Leadership Insights: Digital Transformation Challenges

Transcript

Mike Vizard: Hello, and welcome to the latest edition of the Digital CxO Leadership Insights series. I’m your host Mike Vizard. Today we’re with Laureen Knudsen, who is the chief transformation officer for Broadcom, and we’re talking about all the issues that trip people up as they try to digitally transform. Laureen, welcome to the show.

Laureen Knudsen: Thanks so much. Thanks for having me.

Mike Vizard: I think for every one project that we hear about, when everybody goes, “wow, that was awesome,” and applauds, there’s probably twenty more that didn’t quite get as far. And we seem to be struggling, again, with trying to figure out how to close the divide between IT and the rest of the businesses as it were, and this has been going on for some time. Do you think that’s getting better? Or how are we doing with this whole conversation about the relationship between IT and everybody else they work with?

Laureen Knudsen: Well, it’s interesting, I have the benefit of getting to work with a lot of our customers across the globe, as well as internally to Broadcom. And, you know, the companies that are getting it seem like they’re able to make great strides forward, really leapfrog. We have an international bank that we work with that like, within one year, did some amazing transformations across their entire company, which was you know is kind of unheard of – to do it that fast. And they’ve been really successful at what they’ve been doing. There’s just a lot of other organizations that are, you know, even though they have control over all of those pieces, they’re still not; they’re still really struggling to break down the final silos and get the data that they need to run the business and have the transparency into the product life cycles or into the value streams that they need to be able to really see what’s going on in their own company.

Mike Vizard: Is there something you see successful companies doing consistently that others are not? I mean, is there a best practice for digital transformation? Or is it just a matter of the right people at the right time?

Laureen Knudsen: I think the one big factor that I see is commitment. The leaders have gone and said, and they’ve committed, that we are all going to do this – that there’s not one team that is special that doesn’t have to do it; there’s not, right?  It’s not well, you can kind of do it, or you can maybe do it, or you can do this part, but not the others. They come up with just enough standards so that they can get the data they need to run the business without instituting overwhelming day to day micromanagement of teams. So I think there’s that balance, and then the commitment that the standards are the standards, and we are going to set them but again, not going overboard with what those standards are.

Mike Vizard: Do you think there’s a greater appreciation for software development, and the role software is playing in the business than there used to be as a result of these types of initiatives? Because for so long, I think a lot of organizations kind of looked at it as a cost of doing business. And now maybe they realize that, to a large extent it is the business.

Laureen Knudsen: Yeah, we’re talking to almost every company which is now admitting that they’re a software company, whether they’re normally known to create candy, or food or some sort of car hardware, a tractor, something like that – they all have a lot of software people more than they have the people that design and create the hard products. And so late to that end, that’s your differentiator, that’s what’s going to make or break you within your customer base in a lot of ways. And you know, how easy it is to do business with you. Whether you know, for all of your vendors, if you are selling something like candy, or products like that. So there’s really a lot more to software than there used to be, and there’s a lot more that people expect it to do. Because everybody’s armed with a smartphone. These days, everybody uses software every day. Everybody expects it to be an easy to use and easy to do business with you. And it’s supposed to enable it to make it easier to do business with you, not harder.

Mike Vizard: There is of course, this new term in the landscape called Value Stream Management. And it traces its lineage all the way back to lean manufacturing, of course. But are we starting to see software development teams and the business kind of having a more mature conversation about how to manage and measure the impact of software?

Laureen Knudsen: Right, exactly. And it really allows them to bring together the business and the software teams in one solid flow. So you can truly start to see the work from idea to customer value. And then you can roll data backups. So you can truly use data to run your business through that entire value stream. When the work flows smoothly through, data flows back up. And so it’s really a different way of looking at the whole organization, but it’s eliminating and taking care of those final problems, right? If you put in agility and you did a good job with that, if you put in your DevOps and did a good job at that, you got your delivery structure and your production environment set, there’s a lot, oftentimes still, a silo between the business and the tech team. So bringing those people together and having them all use the same idea, use the same values, and track to the same thing – they’re all successful together or fail together. I think it is really changing business in a lot of ways. And it’s really allowing value streams and companies that are using value streams to truly flow that work from end to end. And, you know, make things a lot more efficient and effective, and give them the visibility and transparency that they didn’t have before.

Mike Vizard: There’s a lot of dependencies between these projects that are not easily surfaced sometimes, especially for the business executives. Are we getting better and understanding that a delay to this project has the following cascading impact on not just other software projects, but ultimately, the revenue that might be expected for the quarter, or even into the future?

Laureen Knudsen: Right, in future quarters as well, I think it’s not only delays, but the the chaos sometimes created by needing to pivot or needing to throw something new into the pipe without realizing that means you have to remove something else. People plan on 100% of their pipeline being full, their development pipeline being full. And so if you do that, then you have nowhere to add or to adjust, or if the team’s run into a little something and like your point delay, it really can throw more than one project off, because there’s often people – we still see a lot of companies that are dividing people into parts, and providing and giving them to multiple projects at once, multiple lines of work or streams of work at once, as though someone can work on ten things at the same time and be really successful. So yeah, it’s pulling all of that together and really being able to see what happens, right? If I do make this change, I should be able to see the ripple effect that causes. So I know whether or not to do that again, right? And if you’re not getting the data to see those ripple effects, then there’s some part of your your value streams that you still need to tie together or make visible and transparent.

Mike Vizard: And a lot of times, it’s not about figuring out how to get the data, the data kind of already exists within our tools, it’s just a matter of pulling it together in some way that makes it surface actionable insights.

