where there are roughly 1,5 VCs per company, there are only 0,5 VCs per company in The Valley.
Are you in the right industry for an investor?
In 2016, 13 VC-backed US unicorns were born – by the end of Q2, there were already 12 new-born unicorns in 2017. What are all these unicorns doing?
Assuming San Francisco is a reasonably valid indicator of where the global investment focus is heading to, get this: the Internet, mobile and telecommunications industries account for the loaf (70-80%) of the investments in 2013-Q2/2017. Healthcare trails next with a slice of 10-15%, software (non-internet/mobile) and hardware scrape up 3-5% of the crumbs.
The Silicon Valley is not quite as skewed. The Internet-industry investments alone are collecting about a fourth of the wallet and the other top five industries trail behind fairly evenly at 10-15% each1.
Especially start-ups don’t have a track record, so investors need to understand and estimate future potential and possible earnings. What do they look for2? And how should you be prepared?
They are looking for couple of things – always be prepared to pitch
Make it come natural, rehearse it, get it right. If can’t make your story compelling 30 seconds at a time, you will not make that first impression count. Your first impression makes the difference between making it or breaking it.
Addressable market & 10x opportunity
The addressable market needs to be big enough and opportunity needs to be equally big. The business model needs to be scalable and the go-to-market plan must be clear. This would be the first 30 seconds of your pitch.
Stunning Product & Magic
The next 30 seconds of your pitch should be about your product. What VC’s look for is a huge pain-point that your solution heals. It needs to include an obvious uniqueness. Preference is that you have evidence that there is already some market traction.
VC’s want to see talent and ambition, superior technical skill sets and business acumen. Visionaries need to show evidence of execution.
A clear Ask – How much and what do you need?
To close your pitch, you need to be able to formulate your ASK. How much do you need? What else do you need besides money? What will you use the money on? For how long do you need money for?
Focus. Focus. Focus.
There is no room for blurred fringes in what you do. If you have too many ideas, scrap most of them and if possible, just focus on one. Concentrate all efforts on the one bold idea, which you think can really make it. It shows you are able to prioritize and it makes your pitch and your ask lean and mean.
The honeypots and Bumblebees
We went one evening to Rosewood Hotel bar in Menlo Park, which on Thursdays was reportedly the place to be. It is located coincidentally or not just off Sand Hill Road, which is the address of most of the VCs.
Lots of hustle’n’bustle and flirting and you have the whole spectrum of start-ups, scale-ups, grown-ups, entrepreneurs, in-between-jobs (not has-beens but perhaps fast-failers), VC’s, rising stars, shootings stars and wanna-be’s. Kind of like Thursday evening at “Kalle”, the thursday-evening iconic flirting hot-spot in Helsinki, but then again, not at all. Not even close.
While waiting for your beer at the bar, you will get to pitch your business once or twice. When you mingle around and get introduced, you get to pitch again a couple of times. When you bump into someone, you get to pitch. You don’t have to – you get to. People are genuinely interested about what you are about, why you are there, about your dream and your 1-2-3 pitch.
The analogy with flirting and pitching is not far-fetched. The basic idea is the same: suggest interest in a deeper relationship and you if don’t succeed in 3 minutes, the game is probably over.
PWC MoneytreeTM report Q2/2017
Alliance Venture presentation – Investor in residence perspective, Arne Tonning
Other stories inspired by the visit to The Valley:
“Silicon is the eighth most common element in the universe by mass, but very rarely occurs as the pure element in the Earth’s crust.” (Wikipedia). There is something rare about Silicon Valley as well, but what exactly? That is precisely is what I sought to find out. Read about why I decided to go.
What makes The Valley what it is?
Springboard of leadership & talent
There is a huge source of thought leadership and talent in The Bay Area. Leading schools like Stanford University, Berkeley University, Singularity University and UCSF attract an immense amount of potential and provide a spring-board for talent to find their ways to the most promising giants like Google, Facebook, Apple, HP not to mention the bustling start-up scene.
Ecosystem and density
The Valley, measuring from San Jose in the south to San Mateo in the north is no more than 50-60 kms in distance, give or take. In addition to thousands of start-ups (combined with San Francisco), the valley is home for 40 headquarters in the Fortune 1000. There are hundreds of thousands of qualified talents squeezed into an area the size of Uusimaa.
“Capital isn’t scarce, vision is.”
Money. Money. Money.
