“We’re in the midst of a revolution.” So begins the preface to the book “Sense & Respond,” by Jeff Gothelf and Josh Seiden.
While that phrase could mean anything in our ever-changing environment, the authors are referring to the challenges companies face in becoming organisations that can continuously observe, measure, and adapt to changing customer needs and demands—much like software firms that update their products regularly with new features and versions.
For marketers, it translates into embracing new technology and even new software tools that allow companies to remain agile so they can effectively meet the challenge of providing the rich customer experiences that consumers crave.
Adobe’s Imran Afzal, marketing manager in the Nordics, had the opportunity to speak with Gothelf and Seiden when they spoke at the Nordic Adobe Symposium 2017. Here are the highlights from his conversation.
Q: What is the main idea that you put forward in this book?
Seiden: Every company of any size these days is either going to become a software company or it’s going to be put out of business by one. ... We’re seeing this in every industry, even highly regulated ones like health care and financial services.
Gothelf: Software is powerful. It gives us the ability to deliver services in a way that is continuously changing and evolving, and it allows us to sense what our customers are doing and respond with ever-better solutions. You may not think of digitally native companies as your competitors, especially if you work in a different industry, but your customers have come to expect this level of rapid response with their experiences on sites like Netflix, Facebook, and Google. Your competitors are developing it as we speak, so companies need to find a way to adopt this sense-and-respond approach.
Seiden: This has profound implications for how we run our businesses. It’s no longer sufficient to let IT handle the website while we run the rest of the business the way we always have done. Instead, we must build software operations into the fabric of our work, our teams, and our product and service delivery.
Q: Who would you pick as a best-practice example of how to implement this way of thinking and working?
Gothelf: Tesla is a great example. They have taken the traditional rhythm of the automobile—the annual cycle—and overlaid a continuous software rhythm on top of it. When they discover a problem or a new feature opportunity, they can update their cars over the air and overnight. So customers now get new features delivered as they are ready without having to go to the dealership and without having to buy a new car.
Q: How do you put the theory into practice?
Seiden: Well, every company is different, but it starts by creating small, cross-functional teams who can figure out which agile methods make sense for their work. These teams represent not only software engineering but product management, design, and marketing. And it requires leadership support and a willingness to rethink some very fundamental things, including budgeting, planning, resource allocation, product roadmaps, procurement, risk, and so on. In large organisations, these functions have a hard time handling continuous small changes. They’re optimised for big plans and long cycles. All of this has to change.
Q: How would you recommend organisations to start this transformation?
Gothelf: First of all, let’s acknowledge that this kind of transformation is hard. There’s no single recipe. Instead, there are some principles to apply, and there are experienced people who have done this before. It’s our strong recommendation to seek out experienced guides and to have reasonable expectations. Assign those experienced guides to small pilot teams. The goal of setting up pilot teams is twofold: They will learn how to work more closely together in a rhythm and fashion that maximises the benefits of the technology platforms available to them. And they will learn how to work this way within the context of your organisation, industry, politics, and regulations.
Once these pilot teams get their legs under them, more teams can come up to speed, using the best practices these early efforts developed. This won’t happen overnight. It’s a multiyear journey.
Q: What are some of the typical obstacles to success, and how do you address them?
Gothelf: The product and tech teams already get this. Convincing traditionally nontech disciplines to change how they work and support their colleagues is the biggest hurdle. Specifically we’re referring to finance, legal, HR, and marketing. Because we’re building and optimising complex systems that can learn and evolve in real time, the way we plan, budget, and approve the work has to reflect this pace of learning.
Seiden: Annual budgeting cycles quickly become an anachronism in the face of teams that can get new features to market in days or even hours. Convincing leadership to change the way they think about who they hire, how they incentivise them, and, perhaps most important, how they measure success is the biggest obstacle to building a “sense and respond” culture.
Q: Is this approach applicable across all industries?
Gothelf: We think so. We haven’t seen a single industry that isn’t feeling the effects of digital disruption, whether it’s hospitality, financial services, automotive, agriculture. You name it and you can find an example. So the competitive pressure and the problems of adapting to it is there. At this moment in history, agile methods seems to be the best answer we’ve come up with, so we believe that this way of working is the future.
Seiden: If you look inside your organisation, you’ll probably find that there are already teams working this way. The challenge for leaders will be to find these teams, nurture them, and spread their methods across the organisation, and make some of the hard changes necessary to lead in this new way.