Process Transformation

Welcome to Definitely May Be Agile, the podcast where Peter Maddison and Dave Sharrock discuss the complexities of adopting new ways of working at scale. Hello and welcome to another exciting episode of Definitely May Be Agile with your hosts, Peter Maddison and Dave Sharrock. How are you today, David?

I'm doing brilliantly well. So it's been a great uh break, a bit of a break from the airwaves, as it were, but good to come back. And we've got lots of uh interesting topics to pick up and and uh pull apart, I think, in the conversation. Now, in our intro, we kind of talked about digital transformations. I think nearly any of the clients that we're talking to, the prospects and so on, everybody's looking at digital transformation. So maybe let's just start. What is a digital transformation?

I think it's a great question. When when we look at the marketplace, there seems to have been this idea of there being four types of digital transformation that's come into the marketplace in the last four to five years. And those four types were uh process transformation, business model transformation, domain transformation, and a cultural organizational transformation. We thought we'd we'd kick this off by talking about the first of these, like process transformation. So when we think of digital transformation, what is process transformation in the context of a digital transformation?

Um great question. I I would argue that if you use the word transformation with most leaders, most transformation managers or champions, the automatic, the default assumption is it's a process transformation. This is certainly over the last couple of decades has been a priority, a focus of most organizations. And that process transformation, effectively, it's an operational efficiency play. How can we reduce our operational costs by automation, by better, more collaborative delivery, make sure we're working on the right thing, any number of different questions around that? So I think you start from the perspective that I would consider this sort of the lowest level transformation in the sense that you're almost certainly going to identify an area that needs improvement. There's some process that's not functioning the way we want it to. How can we go in there and transform that process to be more efficient, to be less costly, to be more impactful, whatever that process change uh that is required?

And and one of the problems that I immediately see arise with that is that if your target is cheaper, then you immediately bring in some very negative connotations into uh what you're trying to do. Something that's gonna almost certainly stand in your way of uh achieving some of the results you're trying to achieve as well. Um do we the driving for the for the least amount of money is uh not necessarily the best way to uh improve and optimize even a process, for that matter.

So it's it this is where we sit in that world of transformation, organizational change being synonymous with headcount reduction, uh, which is really what we're you're trying to call out there. And it can be an absolutely correct uh use of that phrase organizational transformation, which can lead to you know fewer bodies being needed, fewer people being needed to get the outcome. But in many cases, it's sort of used as this sort of synonym for we need to reduce headcamp by this much, therefore we're going to go through this change. And I I think that we want to separate the two out. A process efficiency is about basically reducing cycle time, reducing the amount of time effort it takes to go from A to Z, whatever that might process might be delivering. And I think when we understand it from that perspective, it leads to some of the first questions that define process transformation, which is where does it start and where does it finish? And how does that fit into the whole if I use a lean kind of concept of optimizing the whole? What is the whole and where is this transformation within that whole?

I mean, some of the there are some very valuable constructs within this too, like uh value streams as a way of looking at uh what is my end-to-end system work, how can I model that in a way that I can understand and then value streams can give you that uh time diagnostic of the system of work, which will then allow you to decide, okay, where should I focus? Where is the bottleneck? So that I can, which bringing the lean principles in to look at that end-to-end system and how can I start to change that process. I I do wonder if there's there's another aspect to this as well, which is the there's the the digital part of this. Like, how does our process change, or how can we change our process by applying digital technology to it, which is the the digitization aspect of this too, which is the like if we look at um instead of us uh filling out a uh form and faxing it to somebody, we uh we can fill out like a something like DocuSign and sign it online and it automatically gets uh sent in. All of that's now stored, and uh we use certificates to encrypt signature rather than relying on ink on a piece of paper, uh at least in countries that uh allow for that.

So I know we have some challenges in particular jurisdictions around that, but well, but uh I and that's I I think there are two elements to that kind of talk of process transformation. If I look at the lean context, processes always need transforming, they need a continual improvement. And that can that's because uh, you know, in in a in a as you're developing a process, you're going to bring in a lot of things which you'll learn over time aren't necessary, and we need that discipline of going in and sort of trimming the steps which were essential for us learning what we're delivering, but now we can start taking out, right? Taking these redundant or or low-value steps out of the process. So that process transformation is a continual need, and you will always have a process that needs improvement. The opportunity around digital transformation is is a slightly different perspective. It's less about operational, you know, kind of best practice, if you like, and more about what can we do that gives us a leg up, that gets us somewhere new.

