Category: Knowledge article

‘First organise, then automate’ is the common saying. In practice, these are intertwined, resulting in standardising and thus adjusting processes in combination with – and often in parallel to – setting up your IT landscape based on ‘best practices’. In other words, ‘stick to the standard’ when configuring your IT systems. The supporting business activities, such as finance, procurement and HR or, in short, the business domain, are ideally suited to properly and uniformly set up the automated support based on standard ‘ways of working’. Organizing systems according to unambiguous working methods, which are often inherent to processes within these functional domains. For IT systems, this generally leads to a relatively quick implementation and a lower management burden, and thus to a better TCO. In terms of attention – and therefore capacity and budgets – the focus can be placed on supporting the primary activities, often aimed at the customer or end user. In the context of multimodality, Anderson MacGyver refers to this as ‘commoditizing’. 

Uniform processes go hand in hand with a ‘best practice’ configuration of the IT landscape 

Commoditizing, especially in the business domain, is part of Anderson MacGyver’s MultiModality analysis, and helps to realize the aforementioned ‘fit for future’ configured technology. As mentioned, commoditizing primarily concerns supporting business activities such as Finance, HR and Procurement. In this new dynamic, a ‘fit for future’ design of the IT landscape is crucial: a stable basis that is also flexible enough to be able to innovate in a customer-oriented way. 

The available technology to support these uniformly arranged processes are generally called business solutions. In other words, integrated platforms such as ERP systems or best-of-breed solutions for, for example, debtor management, invoice scanning and matching or advanced procurement solutions. In principle these business solutions offer in the standard perfectly suitable functionality. Processes should be adapted to the standard in the business solution instead of customizing the systems to those processes. 

In short, unlike what is often thought, the technology is not the starting point for such a transition. On the contrary, you can only think about appropriate IT from the perspective of coherence when business activities, operations and organization have been assessed. Ultimately, commoditizing comes down to making conscious choices aimed at uniforming processes, and thereby optimally organizing the IT landscape based on the ‘stick to the standard’ principle. In that sense, commoditizing supporting activities is an important step towards being future proof. 

Three practical examples: commoditizing in the installation industry, the logistics and the education sector 

Three examples from our consultancy practice illustrate what value commoditizing can bring to an organisation. Based on assignments for clients from three different sectors that have started or have carried out a landscape renewal based on the principle: uniforming back-office processes, and thereby staying close to the standard in terms of designing and configuring the IT systems. 

1. The installation industry is characterised by growth, some of which through mergers and acquisitions. This often leads to new forms of service provision. For the sake of efficiency (operational excellence), these dynamics require centralization of the supporting activities in particular. This also requires a certain degree of standardization in the primary processes in the form of standard work packages, and the selection and design of ‘fit for purpose’ IT solutions that can optimally support these processes without much customization. The large concerns that arise from these merger and acquisitions create economies of scale by centrally organizing and arranging processes for procurement, HR and finance, such as financial administration, debtors and creditors, and then support these functional domains in the solutions in an unambiguous way. 
2. Logistics services face a shift in primary activities due to increasing online shopping and the associated home delivery. Various value chains are served here: BtB, BtC and BtBtC. With a focus on customer intimacy, this results in separate business units per customer group, which must be efficiently supported from centrally, uniformly designed processes and systems for domains such as HR, finance and procurement. 
3. In the education sector, new parties can offer modern, competitive educational concepts much faster through digital platforms. The answer of the often strongly decentralized universities and colleges is to unambiguously adjust processes and systems for administrative business operations in order to be both distinctive and efficient. Commoditizing based on uniform solutions and processes where possible, and customization aimed at the education market where necessary.

How to get started on commoditizing your business administration processes? 

IT systems are not the starting point for a commoditizing transition. On the contrary, you can only consider appropriate IT from a cohesive perspective when business activities, operations and organization have been thoroughly assessed.  

Differentiation is particularly important when standardizing the business administration domain. By assuming that all activities are generic (‘green’) and at the same time paying attention to activities that must be specific to the market standard (‘orange’), you gain benefits where possible and at the same time stay as close as possible in terms of technology the standard. 

Optimally supporting activities with IT requires a fit for future IT landscape. Such a landscape is crucial in this new dynamic. Not every business activity requires a similar solution. The IT that supports the primary processes is generally not the same IT that is used for the secondary processes, such as HR, financial administration and procurement. Anderson MacGyver helps to make choices aimed at commoditizing business operations and thus the supporting IT systems: from specific stand-alone solutions to uniformity. 

