 In this presentation, Dave focuses on an integrated approach to digital based on the seven levers or levers wherever you're from of digital transformation. Warm welcome, please, for Dave Hornford. Clickers in the middle. Well, I'm going to follow the Air Force approach. I'm going to tell you what I'm going to tell you. Then I'm going to tell you that I'm going to repeat it about four times. We're going to talk about the seven levers. We're going to talk about digital transformation. And the core of that are implications of using the seven levers approach. Understanding complexity. And then we'll just walk through the seven levers and see what they talk about. Seven levers is a pair of white papers published by the Open Group, the seven levers. And one of the things to keep in mind is that they're not optional. You need to deliberately control your choices in digital transformation. And if you're not comfortable with that, please pop on the interstate. And don't ever turn left, because you've decided that you don't need all your controls. If that works for you, have fun. Second, we're going to talk about complexity. Digital transformations are a complex problem. And what you need to do is solve all of the steps in the problem. So I got a picture up there of the back end of a Saturn V and the back end of a Soviet N1. You want to get to the moon. There's a whole bunch of steps in getting to the moon. And the Soviets skipped one step. Having a successful booster. What did they get? Nobody walking on the moon, but they spent several billion dollars. How many projects fail because we left things out that were critical to the success of the project? If you're going to do that, stop now. Then we're going to talk about setting the seven levers. Back to my don't turn left. Do you have an active, deliberate approach to solving your problem? Are you randomly doing things? Or are you working in terms of a composition where you know what you want to accomplish? I've been talking a lot about control. And as an enterprise architect, there's one of the challenges of being an enterprise architect is that there's a belief in the space that we have to answer the next problem, the next problem, the next problem, which leads to an illusion of omniscience. Got to be there. Control isn't about always knowing what you're going to do. So what I want to do is talk about confusion. What does it mean to be in control? It's not a rigid plan. It's not light switching, popping a light switch on and off. It's about direction and boundary. I always think in terms of slow flight, if you're flying an airplane and you get into what's called slow flight, you're at the edge of losing control of the airplane. You're on the edge of it stopping being an airplane and starting to be a brick. And you need to be able and aware of the variances that are going forward. And for your organizations that are looking at a digital approach, you need to be very careful because you're now making transitions and in digital transformation, you're going to be going into your primary value chain and you're going to be playing with product, service, delivered to the customer. And now all of a sudden, things are risky because you are in slow flight. And when things go bad, they can go bad very, very quickly like they did for Captain Bows at Lethbridge. That was his last F-18 flight. He did an ejection and he broke multiple bones, but he didn't crash the plane into the crowd. Are you in control? Do you understand the approach that you're going to take? Are you able to move forward? So let's talk about putting you in control. Take yourself for a walk. So clarity about value, clarity about products, clarity about where you have constants and variables. And then we'll walk through the seven levers. I work a lot with technologists who talk a lot about value without understanding what it is. Value and important things are different. Michael Porter, who put together the basic value chain, highlighted this with the distinction between the primary and the supporting activities. Everything on that chart is important. Only things on the bottom part of the chart are valuable. Value is something you do that creates, that makes the thing you're working on worth more to a customer. If it's not making it worth more, it might be important, but it is not under any circumstances valuable. The challenge of digital transformation is we're dragging our information technology teams into the primary value chain, kicking, screaming, and unprepared. Because all of a sudden, they're moving from doing important work to valuable work. And the distinction between important and valuable cannot be overstated, because you're now playing with customers. You're now potentially producing the product that your organization is delivering. Today, almost all IT systems we use are supporting. Normally, they just do record keeping. People are doing work in the primary value chain, and we have a system that does record keeping. Keeps track of what they did. It's necessary work, but my Sigma training says that's waste. Necessary waste, but waste. I've got to get rid of it. I've got to cut the cost. I've got to minimize it. If you're struggling with this concept, go back