I think this brings us to uh something we were talking about before the call around this uh the transformation with the capital T versus small T. This this idea transformation means it is all changing. Um the the type of I the two types you're describing there. The first is about incremental change. It's about looking at where we are today and what's the next smallest step change to get better, very often like the versus we're just gonna completely throw out how we're doing it and do it in a completely different way. We're gonna reinvent our current approach. We're gonna look at that from a totally different lens, a different approach. And it's that type of change, that which is transformational in nature, that is more of a step change and more uh, but also far more jarring to the organization. And we'll get into that when we start to look at some of the other um sort of models that uh they're describing of the four types of digital transformation. That's when we start to talk about the cultural organizational piece that uh is obviously very linked into this. If you make uh such large step changes, we you throw out the old um without considering the implications to your organization as a consequence of that, then you'll almost certainly not see the results you're expecting.

So I I like what you're describing there, that sort of two perspectives, the sort of continuous small T transformation, which is actually we should be doing all the time. And there should be one process transformation after the other as we look at different parts of our organization and so on in terms of improving, optimizing that whole sort of end-to-end process that we're delivering. Then I think there's another one which is much more steeped in sort of innovation, in the sense that it isn't just simply a case of introducing some new digital tool which allows us to smooth out the process, increase it or something, but there are real business opportunities that we can get um, we, you know, we can receive a benefit from. So, in a sense, that cut that kind of comes into who's involved in that process transformation. If that process transformation is, for example, CTO, CIO led within our technical delivery piece, we're probably looking at small T transformation in the sense that we've got a process that needs optimizing and getting better or trimming in some way. If we now have business at the table, if there's a broader strategic eye on the opportunities that we have there. And here I'm thinking of things like AI or how do you you don't want your technical organization just coming up with ideas on the AI side, you want strategy, business at the table to really understand your business problem and figure out the next steps.

Well, and ideally, not even ideally, but uh you if you're starting from a point where your transformation is, I want to use AI, then you're probably starting from the wrong point anyway. You should be starting from what is the business outcome. Like, what am I trying to actually do here? Because AI may not be the right solution. Just because you happen to have read an article about it at the weekend, this may not be the right way to go. It may not be what will help you solve the problem. Uh, and that could be very detrimental if it takes you in the wrong direction.

I was just gonna say I've had a very interesting experience this afternoon using AI web chat enabled. Just I I won't say anything more other than I had to go through the process like five times doing exactly the same thing because you can't get around the little trip-ups and these automatic steps and things like that. So, so there's a lot of there's there's times to use it, there's times to learn, and there's definitely times to be very careful about what the experience is and what you're getting from.

So if we were to wrap up uh this episode here on uh process transformation, uh what would three points be that we should leave our listeners with?

Yeah, I I really I think um that there's three really nice sort of separations. One is is um we started with it as the introduction. Process transformation is probably what most people think of of a transformation when we start. If you talk to any organization about agile transformation or digital transformations, they probably very quickly get into the space of what process can we modify, improve, optimize as a result. So it's the default place to start. Uh at least that's what people are bringing to the table. Um often driven by efficiency, cost savings, operational cost reduction, something along those lines. What I really liked that you added in uh as a result of that is this difference between small t transformation, which is the duty of anybody who has processes that they're working with. How do you make sure that they're fit for purpose, they're optimized, they're as as strong as they need to be, and no more complex than they need to be in some ways. So that's that small t versus the bigger transformations, which are where the opportunities are. How do you bring technology, digital technology to the table to identify opportunities? And there you need business. I think that will lead us into some of the other conversations that we'll have later about this, which is beyond process into business opportunities, whether new domains, business model transformations, whatever that might be.

I think I would uh I would the the last piece that we touched on there is kind of is critical too, is that when looking at bringing in uh new technology, when looking at uh digital transformation in in any of its forms, the focus needs to be on the business outcomes you're trying to achieve, not on the uh adoption of the latest, greatest, shiniest object into your system. Uh so it's uh I add that one in there too. Well, thank you very much. I always enjoy these conversations, and uh we'll wrap it up there today. If anybody would like to leave us any comments, they can at uh feedback at definitely maybeagile.com. And I look forward to next time. Peter, always a pleasure, looking forward to the next one. You've been listening to Definitely Maybe Agile, the podcast where your hosts Peter Maddison and Dave Sharrock focus on the art and science of digital, agile, and DevOps at scale.