If you want to go for ‘commoditizing’, proceed as follows 

• Map your activities, the Operating Model Canvas is an excellent tool for this 
• Distinguish where IT makes the difference and where IT can be organized efficiently and in accordance with the standard 
• Ensure that the IT specificity in the activities is sufficiently supported where necessary, but not ruthlessly! 
• Involve the user organization and make agreements about ‘green’, primarily about uniformity in processes and therefore also about the underlying IT to be set up 
• Take as a starting point when setting up the IT that processes are adapted and standardized based on how the solution supports this in the standard, adapting the technology to the way of working is a last resort 

Multimodality and ‘commoditizing’ 

MultiModality is Anderson MacGyver’s basis for organizing data and technology from a value perspective and provides direction for the decisions to be made for this purpose. Classifying business activities according to their dynamics and differentiation provides frameworks for determining how these activities can be organized optimally: how should processes run, how should governance be set up, what are the sourcing options, and what technology fits best. The classification leads to a classification in four categories indicated by colors: purple, blue, orange and green. An activity with low dynamics and little differentiation (generic) is given the classification green. Commoditizing in the methodology of Anderson MacGyver is organizing and supporting with technology the business activity towards its low dynamics and differentiation. 

The possibilities of data are virtually limitless. Ironically, this awareness regularly prevents data strategies and initiatives from fruition. Anyone who wants to become data-driven has infinite opportunities, consequently running the risk of getting stuck in endless vistas and crippling perfection, which makes it inherently difficult to find a suitable starting point.

So, yes, the sky is the limit, but you won’t get anywhere without an appropriate value-oriented data strategy. A vision that gives you the framework to focus on the most relevant matters. At Anderson MacGyver, we use an integral perspective in which data, technology and organization all play an important role. We choose a use-case-based approach in which the data strategy is developed in small steps. Knowing what value the organization wants to derive from data in the short term helps pushing the right buttons in order to be successful in the long term.

Initially, restraint constitutes added value: by starting small and quickly achieving tangible successes, initiatives will spread easily and stimulate new ones – celebrating success together provides energy for the subsequent step. Of course, everything should be based on an appropriate, future-proof data governance and data architecture.

Data strategy, the bigger picture

Anderson MacGyver is involved in many successful data projects. Sometimes such trajectories are stand-alone. More often, the data strategy is part of a larger strategic advisory process, such as a redesign of the digital organization, an extensive digital transformation, IT implementation or a combination thereof. Data is typically the common factor opening new perspectives.

A prime example is Allinq, which is specialized in construction and life-cycle management of telecom infrastructure. A new core system was implemented five years ago, requiring improved data management. With data governance related issues resolved, the company now has detailed insight into the assets of customers through continuous monitoring. This information is now being offered as a new product on the market.

Similarly, we can look at Eneco, an energy company that is data-driven 24/7. Thanks to the intelligent ‘Toon home thermostat’, amongst other things, the company can always make the right energy purchasing choices on the energy market. This dependence on data makes it necessary to set up a continuous operation for the data processes, thus marking a shift from data as a supporting asset to a primary process.

Raising awareness

Anderson MacGyver helps many different organizations to increase awareness of the possibilities and value of data – e.g. from making the right decisions and creating more intimate customer relationships, to predictive analytics and leveraging data as a product or service, with a sharp eye for all associated risks and responsibilities.

In short: the data strategy does not stand alone. It should be a match with the organizational structure, processes and the technology landscape. By starting now from these guiding frameworks, you can realize unlimited value with data later on.

By Gerard Wijers

Is an insurer primarily a brand or a digital factory that offers white label products? Are large publishers still media companies or do they primarily manage content for online news and information? What makes a parcel deliverer the preferred supplier? Is the answer optimizing traditional logistics assets or intelligent use of all available data?

Although the answer in most cases lies in the middle, this illustrates that due to extensive digitization, organizations face a considerable challenge. In addition to the focus on technology and data, organizations increasingly must make strategic choices regarding their position in the digital ecosystem.

Within these dynamics, it is no longer viable to primarily reason from within one’s own organization. Besides asking the question as to what makes your company unique, companies need to look outside: which partnerships can and should you seek in order to achieve long-term strategic goals?