to value. The best example from the Six Sigma world, unnecessary waste is paying your taxes. All of the work to calculate everything about taxes does not make your product more valuable. Your customers, in all honesty, don't care, other than maybe the trusted people who were talking earlier who have this thing about proper vendor relations. But apart from those people, it doesn't make an iPhone more valuable that Apple pays its taxes. It doesn't make a Honda more valuable that they pay their taxes. Necessary waste. Digital transformation means that now all of a sudden, now my IT systems are going to perform primary activities that generate value. My IT systems might, in fact, be the product. And now you're dragged into customer experience. And that becomes the critical foundation of understanding what we need to do for a digital transformation and may help explain why so many fail so catastrophically to deliver anything. A joke that what my team does is algebraic architecture. It's a complex problem. What we're chasing here is what's the answer that addresses a complex set of motivations. Doing architecture is easy. Solving for one thing is easy. In the Soviet effort to get to the moon, they solved for time to market. They were late. They started late. How do you catch up? They used off-the-shelf parts. What didn't they have? They didn't have the equivalent of the F1 engine. They had a bunch of second-stage engines. What did they do? They grabbed a bunch of off-the-standard parts and glued them together. And they needed their first stage to work for 42 seconds. And then it ran out of gas. They couldn't get 30 plumbing systems to stay together for 42 seconds. There were four N1s launched. All four exploded. Did they solve for all of the problem or did they solve for part of the problem? Next question you have are what pieces in your conversation are variables in which ones are constants? Every time you put a constant in, you're limiting your degrees of freedom. Degrees of freedom are really important. Where can you go? What can you vary? Hold something constant. Hold a technology choice constant. Hold a process choice constant. Hold an infrastructure choice constant. Hold a customer constant. You've made the equation more difficult. Where do you have variables? Where do you have constants? Second thing in the variable, if you're trying to move something, do you move something that's divided by 10 or multiplied by 10? You're looking for a bigger number. Are you working on the irrelevant or the meaningful? And if you have a good EA team, they're working on the meaningful. And more importantly, they're ahead of the curve. How many people here drive motorcycles? OK, do you prepare for the corner in the corner or before the corner? That's right. Before the decision is made, when do you want your EA team to provide you advice before the corner or in the corner? That means your EA team has to be ahead of the curve. And they need to explore ideas before the decisions are made so that you can make better decisions about what it is that you're going to be working on. Once you're in there, that gets to classic of governance. Will they talk about that? Build on prior decision. Fundamentally, are we still doing what we're supposed to be doing? Are we prepping for the lean? Are we accelerating or decelerating? Or are we just about to go flying through space? So I'd like to think about your digital transformation. And remember, we already agreed that you don't ever have to turn left. Let's talk about setting your board, controlling your digital transformation, walking through the aspects of the seven levers of digital transformation so that you can get the outcome that you want. Walking the seven levers, we're going to talk about processes, customer engagement, digital products, digital services, or digitization, or digital or whatever of your product or service. We're going to talk about IT delivery, lever four, your culture, your strategy, and your ecosystem. The numbering sequences driven to readiness. It's very hard to work on lever six if you haven't thought about culture. It's very hard to work on lever six if you haven't thought about digital products. Because when we get to digital products, that's all about customer experience. I always find it interesting. I listen to other people talking about the paper, seven levers, and talking about it, or presenting on it. And normally, they put up the nifty circle chart. The chart we use in all of our work is this one, which says, what happens if you choose not to pull a lever? What is the implication of having that lever out of control? And what we're going to do is walk through all seven for what's the control point? Business processes, fundamental here. Can your organization do business architecture or not? If you cannot do it, you're going to struggle. And when you struggle, you're flying blind. What is the balance here in your processes with customer experience, with efficiency, with productivity? And I know the business architects in the world often talk about capability and organization, all sorts of cool stuff. We left all that out of seven levers because where work gets done is a process. It's where something happens. Your