50$+ billion of venture funding money in the entire US, about 80% was invested in The Valley. Another 5% in the rest of California and the remaining 5% in the rest to the country.
From an investor’s standpoint, the opportunities are almost limitless. The efficiency in investing is mind-boggling. All you need to do is walk around and almost everyone you meet is either and investor (many of them) or an investee (most of them), pitching their stories and their asks. It is a non-stop Slush event…
You need to be there to be able to play the game. Competition in the Valley is a paradox. On one hand, to be able to tap into the massive funds and to get the best talent, you need to be on the top. Someone said that a fair analogy is that of the Olympics – you need to be a gold medallist of your discipline to succeed in The Valley. Nobody will remember silver medallists. On the other hand, there is very strong culture of collaboration, cooperation and paying forward.
Pay forward and give back
In spite of the competitive environment, everyone bow to openness and helping each other out. You hear pay forward here and again. It is a mantra that is understood by everyone. Help others because there will come a day that you will need help. You also hear about giving back. If you succeed, help others to succeed and don’t forget who helped you succeed. Don’t forget your scholars, those who helped you along the way anyone without whose help you wouldn’t have made it yourself.
Thinking big is no longer good enough, you need to think HUGE. Nothing is impossible. Magic is normal. You need to wow everywhere. When you think about doing something – anything – you should always think about what impact this will have. You need to thimpact. If there is no foreseeable impact, just don’t do it.
Clock-speed & culture
What is so different in The Valley? I just tried to explain the more visible reasons why The Valley is what it is. Perhaps more important is what is not so visible to the naked eye.
This is something a little hard to explain also, you need to witness it yourself. There is a built-in ‘sense-of-urgency’ attitude. If you see there is space ahead to move, you need to advance. Impatience is a virtue. Standing still will kill you. Mario Andretti once said it well: “If everything seems under control, you are not going fast enough”. Facebook’s motto coins this as: “Move fast and break things”, which is synonymic to learning fast.
For me, it was a cocktail of can-do attitude, entrepreneurial spirit, “clock-speed” and networking. This was probably the biggest eye-opener and the hardest attribute of The Valley to really internalize without seeing it personally.
It is about working from a garage and rejecting neckties. It is about not complaining of the workload. It is about failing well.
“Never confuse motion with movement”
So was my finding that The Valley is truly unique? Well, yes but…the start-up of the start-up scene in post-Nokia Finland has some similarities. It is still in its infancy, but e.g. the annual Slush megafest gathers about 17.000 attendees including 2.300 start-ups, 1.100 investors and 600 journalists. Interestingly, Finland also has a “Bay Area” – Slush was born in in a former cable factory in Ruoholahti (Grass Bay), Angry Birds’ nest is in Keilalahti. The new start-up community house Maria 01 is located in a former hospital campus on the brink of Ruoholahti and has a vision to expand 10X to have over 100.000 square meters of space.
The investors represent at total of 60 billion euros of capital. The momentum has been building and gaining weight. The event has now spawned to Shanghai, Tokyo and Singapore. Finland has pegged itself on the map of potential hot start-up environment especially in the tech-space. In Helsinki alone, there are an estimated 740 start-ups with the total collected funding (last 12 months) of a fairly modest US$185 million.
Finland’s unique start-up movement
There is a good article in Forbes, which identifies Finland’s start-up movement and its originality. The article raises some interesting points about the attitude attributes with which I have no problem concurring with: simplicity, resilience and confidence.
Most of the visible success and evidence of making-it still come from the gaming industry. The mind-set and guiding principles of how this industry has developed is being shared to other industries, to companies small and (especially) large and in any given business extravaganza, you will have the now iconic gaming CEO’s telling about their rebellious leadership mantras and what they have done or left un-done to accelerate to hyper-growth.
At the helm of a successful IT company, I am exposed to a lot of technological breakthroughs and a large number of successful companies who we are helping navigate their way towards a more digitally enabled business.
By We, I mean the all the talented professionals who Stand For More at the customer – frankly it is humbling. Business is running smoothly and the outlook is promising so more than ever, it is important to have some sort of peripheral vision and try to see beyond the horizon, have your ear on the ground to predict possible stampedes.
