The Agile Organization

I’ve been meandering through an extended series on digital transformation: why it’s hard, where things go wrong, and what you need to be able to do to be successful. In this post, I intend to summarize some of that thinking and describe how the large enterprise should organize itself to be good at digital.

Throughout this series, I’ve emphasized the importance of being able to make good decisions in the digital realm. That is, of course, the function of analytics and its my own special concerns when it comes to digital. But there are people who will point out  that decision-making is not the be all and end all of digital excellence. They might suggest that being able to execute is important too.

If you’re a football fan, it’s easy to see the dramatic difference between Peyton Manning – possibly the finest on-field decision-maker in the history of the game – with a good arm and without. It’s one thing to know where to throw the ball on any given play, quite another to be able to get it there accurately. If that wasn’t the case, it’s probably true that many of my readers would be making millions in the NFL!

On the other hand, this divide between decision-making and execution tends to break down if you extend your view to the entire organization. If the GM is doing the job properly, then the decision about which quarterbacks to draft or sign will appropriately balance their physical and decision-making skills. That’s part of what’s involved in good GM decisioning. Meanwhile, the coach has an identical responsibility on a day-to-day basis. A foot injury may limit Peyton to the point where his backup becomes a better option. Then it may heal and the pendulum swings back. The organization makes a series of decisions and if it can make all of those decisions well, then it’s hard to see how execution doesn’t follow along.

If, as an organization, I can make good decisions about the strategy for digital, the technology to run it on, the agencies to build it, the people to optimize it, the way to organize it, and the tactics to drive it, then everything is likely to be pretty good.

Unfortunately, it’s simply not the case that the analytics, organization and capabilities necessary to make good decisions across all these areas are remotely similar. To return to my football analogy, it’s clear that very few organizations are setup to make good decisions in every aspect of their operations. Some organizations excel at particular functions (like game-planning) but are very poor at drafting. Indeed, sometimes success in one-area breeds disaster in another. When a coach like Chip Kelly becomes very successful in his role, there is a tendency for the organization to expand that role so that the coach has increasing control over personnel. This almost always works badly in practice. Even knowing it will work badly doesn’t prevent the problem. Since the coach is so important, it may be that an organization will cede much control over personnel to a successful coach even when everyone (except the coach) believes it’s a bad idea.

If you don’t think similar situations arise constantly in corporate America, you aren’t paying attention.

In my posts in this series, I’ve mapped out the capabilities necessary to give decision-makers the information and capabilities they need to make good decisions about digital experiences. I haven’t touched on (and don’t really intend to touch on) broader themes like deciding who the right people to hire are or what kind of measurement, analysis or knowledge is necessary to make those sorts of meta-decisions.

There are two respects, however, in which I have tried to address at least some of these meta-concerns about execution. First, I’ve described why it is and how it comes to pass that most enterprises don’t use analytics to support strategic decision-making. This seems like a clear miss and a place where thoughtful implementation of good measurement, particularly voice-of-customer measurement of the type I’ve described, should yield high returns.

Second, I took a stab at describing how organizations can think about and work toward building an analytics culture. In these two posts, I argue that most attempts at culture-building approach the problem backwards. The most common culture-building activities in the enterprise are all about “talk”. We talk about diversity. We talk about ethics. We talk about being data-driven in our decision-making. I don’t think this talk adds up to much. I suggest that culture is formed far more through habit than talk; that if an organization wants to build an analytics culture, it needs to find ways to “do” analytics. The word may proceed the deed, but it is only through the force of the deed (good habits) that the word becomes character/culture. This may seem somewhat obvious – no, it is obvious – but people somehow manage to miss the obvious far too often. Those posts don’t just formulate the obvious, they also suggest a set of activities that are particularly efficacious in creating good enterprise habits of decision-making. If you care about enterprise culture and you haven’t already done so, give them a read.

For some folks, however, all these analytics actions miss the key questions. They don’t want to know what the organization should do. They want to know how the organization should work. Who owns digital? Who owns analytics? What lives in a central organization? What lives in a business unit? Is digital a capability or a department?

In the context of the small company, most of these questions aren’t terribly important. In the large enterprise, they mean a lot. But acknowledging that they mean a lot isn’t to suggest that I can answer them – or at least most of them.

I’m skeptical that there is an answer for most of these questions. At least in the abstract, I doubt there is one right organization for digital or one right degree of centralization. I’ve had many conversations with wise folks who recognize that their organizations seem to be in constant motion – swinging like an enormous pendulum between extremes of centralization followed by extremes of decentralization.

Even this peripatetic motion – which can look so irrational from the inside – may make sense. If we assume that centralization and decentralization have distinct advantages, then not only might it be true that changing circumstances might drive a change in the optimal configuration, but it might even be true that swinging the organization from one pole to the other might help capture the benefits of each.