processes, your customers processes, your business partners processes, it's where it all happens. Can you control and design that? Can you change the process primarily through the throwing in of automation or the elimination of manual? Do you have loyalty? Are you building loyalty? How do airlines keep us loyal? It's bribery, it's straight up. Can they improve the customer experience of a flight? Not at all. Air traffic control, we'll put them on ground hold. TSA will cause you to stand in line and miss your flight. What can they do? Bribe you, airline points. What can you do in your digital transformation to create loyalty? That your customers are as after you and what you're delivering as those Apple fanboys who, to this day, stand in line saying, I need the newest and coolest. There's your example of loyalty. So engagement across the touch points. Do you even know where you touch your customer? Think about that airline example again. Where do they touch? Where are the touch points in your process and in your engagement with the customer? That's the seven level. Build engagement, build loyalty. Digital products, digital services. I won't let my team use consumer examples. Consumer examples are easy. Millennial whip sound. iPhone does digital thing. Pizza arrives. Boring. You want to do this? You start thinking about hard examples. Put digital into a jet engine. Embed yourself in that supply chain. Embed yourself in the product value so that we're in a position to understand where it is that we're going and what we're trying to accomplish because what are we doing here? We're touching value proposition. What's the definition of value? Customer will pay more for it. They won't pay more for it. That you did not make it more valuable. Go back to Apple and iPhones. What's Apple's market share of free smartphones? Approaches zero. What's Apple's market share of phones that consumer willingly pays $1,000 or more for? Approaches 95%. So Apple, last numbers I read, on being now the third largest smartphone manufacturer on earth takes 65% of the profits of the industry. What's the value proposition? Now let's talk about IT delivery. Guys who are trained to live in the supporting service. Guys who are necessary waste. If we're not working well here, our digital product has limited agility and we make imprudent decisions because we don't understand or we're gonna put something that doesn't have the right level of availability and change management and we're gonna make it publicly available. So all of a sudden now we're in the primary and we are delivering the product or we are delivering the service or we are performing critical value add activities. Digital first means that your IT service, the thing you're delivering is the product or is the service and should you give that to the same guys who can't properly patch your laptop. Well if you're in United it really doesn't matter because they're gonna make your life miserable anyways than resort to bribery. If you don't have a good culture for digital transformation you're fundamentally looking at skilled incompetence. Many of our organizations are designed not to be quick moving. So we talk about agile, we talk about time to market, we talk about all those things. What are we chasing? Learning. Do you have a learning organization? How old is a learning organization's history in management consulting? It goes back to Peter Senge, fifth discipline. I can't think of an earlier piece of work which I think comes from the early 90s. What was he talking about? The ability of your organization to absorb information and act on it. Are you managing your culture so that your organization is focused on learning? The drive here, the digital world has a pace of change that's radically different than the physical world. What is involved for, and I'm gonna use a consumer example because it's easy. I'm sorry about this after telling you I won't let my people do that. What does it take for Amazon to start selling automobiles? Do they need to go buy lots? Do they need to go buy a building? Do they need to do a whole bunch of those things? They don't. Pace of change allows you to go quicker. Like how fast they're moving into delivering groceries. When your digital product or digital service, your ability to extend or change it is dramatically faster. Which means that your organization's culture has to be optimized to flexibility. Where you're living is in a more flexible space. And if you're not living in a more flexible space and you have a culture that is based upon order, that is based upon authority, you're going to have a harder time. How easy is it to move culture? If you don't take a deliberate approach, it's impossible. Listen to the other presenters talking about what were in many regards cultural problems about how do we go forward with the adoption? How do we make changes? The process ones were easy. The cultural ones are far more difficult. And are we building a culture if you're involved in digital transformation for the things that touch your customer experience to be able to be adapted? Because what are you chasing? Value proposition and loyalty. Your customers have a choice. And the last lever is strategy. And I have a picture there