“Talk about a dream, try to make it real” – Bruce Springsteen
Internalization & Immersion
Whether it is war, famine, floods or economic growth in China, to fully appreciate and internalize certain phenomena, you need to me immersed in it – see and feel it first-hand. The pace of change is accelerating and it is amazing how this change is impacting business and technology. The internet is almost in every pocket. And the absence of the internet is a roadblock for running a business. It is also the precondition of hyper-scalable business. The dotcom is has been a new normal now for almost two decades. How has this changed things? Some staggering facts:
In 1960, the average age of a fortune 500 company was 60 years, by 2020 it will be 12.
Since 2000, 52% of the names on the fortune 500 list have disappeared, by 2027 it will be 75%
Three months after Kodak filed for bankruptcy, Instagram and its thirteen employees were bought by Facebook for $1 billion
90% of data has been created in the past 2 years
1,7 megabytes of new information is created, every second, by every human
For a tech company like us, a relevant context is the innovation space in the Silicon Valley. It is central to technology development and what is still hype here in the marketplace, in the Bay Area, it is very much reality.
An opportunity to visit Silicon Valley presented itself and so I hopped on the bandwagon and spent a week in The Valley to make observations, seek inspiration and immerse myself in the wonderland of start-ups, technology, R&D, innovation, entrepreneurship. And venture capitalist (VC) money.
“It’s tough trying to keep your feet on the ground, your head above the clouds, your nose to the grindstone, your shoulder to the wheel, your finger on the pulse, your eye on the ball and your ear to the ground” – proverb
Finnish Cuckoo in Palo Alto
The backdrop for this excursion is our local business environment. Finland has been frantically struggling to keep pace in the competitive business environment. Meanwhile, the seemingly suicidal and protectionist labor unions have done their utmost to build barricades and roadblocks to curb growth. The government (in this context the opposition) has been pursuing a visible increase in the nation’s cost competitiveness and launched what we call KiKy (collective cost competitiveness agreement) entailing a daily 6 minute increase in working time with no extra pay. This adds up to 24 hours more work per capita per year. Awesome.
By the way, in English this hack agreement is pronounced Cuckoo. In theory, this productivity placebo might have a microscopic impact on those few who still work alongside conveyor belts. In practice, it is largely patching the Titanic with toothpicks and bubble-gum. Many insightful businesses have realized the irony and have admirably adhered to the CuckooTM agreement by spending the new six minutes on champagne and yoga.
When I told people in Palo Alto about the CuckooTM agreement, they thought I was kidding. So we should expect that the six minutes will make a difference? And that we seriously think we have a cost competitiveness problem? Is it the midnight sun or the long dark winter that triggers these delusions?
Can the buzz that is associated heavily with the start-up scene and hyperscalable businesses somehow be injected into the broader business environment? Could there be other ways to synthesize entrepreneurism? Are there learning points we could translate to our environment?
Poznań, dnia 21.09.2017 – Spółka Bilot przeprowadziła w miesiącach od kwietnia do lipca br. badanie wśród 500 największych firm w Polsce. Celem badania było określenie obszarów i potencjału transformacji cyfrowej w polskich przedsiębiorstwach, a także określenie jakie zadania i wyzwania stoją przed Chief Digital Officer (CDO) w niedalekiej przyszłości.
Zgodnie z wynikami badania funkcję Chief Digital Officer oficjalnie pełni tylko pięciu respondentów. Kolejnych 67 odpowiada za działania właściwe dla CDO, czyli za cyfrową transformację, choć ich stanowiska zostały nazwane inaczej.
„Cieszy to, że ponad połowa badanych, których można określić skrótem CDO, należy do zespołów zarządzających i współpracuje z kierownictwem. Ci ludzie współdecydują o kierunku rozwoju firm” – wskazuje Paweł Stapf, dyrektor rozwoju biznesu cyfrowego w spółce Bilot.
Jak wynika z raportu „od CDO oczekuje się innowacyjności, która obejmuje nie tylko gruntowną wiedzę technologiczną, ale także doświadczenie biznesowe”. Problem w tym, że otwartość na zmiany, kompetencje i praktyka (co drugi CDO pracował wcześniej w IT) mogą nie wystarczyć. Według sondażu 36 proc. przedsiębiorstw jeszcze nie ma stałego rocznego budżetu na transformację cyfrową, a 39 proc. uczestników narzeka na brak zasobów wewnętrznych i zewnętrznych.