Involve the entire management

Fundamental decisions such as choosing ‘brand or machine’, ‘content or consent’ and ‘physical or virtual’ transcend the agenda of technology leaders such as CIOs, CTOs and CDOs. Due to the strategic importance, the entire management is preferably involved in determining the targeted position within the digital business ecosystem. In addition, management boards need the right tools to get the organization moving.

Positioning the organization starts with self-knowledge. Anyone who wants to be successful in a networked collaboration must reflect on their own strengths and weaknesses. By being aware of the value you add for the consumer, partner or end customer, you can optimally tailor activities to market needs; alone or in collaboration with other stakeholders in the ecosystem. To optimally support analysis and decision-making, Anderson MacGyver recently developed the ValueWeb method.

Act faster

The ValueWeb enables organizations to thoroughly assess their current and future desired position in the digital ecosystem. By being aware of their position in the detailed mapped value network, organizations enable themselves to respond more adequately to opportunities. For example, by deploying existing activities differently or in new markets, or by developing new activities in an existing market.

The ValueWeb facilitates strategic decision-making through creating structures and providing insight in the bigger picture as well as enabling deeper analysis of key factors. Examples of such strategic issues are whether organizations carry out activities themselves or purchase from the ecosystem and determining which data to keep internally and which to share outside your organization. All while operating in increasingly complex B2B2C dynamics. Again, what matters in the end is reflecting on the value you add; for yourself and for the entire ecosystem.

An interesting notion is that CxO’s have to let go of things anyway. Organizations must open up digitally to play a meaningful role in the “API economy” and in the ecosystems of choice. Organizations must show their hands to provide customers with the right digital experience, to be of value to partners, and to be able to achieve more through collaboration.

Stay maneuverable

As organizations are increasingly coming into contact with each other, connections are becoming more numerous, but also more volatile. Companies must show flexibility between opening up quickly, and if something does not work, close again. The combination of self-knowledge, competences and agility is of great importance to organizations to answer fundamental questions about where they stand, what they want and what they can do. The ValueWeb enables you to come up with the right answers.

Are you curious about your position within a value network, or would you like to play a different role in a developing digital ecosystem? Read our white paper on the ValueWeb or contact Fabian Haijenga. As Anderson MacGyver we will soon organize an Exclusive CIO Masterclass on this subject. Check with Paul Keizer whether you are eligible to participate.

Anderson MacGyver, a management consultancy firm specialized in digital transformation with offices in the Netherlands and Sweden, announced the opening of a new office in Germany as part of its continued expansion in the European market.

Anderson MacGyver is taking the next step in its strategy to become a leading European advisory firm for strategic advice on Data and Technology. The firm, who recently made the top 5 in consultancy.nl’s best digital advisory ranking, earlier spread their wings from the Netherlands to the Nordics in 2019 and will now be offering its services in Germany.

“The decision to expand further into Europe and open an office in Germany was a logical step in our business strategy,” says Rik Bijmholt, one of the firm’s co-founders and directors. “Many of our clients have operations in Europe’s largest economy,” he explains. “Furthermore, Germany has the second largest consulting market in Europe, thus we expect to encounter ample knowledge collaborations. The North Rine-Westphalia area, from where Anderson MacGyver Germany will operate, is the home of world market leaders and is marked as a future-oriented digital location.” Bijmholt adds that Germany is a great steppingstone for the firm’s expansion into the German-speaking region in Europe.

As Anderson MacGyver already works for international clients who operate in numerous industries, the German market is right up their alley. The firm’s track record includes the French-based industrial engineering company SPIE, Rituals Cosmetics, energy supplier and producer Eneco Group and Vanderlande, one of the world’s largest handling systems suppliers.

Anderson MacGyver Germany will formally launch on June 1st. The firm has attracted Sönke Thoms, who has extensive experience in supporting clients to solve IT issues on a strategic level. Thoms is a former Director of Consulting Services at international consultancy CGI, has years of experience in the financial sector and occupied various leadership positions within technology consultancy firm CKC. “I am very proud and excited to be part of the Anderson MacGyver family. Together, we will build something new and very impactful in Germany,” says Thoms. He continues: “We are looking forward to accompany our German clients on their digital journey and help them to create more business value with data and technology.”

