Want Innovation? Don't Build to Last -- Build for Adaptation!

The pace of change in the world continues to accelerate. Business is global. Technology enables markets in New York to react almost instantly to changes in Shanghai. Technology gives us the power to be always on and always connected. Technology lets us create, distribute, and consume ever more information. And yet because there are still only 24 hours in a day, we can choose to work longer or to spend less time digesting and understanding each bit of information. All too often, we have more data and less insight. Consumer and business partner needs are evolving quicker. Competitors are constantly bringing new products and services, new financing mechanisms, and new product and service delivery options to market. There appears to be no retreat from the onslaught of change. Firms will either manage this new environment successfully or they increasingly be left behind by competitors who do. 

I've covered some of this territory before on this blog, but it's worth repeating: those firms who manage this process well are increasingly distancing themselves from their competitors over time. The US military teaches its people that the OODA Loop (Observe, Orient, Decide, and Act) is the decision-cycle that fundamentally drives change in organized human endeavors, and relies on this principle to design fighter jets and naval vessels, to guide how they use information in combat, and how they create military strategies. Edward Deming taught the same concept over 50 years ago as PDCA (Plan, Do, Check, Act) -- a mechanism for continuous improvement and continuous learning. Toyota is today the undisputed master of this method, and has a market cap of $240B… more than 10X greater than the American auto companies. Paraphrasing Jack Welch, when change on the outside is faster than change on the inside, your company is dying. Also the same fundamental concept. Successfully managing the pace of change is not the only important capability for an organization, but that capability more than any other will determine which firms grow and thrive and which decline and die.

While technology is often an accomplice in driving the rate of change to accelerate ever faster, technology can also be an effective tool to help firms manage the rising rate of change. Paradoxically, in fact, it’s often the advances and innovations of these firms that are succeeding in using technology to cope with (and even thrive) in a world of constant, rapid change that drives the world to change still faster. Managing the pace of change effectively means adopting new approaches to business with short lead times while still meeting operational expectations. In other words, to innovate rapidly and effectively. Given the increasingly IT-centric nature of business, it’s natural that firms would look to their IT organizations to help them evolve and adapt – to be agile, to be innovative, and many IT shops are now struggling with how they can be innovative and agile, and how they can then help their colleagues in other business units be innovative and agile.

There are two primary challenges that IT organizations face in their efforts to become a strategic enabler for agility and innovation in their business. The first is a firm’s legacy environment, and especially it’s legacy of application maintenance. The second challenge is the declining ability to plan, predict, and execute on change initiatives within a useful time horizon. Both require a change from the traditional IT mindset to over come  successfully. IT organizations that simplify redundant applications and data, leverage industry standards to reduce interface dependencies and maintenance costs, and build  new business capabilities on top of flexible, capable platforms that work intelligently across client and server to safeguard data and enable users will increase business alignment and mitigate pressures for “shadow IT”. The net result is an IT organization that the business trusts and looks to as a strategic enabler for enterprise agility and innovation. In a nutshell, the era of “Build to Last” is over; the new imperative is “Build for change.” 

That said, if you know me you know I love irony.  When you think about it, building for adaptation really is building to last in a higher sense -- it's just that you're not building IT systems to last unchanged.  Instead, what you're building to last is your business success!   Ultimately, the question becomes what, really, do you want to endure?