That seems unlikely, but you never know. There is sometimes more logic in the seemingly irrational movements of the crowd than we might first imagine.

Most questions about digital organization are deeply historical. They depend on what type of company you are, in what of market, with what culture and what strategic imperatives. All of which is, of course, Management 101. Obvious stuff that hardly needs to be stated.

However, there are some aspects of digital about which I am willing to be more directive. First, that some balance between centralization and decentralization is essential in analytics. The imperative for centralization is driven by these factors: the need for comparative metrics of success around digital, the need for consistent data collection, the imperatives of the latest generation of highly-complex IT systems, and the need/desire to address customers across the full spectrum of their engagement with the enterprise. Of these, the first and the last are primary. If you don’t need those two, then you may not care about consistent data collection or centralized data systems (this last is debatable).

On the other hand, there are powerful reasons for decentralization of which the biggest is simply that analytics is best done as close to the decision-making as possible. Before the advent of Hadoop, I would have suggested that the vast majority of analytics resources in the digital space be decentralized. Hadoop makes that much harder. The skills are much rarer, the demands for control and governance much higher, and the need for cross-domain expertise much greater in this new world.

That will change. As the open-source analytics stack matures and the market over-rewards skilled practitioners – drawing in more folks, it will become much easier to decentralize again. This isn’t the first time we’ve been down the IT path that goes from centralization to gradual diffusion as technologies become cheaper, easier, and better supported.

At an even more fundamental level than the question of centralization lives the location and nature of digital. Is digital treated as a thing? Is it part of Marketing? Or Operations? Or does each thing have a digital component?

I know I should have more of an opinion about this, but I’m afraid that the right answers seem to me, once again, to be local and historical. In a digital pure-play, to even speak of digital as a thing seems absurd. It’s the core of the company. In a gas company, on the other hand, digital might best be viewed as a customer service channel. In a manufacturer, digital might be a sub-function of brand marketing or, depending on the nature of the digital investment and its importance to the company, a unit unto-itself.

Obviously, one of the huge disadvantages to thinking of digital as a unit unto-itself is how it can then interact correctly with the non-digital functions that share the same purpose. If you have digital customer servicing and non-digital customer servicing, does it really make sense to have one in a digital department and the other as a customer-service department?

There is a case, however, for incubating digital capabilities within a small compact, standalone entity that can protect and nourish the digital investment with a distinct culture and resourcing model. I get that. Ultimately, though, it seems to me that unless digital OWNS an entire function, separating that function across digital and non-digital lines is arbitrary and likely to be ineffective in an omni-channel world.

But here’s the flip side. If you have a single digital property and it shares marketing and customer support functions, how do you allocate real-estate and who gets to determine key things like site structure? I’ve seen organizations where everything but the homepage is owned by somebody and the home page is like Oliver Twist. “Home page for sale, does anybody want one?”

That’s not optimal.

So the more overlap there needs to be between the functions and your digital properties, the more incentive you have to build a purely digital organization.

No matter what structure you pick, there are some trade-offs you’re going to have to live with. That’s part of why there is no magic answer to the right organization.

But far more important than the precise balance you strike around centralization or even where you put digital is the way you organize the core capabilities that belong to digital. Here, the vast majority of enterprises organize along the same general lines. Digital comprises some rough set of capabilities including:

  • IT
  • Creative
  • Marketing
  • Customer
  • UX
  • Analytics
  • Testing
  • VoC

In almost every company I work with, each of these capabilities is instantiated as a separate team. In most organizations, the IT folks are in a completely different reporting structure all the way up. There is no unification till you hit the C-Suite. Often, Marketing and Creative are unified. In some organizations, all of the research functions are unified (VoC, analytics) – sometimes under Customer, sometimes not. UX and Testing can wind up almost anywhere. They typically live under the Marketing department, but they can also live under a Research or Customer function.

None of this, to me, makes any sense.

To do digital well requires a deep integration of these capabilities. What’s more, it requires that these teams work together on a consistent basis. That’s not the way it’s mostly done.

Almost every enterprise I see not only siloes these capabilities, but puts in place budgetary processes that fund each digital asset as a one-time investment and which requires pass-offs between teams.

That’s probably not entirely clear so let me give some concrete examples.

You want to launch a new website. You hire an agency to design the Website. Then your internal IT team builds it. Now the agency goes away. The folks who designed the website no longer have anything to do with it. What’s more, the folks who built it get rotated onto the next project. Sometimes, that’s all that happens. The website just sits there – unimproved. Sometimes the measurement team will now pick it up. Keep in mind that the measurement team almost never had anything to do with the design of the site in the first place. They are just there to report on it. Still, they measure it and if they find some problem, who do they give it to?

Well, maybe they pass it on to the UX team or the testing team. Those teams, neither of which have ever worked with the website or had anything to do with its design are now responsible for implementing changes on it. And, of course, they will be working with developers who had nothing to do with building it.