Jaka jest rola CDO w obszarze cyfrowej transformacj? Około 40 proc. menadżerów zajmuje się opracowywaniem i rozwojem modeli biznesowych, 27 proc. kieruje transformacją cyfrową a ponad 20 proc. opracowuje i rozwija usługi cyfrowe. Według raportu 70 proc. badanych chce pozyskiwać wiedzę na temat nowości technologicznych biorąc udział w sympozjach i konferencjach.
„W rozmowach z Klientami, często padają pytania o sens cyfrowej transformacji, jeśli przy aktualnych nakładach na IT, uzyskuje się zakładane marże. Rekomendacją Bilot, w takim przypadku, jest szersze spojrzenie na środowisko IT, tzn. z perspektywy inwestycji a nie tylko kosztu” – odpowiada Mariusz Papiernik, prezes zarządu Bilot w Polsce.
„Dobrze przemyślana mapa rozwoju biznesu uzupełniona rozwiązaniami technologicznymi może dodatkowo zwiększyć wspomniane marże oraz inne wskaźniki biznesowe” – dodaje.
Na bazie tych wypowiedzi, można wnioskować, że wszystko zależy od tego, kto zostanie postawiony w centrum zmiany – jeśli będzie to mający poparcie w organizacji CDO, dysponujący budżetem, cyfrowa transformacja zakończy się sukcesem.
You have just spend the last 2 months doing as-is analysis with your trusted implementation partner. All 800 requirements needed for your digital transformation are now clearly defined and understood by all parties. The 1,5 year project, starting with a tight 6 months design phase is ready to start with the first set of process workshops scheduled right after summer vacations. What could possibly go wrong?
Well now days the constant and rapid change in modern technology and new disruptive business models are making new solutions a moving target and long projects with big upfront planning, long design and build phases produce end results what are already outdated once complete. Modern technology and business problems require a modern touch on managing them.
1. Adopt a new mindset
Everything starts with a change in the mindset of how new possibilities are approached. It is impossible to know the future so accept the uncertainty and forget long planning phases and deep requirements gathering. No matter how much time and effort you put in planning and defining the scope and requirements before hand, the one thing that still happens almost every single time is that something changes or something has been missed and there is a need to change the plan. And usually the later that need for a change is found the more it costs.
So if you really want to make change possible then the first thing to do is to forget extensive upfront planning and requirements fine tuning. Instead accept that you do not have all the requirements or the answers in the beginning and focus on getting the ball rolling and adapt based on findings.
2. Smaller problems
Uncertainty brings with the possibility to make mistakes and mistakes are an excellent way to learn, but if you do this too slow then you might spend too much time in getting to the problem and don’t have enough time to solve it.
When building innovative solutions start small and think big works better than going all in. Smaller problems give you room to fail fast, but more importantly solve fast. Failure is important and helps to learn and understand, but the focus still needs to be in the problem to be solved.
Instead of spending allot of time in long and large problems, break them to smaller pieces and try to solve them fast. This gives you allot of more room to operate.
3. Let go of control and say yes
Nothing kills creativity like too much control. With a detail plan it feels natural to ensure that everyone sticks to the defined plan so that nothing goes wrong, but when it does then only the man with the plan can… well change the plan.
The key is in autonomy where the book Drive, by Daniel Pink works as a great reference. Companies what are letting go of control and offering autonomy are outperforming their competitors. Best performance and results are achieved when people and teams have autonomy over what they do, when they do it, who they do it with and how they do it.
So when you stop doing extensive planning, you also need to stop controlling the work and admit that you do not have all the answers. The best thing to do is to just say yes and give the control and the responsibility to where it best fits. To the people who do the actual work.
Even when moving fast it is important from time to time stop and reflect on the work what has been completed so far and on the problems what have been found. In a transparent way, together with people who do the actual work plan improvements based on what you have learned and try to build an environment where constant improvements are possible through regular inspection and experimentation.
5. Put your money where your mouth is
I think the old saying, put your money where your mouth is fits in the end quite well. There is no point in talking about innovation, creativity or agility if you do not actually invest in it. I mean how many disrupting companies have achieved what they have with as-is processes and investing in ‘industry standards’ and the known. Committed stakeholders and a budget to actually spend is an absolute must, so convince your stakeholders to actually reserve budget for innovative development. Even if the results and benefits might not be clear from the start, but with a small initial investment and fast iterations it can be quickly validated if an idea or a solution is worth investing more. You just might be pleasantly surprised with a better Return of Investment in the end.