In a recent book titled Dual Transformation, the authors (Scott D. Anthony, Clark G. Gilbert, and Mark W. Johnson) focus on the challenging task of transforming the core while simultaneously creating a growth engine. They refer to it as dual transformation: Transformation A – repositioning the core, and Transformation B – creating the new. This complex tension is represented in this visual from our upcoming leadership course: Reimagining the Future: A Journey through the Looking Glass.
In transformation A, the foundational problem solved (what) does not change, but disruption comes from a change in the way the problem is solved (how). An example being the way Salesforce.com changed software delivery, upending the industry’s economic model and rearranging the competitive landscape. Transformation B on the other hand powers the next wave of growth. As the authors rightfully state, history teaches us that disruption is the greatest growth opportunity a company will ever see. They point out that the process of making the complicated simple or the expensive affordable always grows markets, even as it upends business models. Whereas transformation A is about confronting the innovator’s dilemma, transformation B is about seizing the innovator’s opportunity.
With regard to the buzz surrounding Digital Transformation, the authors worry that many digital efforts are focused on simply doing what they used to do digitally, rather than using the rise of digital technologies to fundamentally rethink operations. As they point out; in a quickly changing world, playing an old game better is insufficient. As for the litmus test that defines whether you really are transforming, in their eyes, it is quite simple. If a company is using the same metrics before and after its so-called transformation effort, it really hasn’t transformed in a material way.
As for commitment, you can’t be partially invested. They use a great historical reference to underscore the point:
In the sixteenth century, Spanish commander Hernán Cortés set off to conquer the Aztec empire in what now constitutes central Mexico. Upon landing, he ordered the destruction of his fleet of ships, making it clear to the crew members that they would succeed in their quest or die trying. Similarly, executing transformation A requires a burn the boats moment.
The authors effectively use examples from their years of experience to drive their point’s home. For example, in the context of fully investing, they used these transformation examples:
Moving from licensed software to services: Adobe just stopped creating new versions of packaged software.
Transforming the core: Deseret Media did not do a drip-drip-drip downsizing; they dramatically cut 40 percent of its staff on a single day.
Next generation education: When the Mormon Church created BYU-Idaho it didn’t slowly evolve out Ricks College. It turned the junior college into a four-year institution, moved to year-round operations, and eliminated the costly athletic program essentially overnight.
Other words of advice from the authors:
Transformation B is about testing, adjusting, and disciplined experimentation. But transformation A is a different way to deliver against a broad market need that has already been validated. Pilots are used as a way to fine-tune full-scale launch plans and to further build organizational alignment, but once you align on a clear view of transformation A, you need to execute quickly, and execute comprehensively. Any other approach creates the opportunity for compromise and backsliding.
Another common element is bringing in special-purpose talent. By definition, people who have progressed through an organization have developed mastery of yesterday’s model. Although smart people can no doubt learn about new approaches, you can shorten the path to success by bringing in people who have already learned what is necessary to master transformation A.
This is a very good book that builds on the authors experiences in both areas of dual transformation. They use story telling effectively, and focus on the delicate leadership balance required to manage a dual transformation. I highly recommend it for anyone facing a transformation challenge.