Meanwhile, on an entirely separate track, the customer team may be designing a broader experience that involves that website. They enlist the VoC team to survey the site’s users and find out what they don’t like about it. Neither team (of course) had anything to do with designing or building the site.

If they come to some conclusion about what they want the site to do, they work with another(!) team of developers to implement their changes. That these changes may be at cross-purposes to the UX team’s changes or the original design intent is neither here nor there.

Does any of this make sense?

If you take continuous improvement to heart (and you should because it is the key to digital excellence), you need to realize that almost everything about the way your digital organization functions is wrong. You budget wrong and you organize wrong.

[Check out my relatively short (20 min) video on digital transformation and analytics organization – it’s the perfect medium for distributing this message through your enterprise!]

Here’s my simple rule about building digital assets. If it’s worth doing, it’s worth improving. Nothing you build will ever be right the first time. Accept that. Embrace it. That means you budget digital teams to build AND improve something. Those teams don’t go away. They don’t rotate. And they include ALL of the capabilities you need to successfully deliver digital experiences. Your developers don’t rotate off, your designers don’t go away, your VoC folks aren’t living in a parallel universe.

When you do things this way, you embody a commitment to continuous improvement deeply into your core organizational processes. It almost forces you to do it right. All those folks in IT and creative will demand analytics and tests to run or they won’t have anything to do.

That’s a good thing.

This type of vertical integration of digital capabilities is far, far more important than the balance around centralization or even the home for digital. Yet it gets far less attention in most enterprise strategic discussions.

The existence or lack of this vertical integration is the single most important factor in driving analytics into digital. Do it right, and you’ll do it well. Do what everyone else does and…well…it won’t be so good.

Measuring the Digital World – The Movie!

I’ve put together a short 20 minute video that’s a companion piece to Measuring the Digital World. It’s a guided tour through the core principles of digital analytics and a really nice introduction to the book and the field:

Measuring the Digital World : Introduction

Measuring the Digital World

An Introduction to Digital Analytics

The video introduces the unique challenges of measuring the digital world. It’s a world where none of our traditional measurement categories and concepts apply. And it doesn’t help that our tools mostly point us in the wrong direction – introducing measurement categories that are unhelpful or misleading. To measure the digital world, we need to understand customer experiences not Websites. That isn’t easy when all you know is what web pages people looked at!

But it’s precisely that leap – from consumption to intent – that underlies all digital measurement. The video borrows an example from the book (Conan the Librarian) to show how this works and why it can be powerful. This leads directly to the concepts of 2-Tiered segmentation that are central to MTDW and are the foundation of good digital measurement.

Of course, it’s not that easy. Not only is making the inference from consumption to intent hard, it’s constantly undermined by the nature of digital properties. Their limited real-estate and strong structural elements – designed to force visitors in particular directions – make it risky to assume that people viewed what they were most interested in.

This essential contradiction between the two most fundamental principles of digital analytics is what makes our discipline so hard and (also) so interesting.

Finally, the video introduces the big data story and the ways that digital data – and making the leap from consumption to intent – challenges many of our traditional IT paradigms (not to mention our supposedly purpose-built digital analytics toolkit).

Give it a look. Even if you’re an experience practitioner I think you’ll find parts of it illuminating. And if you’re new to the field or a consumer of digital reporting and analytics, I don’t think you could spend a more productive 20 minutes.

Afterward (when you want to order the book), here’s the link to it on Amazon!

A Brief Diversion into the Philosophy behind Apple vs. the FBI

I’m a devoted reader of Slate – less for their political coverage which is a bit too cookie cutter to be generally interesting – than for their extensive culture coverage; coverage that I find consistently provocative and amusing. Oddly, between politics and culture I’m not sure how to classify this recent article on the now notorious dispute between Apple and the Feds.

The gist of the argument is that both sides are missing the point in treating the dispute as one over whether and in what conditions the government should have access to our devices. According to the author, Mathew Noah Smith (a UK philosopher), this debate misses a deeper issue; namely, whether the government should have access to our mind.

It’s an easy and entertaining read, and I’d encourage you to check it out if you have an interest in this sort of thing or don’t trust that I’ve extracted the salient quotes.

Essentially, Mr. Smith invokes the “Extended Mind Hypothesis” of Andy Clark to argue that devices like iPhones have become a fundamental part of our mental machinery. The idea that external objects are part of our mental machinery shouldn’t be too controversial. If you’ve ever used a calendar to keep track of dates or a calculator to add two numbers, you’ve extended your mental processes beyond the interior walls of your brain. Indeed, anyone who’s ever picked up a pencil or a piece of chalk has done the same.