Let’s face it, change is inevitable. As painfully demonstrated by COVID-19 over the past year, only those who manage to adapt have a chance to survive. Rituals, for example, recently decided to utilize store staff for home delivery of their luxury feel-good products upon nationally enforced closure of non-essential stores. Doing so ensured effective use of otherwise ‘wasted’ resources and demonstrated their adaptability in unprecedented times. 

With vaccination campaigns on the way, we are slowly starting to believe the crisis will come to an end soon. This is no reason to sit back and relax, however tempting it may be. If history is any indication, the next disruption is already waiting to knock on our doors and let us not underestimate the burden of the COVID aftermath that is coming our way as well. Rather than resisting the required change or trying to predict the unpredictable, organizations should ensure their adaptability to survive such disruptive events and spin the situation to gain some benefits by focusing on what is important, not just on what is urgent. In the final blog of this trilogy, we explore why organizations often fail to deal with a crisis successfully and explain how multimodality can help your survival.

Organizations often fail to capture the value of opportunities instigated by change

Capturing true, sustainable value of opportunities is often hindered by organizations being overly occupied with either the Shit of Yesterday (SOY)^[1]or the quick wins of tomorrow. Essential resources in terms of time, budget, and talent are wasted on such legacy or on initiatives with a short-term perspective, leaving too little capacity for what truly matters. As a result, in times of crisis or disruption, the organization lacks the force to adapt to the new circumstances. Take for example DHL, who are currently struggling to deliver packages on time, or even at all. Picnic, a Dutch online food retailer, is experiencing similar demand-supply issues resulting in fully booked delivery slots and ultimately customers seeking salvation at its competitors. Both companies are in over their heads right now. 

Dynamic capabilities enable organizations to respond adequately to change

The obvious lesson here is that organizations need to be prepared for disruption and be able to change. The question that remains is “How?”. Change requires capacity and thus capacity should ideally not be wasted on ‘SOY’ or legacy. One thing that survivors have in common is access to built-in dynamic capabilities^[2], enabling them to respond effectively to unforeseen external events. These organizations are able to make swift decisions, and seize opportunity the moment it rises, such as the example of Rituals. Of course, this hinges on the attitude of the organization’s leadership. The CEO of a large Dutch retailer, that was forced to close down during lockdown for being ‘non-essential’, recently expressed his disappointment in one of his ‘essential’ competitors on social media. In his opinion, the competitor abused his ‘essential’ status, i.e. the ability to remain open during lockdown, for offering non-essential products similar to the CEO’s for a discounted price. A lack of solidarity, according to the CEO. Rather than focussing all his efforts to find alternative ways to yield revenue, the CEO thus resorted to self-victimisation and pity. We expect this finger-pointing behaviour won’t take him very far.

Building robustness against disruptive events in the form of dynamic capabilities is, of course, not a simple task. Organizations need to adapt over and over again to survive. Take Nokia, for example, mostly known for its line of mobile devices such as the epic ‘3310’. Before focusing on mobile phones, however, Nokia’s activities ranged from rubber production, to telecommunications, to pulp processing. Changing market circumstances caused Nokia to narrow down her portfolio. A smart adaptation of their business, as they rapidly became market leader for several years. Their leadership was however disrupted by the introduction of Apple’s iPhone. Suspectedly due to poor strategy and lack of dynamic capabilities, Nokia failed to adapt to the changing consumer needs and slowly lost their share on the market of mobile devices. Admitting defeat, Nokia transformed to become primarily a network technology provider a few years ago and despite the challenges thrown at them over the years, still exists today. Constant adaptation is key to survival. 

Multimodality helps your organization to be ready for change

One way to work on your dynamic capabilities and be able to appropriately adapt yourself to the changing environment is by approaching your organization in a multimodal way. Multimodality^[3] is a granular approach to the organization of technology and data, based on the characteristics of your business activities. It helps to identify what activities your organization should focus its innovative abilities on, how it is likely subject to change and disruption, and subsequently how to organize yourself accordingly. Multimodality characterizes business activities in two dimensions: (1) whether the activity is set to generate customer value or to be cost efficient and (2) whether, for you, the activity is specific or generic, ergo done by your competitors as well.