Laureen Knudsen: Well, one of the things that we were hearing that happened – the pandemic caused us to automate and digitize a bunch of parts of our organization so that we could do things electronically. Or maybe we could do some of that in person before. And so there were a lot of tools implemented, there were a lot of things put in place, but they were siloed. They were. So now we have all these data silos all over the place. And again, value stream management isn’t just about the process flow, it’s about all of those people working together to have the same value created for the customer. And the data flowing back and forth – breaking down the strategy, so that everybody through that chain that needs to work on that product, understands the strategy and has access to that information, and then the data rolling back up. So it’s the same data being used. Right now a lot of those companies are exporting things into spreadsheets, and then trying to align that. And there was one company we were working with that went and figured out just the disparate team level tools that they were using, how much it was costing them to roll up that data. And they themselves did the calculations of people’s time, and it was over $100 million annually. So that can have a pretty big effect when you’ve got those disparate tools. And you need to pull all of that, right. When you start pulling that together and having those software do what it’s meant to do. We’re automating the dashboards for you and things and using that same data throughout. And again, it’s another material impact your organization can use.

Mike Vizard: We said the IT team needs to know more about the business. And that’s probably true. But are we seeing changes on the business side where those folks are much more tech savvy than they used to be? And maybe we can all have the same conversation about the same thing at the same time for the first time.

Laureen Knudsen: Yeah, I mean, you need to at least, I don’t think you need to be truly hugely technical, necessarily, unless you’re creating a product for other technologists, right? So if you’re selling your products, your products are sold to somebody who’s technical -then, right, they need to be a little more technical, but a lot of product managers truly just need to understand what it takes to build their product. If they don’t understand the product lifecycle, the software development lifecycle, and what that really means, it does hamper them. It hinders their ability to plan well, to prioritize well, to understand, you know, risk and reward of any piece of work that you’re trying to put into the pipeline, and to really be able to even do like high level estimates for yourself, and based on what I’ve seen before, this is what this would take, and get them anywhere remotely close to reality. So I think having that value stream, where you just exposed more to the people doing – the whole flow really can benefit. It’s a great benefit to organizations as well.

Mike Vizard: Over the years, we’ve seen the emergence, DevOps, agile programming – all these things that kind of make it go faster. And the knock was always that it was slow, and it couldn’t keep pace with the business. But do you think, maybe at this point, the technology can change faster than the business can absorb it?

Laureen Knudsen: Yeah. But what we’re still seeing is that, oftentimes, and almost every company we talked to, that’s not monitoring this for themselves – the ask is somewhere between five and nine times what those teams can actually get done. And it can be thousands of people in those development teams, right? But we’re still seeing the ask far outpacing the reality of the situation. So we actually create charts for people that show what is getting done over like an 18 month period, what’s working progress over that same time period. And then what’s the ask going into the pipeline over that same period, and you can see the hockey stick of the ask, whereas the teams that are still improving late, and that really does lead to that opinion that nothing ever gets done. But it’s really the teams are very consistent and actually improving often. But what’s gone out of proportion is the prioritization in the ask.

Mike Vizard: So is that at the core of all this burnout that we hear about? Because the ask is so big compared to the capability, and everybody kind of just assumes that the resources are infinite. But maybe one of the upsides of value stream management is we can actually have an adult conversation about what’s feasible, right?

Laureen Knudsen: Absolutely. And, you know, one of the biggest benefits that I see people are implementing when they’re implementing value stream management, or one of the good benefits of it, is they put out the ask coming from the business. But the response is the capacity plan, like it’s a team of team level for that product, that often happens on a quarterly basis or something. So when that plan is done, that’s how much you can actually get done. So you can’t say the ask is reasonable, or has any semblance to reality or the estimates of that ask until the teams actually respond. So the people doing the work estimate what it’ll take to get it done. And only then can you really have, you know, have something that you can actually build on. And it can’t be like an 18 month ask, right? I don’t know what my life’s gonna be like a year from now. Right? None of us do. So how can you hold me to something that you’re asking me to estimate that far out? You never get good estimations, right? So it’s against that breaking it down into smaller chunks, it seems like some of those agile principles and putting small batches through the pipe, then I can start to show you what we can truly get done. But again, if your people are your main, you know, value flow, if all you have is people, then your capacity is your money – you don’t have money if everybody’s busy. Regardless of what they’re busy doing. If you have them busy doing something, your money’s gone.

Mike Vizard: What’s that one thing you see people doing over and over again that just makes you shake your head and go, folks if we don’t change this particular thing, we’re never gonna get to where we want to go?

Laureen Knudsen: I think one of the biggest things that still surprises me is visibility, and the lack of visibility. Because agile solved that, or should have solved that 20 years ago. And the fact that we’re still having people say there’s no transparency into their product lifecycle. It’s really surprising, right? They’re still doing the old waterfall version of the black hole of development, because they’ve got some disparate team level tools, and no real insight into what’s truly going on. And agility was supposed to be more disciplined than that. And so it’s supposed to provide you that data that as they break down the stories and the work is really broken down, the data rolls back up. And it should be done in a way that truly offers some of the best transparency into organizations and into what’s actually getting done, and what’s being worked on. And I see a lot of companies where that is still obfuscated from them – a lot of leaders that don’t know what’s going on. And there’s a lot of ways that you can. Yeah, there’s products out there that can help you kick in-line things right and roll up that data automatically on the back end.

Mike Vizard: Alright, folks, Well, you heard it here. If you can’t observe it and measure it, then you’re certainly not going to be able to transform it. Hey, Laureen, thanks for being on the show.

Laureen Knudsen: Thanks so much. So nice to be here.

Mike Vizard: And thank you all for watching this latest episode of the Digital CxO Leadership Insights series. You can find this episode and others on digitalcxo.com. We invite you to check them all out. And once again, thanks for spending some time with us.