It would be a stretch, however, to suggest that every object involved in our mental deliberations is part of ourselves. So this is qualified by the additional language:

“What makes it so that these parts of the world partially constitute our mental processes? Minimally, they are as easily and reliably accessible as our brain processes are…to consider something an extension of the mind, what matters is that a certain threshold of easy, reliable access is met. And, our phones—our information-technology devices generally—typically meet that threshold. “

Mr. Smith continues in this vein:

“There is simply no principled distinction between the processes occurring in the meaty glob in your cranium and the processes occurring in the little silicon, metal, and glass block that is your iPhone. The solid-state drive storing photos in the phone are your memories in the same way that certain groups of neurons storing images in your brain are memories. Our minds extend beyond our heads and into our phones.”

If you accept the extended mind hypothesis and believe it’s applicable, then the implications of Apple vs. the FBI are deep indeed. According to Smith, the argument becomes one “about the permeability of the boundaries of the self. How much of ourselves should we give over to the state?”

And, according to Smith, it also suggests that people are – perhaps unwittingly – ceding too much of their selves to corporate entities like Apple and Google that exist without even the sanction of democratic government. In his words, “the extension of even the nominally democratic state’s reach into our device-expanded mental lives may not be nearly as insidious as the extension of corporations’ reaches into our device-expanded mental lives.”

So is there really an extended mind? And should we all think differently about Apple vs. the FBI (whatever we now happen to think about it)?

Well…

Have you ever noticed that sometimes it takes a really smart guy to make a really stupid argument?

As fascinating as concepts like the “Extended Mind” are, our iPhone’s don’t seem to me to quite fit the bill.

Suppose they did. Let’s think about the implications of Mr. Smith’s argument.

He’s arguing against the government (and Apple) having access to your iPhone processes – on the grounds that it is equivalent to reading your mind. But if we accept that, how much worse would it be to have your device confiscated? It would be the difference between having someone read your thoughts and having someone cut out a chunk of your brain!

So if we were to take Mr. Smith’s argument seriously, then the government preventing convict’s from using their iPhone (for example) would be the moral equivalent of a frontal lobotomy. It would be like cutting out a part of their brain.

Worse, Verizon might perform the same action if you simply stopped paying your bill. It seems, on Mr. Smith’s account, we would be in danger of losing our identity when we don’t pay our phone bill! I’ll admit to some moments of panic when my iPhone bricked on me while traveling. However, I don’t remember thinking that my mental processes and identity were at stake. Perhaps that’s because my brain wasn’t functioning well without these external processes available to it!

Indeed, of all the borderline silly claims in the article, the silliest is certainly this line: “[there is]…simply no principled distinction between the processes occurring in the meaty glob in your cranium and the processes occurring in the little silicon, metal, and glass block that is your iPhone.”

This is the kind of stuff that can give philosophy a bad name. Take a clever idea and push it beyond the point of reason. I will be mad if you step on my iPhone. If you throw it in a chipper I might even sue you. But in neither case will I believe that you have attacked me. What’s more, I have never believed that if someone watched me while I used a calculator that they were reading my mind. I would deeply regret it if you purged the photos from my iPhone and it’s backups. But suggesting this is equivalent to, for example, having Alzheimer’s is deeply stupid. Nor, it seems to me, is there ANY but the most rudimentary similarity between human thought and code executing on today’s phones.

A hacker may spend 20 hours a day with his laptop. And that laptop may be far more an extension of his mental processes than an iPhone is of mine, but I take it that we would all agree that seizing a hacker’s laptop and using it as evidence is both perfectly legitimate and not at all the same as drugging somebody with Sodium Pentathol to make them talk.

So it seems that our intuitions on this subject suggest, quite clearly, that there is a very big difference between processes on an iPhone and processes inside our “meaty globs”.

Yes, I might want privacy when I write. I might reasonably think that my tax returns are my business. But there’s nothing new in any of this. Corporations and government (at least in our fortunate slice of the world) have both responsibilities and restrictions on their ability to seize my goods, to read my writing, to listen to my phone calls, etc. etc. When we interact with the world, we expose some portion of what’s going inside that meaty glob. But that choice of what to bring outside of our skulls and into the world is always ours. And access to what we expose will always be at least an option.

It’s no easy question to decide exactly where the boundaries are when it comes to corporate and governmental rights and responsibilities around that access or how the inevitable gray areas can be monitored and decisioned.

But adding in concepts like the Network Mind and implying that what’s at stake is, quite literally, our self-hood is unhelpful. We can think intelligibly about what rights and responsibilities both governments and companies have when it comes to data privacy without pretending that there is something more novel at stake than that. Indeed, we can probably only think about it intelligibly in that context.

One can imagine a world where something more is at stake. A world where electronics are literally implanted in our brains, are directly integrated within our thoughts, and access to which might indeed break down what is otherwise a quite fundamental distinction between our minds and the tools we use.

Tell then, I think we are safe.