Activities that aim to create customer value and distinguish you from others require constant change to maintain your competitive advantage. These are the activities most likely to be hit by disruption and at the same time are the ones that can enable your survival. A great example are the developments currently seen in the mortgage industry. Boosted by the lockdown and its subsequent inability to meet with clients in person, mortgage providers focused on quickly realizing an online environment for their clients to arrange and close mortgages, eliminating face-to-face contact and even the necessity for a broker himself. The hospitality industry is becoming increasingly inventive in finding new ways to generate revenue as well; many started offering holiday-themed snack and drinks boxes, coffee-to-go stalls are popping up like mushrooms, and new collaborations are forming to arrange city tours visiting various establishments that offer their food and beverages in takeaway form as part of the experience. All within the boundaries of the COVID regulations. Thus, in times of crisis, efforts should be focused on these customer-facing, value generating activities. Continuously innovating them and enabling new business models to meet the changing circumstances is key. 

The illustrations above comprise a simplified example for just one of the four modalities we acknowledge. It serves to provide some first insights in the multimodal way of thinking and its role to prepare your organization for disruption and change. Note that implementing the multimodal mindset in your organization does not happen overnight. If you are interested to learn the full story of our multimodal concepts or want to discover how it can benefit your organization, feel free to hook us up for a cup of coffee, no strings attached. Let’s make sure we are ready for the next crisis to come, together!

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^[1] The Day After Tomorrow by Peter Hinssen, 2017.

^[2] See the theory on Dynamic Capabilities from Teece et al., 1997: p. 515

^[3] If you are interested in the concept of a multimodal organization, please download our whitepaper: Organizing data and technology

Anyone considering purchasing or developing IT services and products should focus on their own organization and that of the supplier. The starting point is determining the business activity to be supported. The right IT solution and partnership – an optimal mix of contract and relationship – will automatically follow in a few logical next steps.

Successfully applying technology and data within organizations requires awareness of their own wishes and requirements, but also a broad internal dialogue between business and IT. Insight and consensus are required to be able to consciously choose, for example, a standard product or a customized solution that distinguishes you from the competition. Five practical steps help to do this more consciously.

Five steps leading to the right governance

1. Determine ​​what business activity the IT solution will support. Is it about something generic or specific? Do you distinguish by value or by price? By making this tangible per activity, as business and IT, you have already made some progress.
2. Develop insight into the possible technological support of the business activity. Is a general IT solution sufficient, is a sector-specific solution required, or can you distinguish yourself with IT? Then you look for a corresponding technology.
3. If you know which solution you are looking for, you focus on the service. What does the ideal service model look like? Which activities do you want to carry out yourself, and which do you want to outsource to one or more suppliers? Do you only want to purchase software licenses or a complete end-to-end service? Or maybe something in between?
4. Based on these insights, you look around the market to see what IT service providers offer. What is their service proposition for you as a customer? Does this meet your needs? Then, choose for a product (software), convenience (implementation by the partner), developing the necessary skills (coordinating yourself) or exclusivity (high-quality and customer-oriented services).
5. Finally, each service type needs its own specific governance model: control (if you opt for a product), cooperation (convenience), coordination (developing skills), and collaboration (exclusivity). In the case of collaboration, coordination is partly the responsibility of the supplier.

Crucial elements: how to avoid making the wrong choices

This step-by-step plan contains some crucial elements. Primarily, focusing on the activity to be supported, but also steps three and four: determining the relationship between the desired service model and its actual availability on the market.

For example, in some cases, suppliers are unable to provide the requested convenience, and the company will have to develop skills itself. Knowledge of the strategy of the market party is also important: if the emphasis is on providing standard solutions, then this may not be the optimal partner for an IT need that distinguishes you from competition. Often multiple parties play a role in implementations.

Optimize existing IT solutions

The step-by-step plan can also help to review existing IT solutions and parties that supply them. Review the current and desired governance of the IT services. After all, intentions, wishes and objectives can change, and with them the optimal technological support.

Anderson MacGyver wrote the recent white paper Governing Market Services, including the method described above. For CxOs who value the right technology choices.

Digital technologies are generating all kinds of opportunities in virtually every sector. At the same time, organizations are faced with the challenge of adequately responding to changing customer needs, new profit models and heightened competition. Anderson MacGyver bases success in the digital world on three pillars: clarity in the digital direction and agenda, the right organization structure and appropriate technology. Data is the fourth element that flows through each of these pillars.

According to Anderson MacGyver, digitization only makes sense when the envisioned changes are in line with the business activities, opportunities and ambitions of the organization. “Simple but well-thought out concepts and models help companies and their directors to effectively navigate through all the digital possibilities,” says co-founder Gerard Wijers. “That is what Anderson MacGyver does and how we stand out from the rest. This is how we make it easier for our customers to make the right choices.”