of D-Day. The Wood and Pig Rifles D Company from the Canadian Army. I have the picture very deliberately because of a young man, H.L. Joylands. Strategy we often think is what the bosses, bosses, boss does. They make deliberate choices. What we need to do if we're going to embark on a digital transformation is have the ability to hear the tones, to hear the nuance and to set and control a strategy. And what's the most important component here? Consistent communication. And very deliberate organizational design. Very deliberate value chain design. Think about that value chain slides back when I was talking about Michael Porter. Every industry has one value chain. Every company makes deliberate configuration choices in their value chain. If you cannot communicate the deliberate value chain configuration choices you made, your people get confused and pursue different paths. In your value chain, are you performing function or did you deliberately choose to have a third party perform it? If you deliberately chose a third party and your people are working on doing it, they're not following the strategy. Decompany hit the beach with four landing craft. Two of which were sunk or disabled before hitting the beach. 50% casualties on decompany going in before they hit the beach. And they were the guys who were going to lead everybody off the beach. Decompany's commanding officer was killed in action when his landing craft sunk. Second in command was off on the beach offshore when his landing craft was disabled. Third in command didn't make it to the beach. So H.L. Jones, a very, very young second lieutenant rallied 50% of decompany and understood the strategy. He understood the approach and he led them off the beach. Sadly, he didn't live through World War II. He died a few months later as a major leading an assault in Netherlands. Second lieutenant, captain, major in a couple of months. When you're building your digital transformation we have an ecosystem, building a combined market to get synergy, to play with partners so that you can do a better job in here. This is the last leap because it's the hardest one. If you're not good at any of the rest of Leavers and you have them out of control and they are flopping around on your control board, what are you gonna do if you try to create a market? If you try and create an ecosystem? You'll confuse everybody else. This is one of the very hardest ones because what you need here are clarity on what every one of the participants wants. You need to be very good at understanding how they view value. Are they a player? Are they a partner? Are they a competitor? And that one because a nuanced understanding because if you're building a partnership across it you are going to have conflict through the entire ecosystem because if your partners don't overlap in their capabilities, you have an air gap. So use a mental model of air gaps. Think about a watch. Think about a clock spring. Think about gears and then unhook them. How fast are you gonna have to turn one of the gears to get enough airflow to make the other one move? Or have an interlocking thing? So in conclusion, some final thoughts about complexity, information and agility, foundations that aren't directly tied here. Complex problems. Don't have one answer. There's no right, there's no wrong. You cannot do an apples to apples comparison of a complex solution. Because the moment you do something you have changed the equation. It's very difficult which gets back to your algebraic approach. Do you understand what are the moving pieces so that you can give it a try? And do you understand what's gonna happen? And have you thought about that before decision or are you gonna go into a curve you don't know is there out of speed and out of lean? You'd better have an ejection seat. In the digital world, information rules. What do we worry about? Applications and infrastructure. We worry about technical debt. Go on to a digital transformation, don't be afraid of having a forest fire or declaring technical bankruptcy. Get rid of it. The barrier to moving forward probably isn't worth it. If you've got multiple commercial options or multiple applications and those are getting in the way of putting something critical in your primary value chain, burn it to the ground. I hear a lot about people talking about enterprise agility and I just wanted to highlight here that enterprise agility has absolutely nothing to do with how you choose to do software development. It's irrelevant. If you're counting on software development to support enterprise agility, you miss the boat. There are five really simple attributes of enterprise agility. And they all come from work by David Gligord, who was doing work in supply chain. This is heavily stolen from supply chain agility. The five attributes. Can you spot a change, threat or opportunity in your ecosystem or market you live in? If you can't spot it, you can't be agile. It's irrelevant. Can you gather the information within a reasonable timeframe to make a decision? When you make a decision, is it resolute or is it an artificial decision? And having made a decision, can you implement it? How fast do you have to implement it as a function of your ecosystem? Think