Charles Darwin’s theory describing the “survival of the fittest” is alive and well in today’s business climate and can be aptly applied to determine which businesses are most likely to survive and which risk extinction. And, just as Darwin presented in his theory, the fittest does not necessarily mean the strongest. He proposed that to survive, an organism, or in this case, a business, had to be best “fitted” or best “adapted,” to its environment.
Think back to Blackberry, Kodak and Blockbuster– all very strong companies that did not adapt as the world quickly evolved around them. In the meantime, fast-growing newcomers capitalized on trends and even created new markets. Think Apple, Shutterfly, and Netflix.
More recently, COVID-19 and subsequent lockdowns have created a global business environment where the inability to adapt is an existential threat. We saw retailers ramping up to meet unprecedented demand for online services, automotive manufacturers shifting gears to produce Personal Protective Equipment (PPE) and financial services institutions shutting down their branches and adapting to survive without face-to-face interactions.
In all of these scenarios, it was smarter ways of working coupled with the adoption of new technologies that decided the winners. The companies with the most inherent levels of agility adapted and survived.
So, where does this agility come from?
Business agility is a factor of how fast an organization responds to opportunities and navigates dynamic market topographies. It is also one of the primary advantages enabled by Cloud technologies. With Cloud, businesses can spin up resources on-demand – from infrastructure services such as compute, storage, analytics and databases in order to service use cases spanning from laptops and mobile devices, through to the Internet of Things. Any firm can now deploy technology services in a matter of minutes and get from ideation to implementation several orders of magnitude faster than before, giving them the freedom to experiment, test new ideas and rapidly transform their business.
But digital transformation alone does not make a company agile.
Increasingly, forward-thinking companies have recognized that there are other important factors at play and that, in order to get the most benefit from their Cloud systems, they must also change their ways of working and drive cultural change. This includes open communication, collaboration, adaptation and trust across all parts of the business. They know this is the only way to realize all the benefits they expected from their transformation project, now and in the future.
Listed below are four cornerstones that can help a business to become a more agile organization and get the most value from its Cloud technology:
1. The business and IT must develop a symbiotic relationship
The most amazing thing about symbiosis is that the outcome can’t ever be predicted just by looking at the two entities separately. By bringing employees from different parts of a company together, problems or bottlenecks can be ironed out more easily.
Real-world example – Agile Teamwork at Vorwerk
Through workshops and meetings like “Design Thinking”, household appliance corporation, Vorwerk, enabled the discovery of compelling solutions, which customers can later apply in a creative and playful way. Vorwerk coaches its employees on the subject of so-called “refinements,” where the end-users’ requirements are questioned and thinking outside the box is cultivated.
In the Vorwerk change processes, employees then need to find new avenues of cooperation and provide space for new ideas.
2. Adapt working practices along with the technology
The process of becoming a digital organization provides learning opportunities for the business overall, including IT staff. Alongside embracing newer workplace methodologies and mechanics, such as DevOps, IT professionals need to learn more about businesses’ objectives and goals so they can help drive strategies and serve as an educational resource on technical matters related to delivering the desired outcomes.
Real-world example – Volkswagen is accelerating the transformation into a software-driven mobility provider
By rolling out its ACCELERATE strategy, the company will systematically prepare for the profound changes in the automotive industry in good time. Just as Volkswagen resolutely led the way with its global electric offensive, now it is also accelerating the other big issues of the future which include the integration of software into the vehicle and the digital customer experience becoming a crucial core competency. In implementing data-based business models, the company is seeking to attract new groups of customers and tap additional sources of income.
3. Maintain focus on the objective and desired outcomes
Steer discussions and reviews away from “what have you done?” and “how did you do it?” to “what have we achieved?” and “what impact have we made?”. Discussing how an employee is doing things is important, but ensuring the organization is clear on the effect each step has on achieving the overall goals and objectives is paramount.
Real-world example – Mercedes F1’s agile approach for winning
After Mercedes had dominated the field by winning both drivers and constructors championships one year, the team’s Chief Designer, John Owen, made the startling revelation that the car had been specifically designed to only achieve 90% of its optimum capabilities: “I set the objective to build a 90% car for 2017. It might seem strange not to aim for 100%, but the problem you face in any set of rules is that you can’t be certain of the challenges you’ll face along the way – how the rules evolve. There’s a lot of unknowns there, so you aim for a car that can cover as many different circumstances as possible and accept that it might not be the pinnacle of optimization.”
From the outset, the team adopted an Agile approach by introducing flexibility into the design and consequent construction of the car; meaning that they were able to cater to changing conditions as they developed.
4. “Business as Usual” is not the usual
Companies cannot afford to stand still. This applies to all parts of the business, including IT. There will always be calls for bigger/faster/cheaper and demands for continual improvement in order to dominate a sector or beat out the competition. And these enhancements now need to be delivered at lighting speed as they will likely be consumed on-demand from anywhere in the world.
In this climate, there needs be a careful balance of agility and stability. To be the fittest and survive, both your mindset and ways of working need to change from a “one off” project approach to a continuous improvement approach where innovation, or change, is constant yet controlled.
Real-world example – Adapting to new world realities
Since mid-2000, major companies around the globe such as Siemens, Mercedes, Walmart and GM, have started initiatives to adapt their business model to new digital requirements. Speed of change, and therefore the ability to adapt to new business models, is critical as digital native competitors like Tesla, Amazon and Delivery Hero have emerged to further challenge the markets.
While the most innovative companies are frequently technology-related, some of the most agile companies are not, including Lego, Barclays, John Deere, Lonely Planet and Moonpig.
When Barclays began its agile transformation, the financial services company already had scattered teams using an agile approach. But the company wanted to grow and integrate its agile efforts into a more effective unit. Within a year, more than 800 teams had converted to an agile approach, and Barclays saw a 300% increase in throughput. Equally notable, agile teams reported greater happiness, were often first to market with new products and were most able to quickly pivot in response to feedback.
Now back to where we started. Charles Darwin said, “It is not the strongest of the species that survives, it is the one that is the most adaptable to change.” If you’re not changing your working methods and behaviors alongside a commensurate transformation of your IT systems, then your company risks limiting the full potential of Cloud agility.
Making a technology infrastructure change is only one part of a successful transition to operating SAP on the Cloud. Aligning people, processes, technology and culture to new ways of working on an enterprise-scale are fundamental to delivering substantially higher benefits.