Reassessment

Wijers cites the example of the Dutch company Allinq which specializes in building and maintaining large telecom infrastructures. “The changing market required a thorough reassessment. To prepare Allinq for the future, we made a blueprint of the overall organization; its business, culture, management as well as the data and technology. Allinq’s goal: reliability and predictability towards the customers, a streamlined operation and a gradual digitization of products and services.” 

“Having your data in order is a precondition for being successful in the modern world.”

Having the right data is crucial, because this affects the business, the organization and the technology. Wijers: “Having your data in order is a precondition for being successful in the modern world.” Only with clear, accessible and safely managed data is it possible to offer customers the desired products and services. This demands the right organizational skills and responsibilities, and an IT department that is wholly in sync with the goals of the company.

Business agenda

The so-called Operating Model Canvas helps make strategic data and technology choices easier. Bor van Dijk, who primarily focuses on the digital business agenda for clients of Anderson MacGyver, explains: “An A0-format poster shows the correlation among business activities, customers and business partners in one glance. It stimulates the use of one company common language for all involved and forms the connection between the business model, the company processes, the data and the IT systems.

The Operating Model Canvas also helps companies understand the context and dynamics in which our clients operate. “This requires companies to listen closely and ask specific questions. Many companies have similar management models and activities and even on a detail level may appear the same. That is why the level of analysis must do justice to the uniqueness of each customer. Our strength is that we provide customized services based on best practices with which management teams can actually achieve their digital agendas.”

Organization

Once the organization has been properly canvassed, an effective and efficient structuring and support for the various business activities follows, each with their characteristic speed and dynamic. According to Anderson MacGyver’s Edwin Wieringa, this is best achieved with multi-disciplinary teams that all provide value which correlates to the strategy. “Some teams focus on the rapidly changing demands of the business, while others are aimed at activities that require stability and predictability. The digital exchange of information ensures harmony and cohesion. It enables every component to optimally organize itself for these specific activities, with the right competencies in the right place.”

Many companies are now grappling with an antiquated information provision that impedes the development of new digital services, concludes Guild Lead Technology Onno Wasser. “When designing as new digital landscape, the business activities have a guiding role. The chosen solutions must also do justice to the supporting processes, functions and domains – for example, within the finance, purchasing or HR departments. In practice, a “fit for purpose” technology often consists of value-oriented activities with much customer interaction. Activities that can fluidly move along with customers and the market and are backed up by a stable information provision.

Solid basis

Onno Wasser cites the international construction and engineering company SPIE as a prime example of Anderson MacGyver’s three-pronged approach. “They have implemented the digital agenda throughout the entire organization as based on their core operational activities. Ultimately, one technology platform supports the five most prominent organizational components. This offers many advantages in terms of management and data policy.”

Also at other clients, a successful digital transformation is based on a combination of business agenda, organizational structure and technology. Anderson MacGyver facilitates a cooperative process that solves problems by using proven concepts methods, expertise and an open approach. In this, the clients’ context and challenges are always the focal point.

Our previous blog states that, with the right attitude, organisations can use the corona crisis as a catalyst for change. In this blog we build upon that premise by explaining how organisations should respond in times like these.

Desperate times call for desperate measures – the ancient Greek saying turns out to be ever so true today, during the corona crisis. Organisations must adjust to new rules and regulations, a customer drain or at the very least changes in customer behaviour, and a partially eliminated workforce due to illness. And although we are all dealing with the same corona crisis, the appropriate response mechanism[1] varies amongst organisations and industries and can shift over time as well.

When in chaos, act first and think later

In times of chaos, there is no order whatsoever as cause and effect relationships do not exist, nor do they matter, and basic survival instincts prevail. Clear examples that demonstrate this kind of behaviour were the September 11 WTC and 2011 Norway Utøya attacks where basically any action was preferable if it led to safety. There is no time to experiment, wonder or analyse the situation. Similar behaviour is very much visible during COVID-19. Everyone still has the vivid images of hospital-ICs, where many were overwhelmed by the immense influx of corona patients that quickly led to exceeding the maximum capacity, instigating a crisis. The same was noticeable when the virus hit national soil, when many governmental bodies demonstrated appropriate chaotic behaviour; that is to act first and get out of the chaos, and sense and response later. Dictator type leadership, top-down instructions issued, army support, curfews, regular street checks, all in place to desperately get a grip on the ever-spreading threat. Another example, the hospitality and travel industries. Both almost completely shut down and experienced a high degree of uncertainty; they had no clue what would happen next; when can we reopen again, how long can I survive financially and will our industry even be the same after corona?