about Nokia and smartphones. How many years did they have before they have to get it right? They had enough time to fail. I think it was three times. Were they agile? The last one is flexibility. Where in your organization do you have structural barriers? The inability to bend, the inability to move, the inability to do the parallel bars. So, looking back, we know where we've been. We can see our footprints. It's often unclear where we're going. So thank you very much for your time and attention. Dave, thank you. You take a seat as well, please. I'm gonna sit as far to the left as possible. Okay, well, I'm coming closer then. There you go, whatever to the left. Thank you very much. I've seen you present on this a number of times and what I will say is, it's not the same presentation any time. So it's always different. Some strong messages each time but not the same presentation. So, questions for you? Are they easy questions? Because I'm a consultant. I like easy questions without an obvious answer. It's always easy if you know the answers aren't they? Okay, well, one we can kick another slide. The last slide's just gone. But it may be, I might help you with the answer. It may be an answer. Do you have examples you can talk of about using the Seven Levers approach successfully? Everyone wants case studies and I know you had a... We have two one. We have a case study up from one of our clients, CSC. Because there's a lot of technologists in the room, it is not the CSC you're thinking of. It's a Delaware company that does business services. Most of the challenge for examples and why I don't use them are our customers are using this for competitive advantage or overcoming their fundamental explosions and it's embarrassing or they'd rather not tell you. So I have a bunch of non-disclosure agreements than the nastiest one is unlimited personal liability. So they're the ones you can't talk about. So there is a detailed one there and I have heard that. In fact, I think you presented the early stages of that with them, which is a great way to do it. So yes, we believe it does work. Which of the levels do you see as the most difficult or I think I would translate that as where do you see, which one do you see customers have the most problems with? Culture and strategy, easy. They normally skip culture completely. People normally jump right into I need a digital product, I need a digital service and they don't think through the cultural implications in their organization about living with their IT services in the primary value chain and what that's gonna do to the operations of the business as well as what it's gonna do to their IT organization. And strategy you mentioned as well? Yeah, many people struggle with strategy. That's just, there's a reason Harvard Business Review writes a third of every article, every addition on strategy. So for my own personal interest, the strategy one is it's the people in the organization who aren't necessarily setting the strategy, struggle with it or those setting it, struggle with. Those setting it, those setting it, struggle with, articulating it and those following it don't understand it because it wasn't articulated. So you stressed at the beginning that this is all about control. Putting yourself in control. And you also said if you ignore one lever or rather if you drive your car and you never turn left off the freeway. Don't do a lea, skip a lever. So the message is you can't skip any. You have to do them all. You have to make deliberate choices about all of them. And you have to run it in concert. That's why we use the metaphor of the soundboard. If you don't have the different microphones in sync, if you don't have the bass, the treble in sync, if you don't have the volume in sync, just walk to the back of the guy who's on my right and just slide some levers on him and see how that works. Does it mean that you have to have it exactly perfect and have thought it out? No, understand how to maneuver the lever. And you may spend more attention, as with, for example, phases of TOGAP, you may spend more effort on one because it's more appropriate to your organization, not equal, okay, okay. There's a question coming in about OTTPS, so I'm not gonna ask you that one. That would be unfair. It's cool. It is very cool, isn't it? People should pay more attention to their supply chain, particularly if you're low giving in a digital world, and you have partners who are performing some of the services or functions. If you want a simple example of the importance of that, think about Facebook and the fact that they are likely gonna go through brutal regulatory review and fines because they couldn't control their partners. But this question, excellent, thank you. So, similar to, you've gotta do all of them, do you have to do them in any particular order? No, you don't. It just becomes harder. If you're in an organization that can't manage and change process, jumping into digital product may not go very well for you. If you're in an organization that has no clear understanding of the value to their customers, jumping into reorganizing their IT organization may not be all that helpful. Dave, we'll leave it there. Thank you very much indeed. Thank you.