Complex situations require experimenting to discover what works

Although we acknowledge the severity of the COVID-19 crisis on societal level, many organisations may not actually have experienced a Chaotic state. Instead, they were facing extreme Complex circumstances. They experienced fuzzy cause-and-effect relationships and most likely found that analysis and experience did not help in making the right decisions. The appropriate course of action in this context is to experiment with various options (‘probe’) and change your strategy if it is not successful. When companies underwent a complete and immediate shutdown of their business, many found themselves (and some still are) in this situation. Companies were unaware of what they should and could do to mitigate the negative effects, so the best way is to start experimenting to see what will work best for them as we have seen many organisations doing so successfully. Take for instance all the Michelin-star restaurants that were used to offering a complete customer experience and are now doing ‘plain’ take-away and delivery. Or remember the example in our first blog of the first Dutch ice cream drive-through, fitness centres that offer their classes online after an initial trial-period, cancelled festivals that reverted to an online event or via television. All in search of new ways to generate revenue, stay in touch with their customers and fans, and survive the sudden complexities handed to them.

Complicated situations allow for experience-based analysis

Some organisations were lucky enough to not find themselves (not for long) in Chaos as well as Complex situations and mostly ‘suffered’ from Complicated circumstances. Although cause and effect relationships remain much clearer and a sense of predictability exists, decision-making still requires (expert-) analysis to be successful. In current COVID-19 times, this is visible in bars and restaurants adjusting their floor plan and arrangement of tables to adhere to social distancing measures, or in institutes of higher education that now completely need to shift to online teaching. For many organisations, it will suffice to sense the new rules, analyse the possible options, and choose new effective practices accordingly. Organisations that, for example, experience an interrupted, international supply chain due to their offshored personnel being disconnected, will have to weigh their options and choose an alternative, probably onshore, solution to replace the unavailable services.

When simple circumstances rise, you can rely on best practices

Over time, disorder can fade. When uncertainties have vanished and new standards have been established in society, a sense of predictability might return. Such rather Simple conditions allow for standardized decision-making and relying on best practices when choosing your response. A fitting example of a shift towards Simple circumstances in the COVID-19 era is decision-making in supermarkets and public places; over time limiting the number of visitors and determining who can enter and who is denied access based on the national health checklists will probably have become the new standard. The extent to which ‘over time’ lasts for an organisation is however strongly affected by its industry as numerous industries will probably remain in a Complicated or even Complex situation for a long time. The airline industry, for example, is facing hard times with restricted airspace all over the world, while the entertainment industry is finding ways to survive on half-full houses due to social distance measures. And then lastly, it must not be forgotten that many organisations might not survive COVID-19 at all and will drown in a desperate attempt to survive or have even already gone under for good.

Circumstances change, and so does society

Obviously, the appropriate response mechanism and its ultimate effectiveness heavily depend on the context and disorder organisations find themselves in. Although it is becoming more evident each day that we will remain in this daunting situation for a while, examples are already showing us that many organisations have the potential to survive a time like this. ‘All’ you need is the right attitude and capabilities to match the situation you are in.

This crisis is reminding us of the fragility of our society and the impact that multiple organisations can suffer as a chain reaction to a single decision or event. For example, having discovered that working remotely is perfectly suitable in many industries, several organisations have decided to close their offices or instigate restricted access. Not only might this decrease in operational expenses show in a lowering of prices for their customers in the long term, it can impact society on a larger scale as well. Imagine the ripple effect when increasingly more people work from home: national commuting traffic would decrease, which on the long term effects for instance leasing companies and public transport providers who will see their revenues drop. On the bright side, less travel to work equals less of a burden on the environment, less traffic jams and subsequently less economic losses. You get the picture, right? The impact and unpredictability of this ripple effect makes for such a dynamic environment that decision-makers need to be even more alert than usual for shifting circumstances and could cause entire industries to remain in a Complex or Complicated situation indefinitely. We anticipate COVID-19 to have an undeniable and lasting effect on our society. What do you think, does this crisis mark the dawn of a new era?

By the way, a final note: are you interested in the underlying theory? Please take a look at this video of Snowden explaining his Cynefin model.

You might be wondering why some organisations, despite their adequate response to disorder, are more successful than others to quickly adapt in a time of crisis. In our next and final blog of this trilogy, we will elaborate on the aspects that not only help your organisation prepare for disorder but create long lasting strategic advantage as well.

[1] The Cynefin framework by Snowden (1999) provides direction to navigate times like these. Source: Snowden & Boone, 2007, A Leaders Framework for Decision-Making, Harvard Business Review.

Excessive attention to modern digital technology distracts from the real basic challenges of CIOs, CTOs, CDOs and other tech leaders. Adoption of solutions is pointless without the right organizational structure. Only when everything and everyone is positioned in the optimal role and function, the right technology choices will be made effective.

Many organizations still operate in two completely different worlds: on the one hand, the opportunities of the new digital business models – often driven by technology-capable employees and leaders. On the other hand, there are the traditional activities: the command and control mechanisms, linked to inherited structures, workforce and skills.

The difficulty for many companies is not primarily embracing technologies and capabilities. Thanks to the progressive part of the employees, this is already widely happening. The main challenge is landing the proliferation of these often scattered initiatives in a structured organization-wide manner. A multimodal-based approach is the key to the right organizational design and an optimal mix of competencies.

A common starting point

A common starting point is crucial. This is achieved by capturing the corporate strategy in one widely supported visualization, based on a well-thought-out canvas process. Everyone first agrees on the product to be delivered to the customer and the market. Then, there must be consensus on the required business activities, including the responsible organizational units.

Here, it helps to capture activities in four modalities:

Common

Represents business activities characterized by a relatively stable environment and that are similar to comparable activities in other organizations, like supportive activities such as financial administration, human resources and facility management.

Adaptive

Represents business activities that are highly responsive, but that do not differ in specific features from comparable activities, products, or services of other organizations. Examples are competitive financial services offered by banks, ticket services for travelling and hotel rooms.

Specialized

Represents activities that take place in a relatively stable environment. They are specific because they require special knowledge, resources, or methods, like technical maintenance of equipment or specific infrastructure (for example time critical), specific IT, data expertise, process engineering, or activities integrating different business activities.

Distinct

Represent business activities that are specific and responsive. These business activities play a vital role in the development of new and innovative products and services in response to changing customer demands, to developments in society, technology, or the actions of competitors.

Transparency is key

When the fundamental distinction between all activities is clear, it becomes easier to structure and staff them effectively. In this way, both digital geniuses and the more traditional employees will be more likely to excel. The same goes for their leaders. Also, the relationship between activities is made transparent. This leads to the roll-out of more appropriate technological solutions and possibilities.

Read more about our approach

CIOs, CTOs, CDOs, and other IT leaders who want to carefully consider digitalization and adoption of technology can greatly benefit from the approach outlined by Anderson MacGyver in the newly released white paper Organizing Data and Technology. A method characterized by pragmatism, speed, an open eye for new opportunities and respect for the existing organization. The right way to real digital success.

“A multimodal-based approach is the key to the right organizational design and an optimal mix of competencies.”

Realization of a digital strategy requires flexibility from the business to market new services efficiently. However, application landscapes have often become too complex to fulfil the needs from the business.

The application landscape can be regarded as historic timeline of the organization that provides a nice picture of its evolution throughout the years: purchased software packages, custom development, or acquired through a merger. Diversity and the lack of homogeneity in the application landscape are important bottlenecks in digital transformations; such old wounds must first be stitched.

Rationalization plan

A rationalization plan can be developed to make the application landscape ‘fit for purpose’: simplifying, harmonizing, or modernizing. All used IT services and their most important characteristics are plotted on the Operation Model Canvas. Followed by analysis to determine the existence of similar services, redundancy in functionality, or use of ancient technology. Are there mismatches between the characteristics of the IT service and the business activity it supports? Potential improvements can be identified and the desired application landscape, which ís flexible and manageable, can be designed.

Prioritization

Now that the future application landscape has become clear, a plan for the application rationalisation can be developed, based on current architecture principles. Stakeholders from business and IT create a roadmap based on the prioritization and start with elimination, continuation, modification, and innovation of the applications – complemented by the selection of potential partners and solutions.

In a short period of time the applications transform from your ball and chain to the wind beneath your wings, which helps to accelerate the digital transformation of your business to a maximum degree. There is nothing weighing us down anymore!