Wednesday, August 27, 2014

Transformation: a Buzzword or a Necessity?

The other night, we watched the documentary Side-by-Side, produced and narrated by Keanu Reeves, about the transformation of the movie industry from film to digital.  What fascinated me was that the key players in the industry are still debating the merits of the two technologies 45 years after digital video recording was invented at Bell Labs.

The obstacles to this strategic shift were not limited to the maturation of the technology itself. There is a rhythm to the process of making movies.  Film is expensive so the camera rarely runs for more than 13 minutes.  Those on the set – actors, directors, cinematographers and the support team – are geared toward being “on” when it’s rolling and relaxing a bit when it’s not.  Next morning, the first thing that happens is a review of the “rushes” (the film that was shot yesterday and developed overnight) by the entire crew.  An out-of-focus shot or bad lighting won’t be discovered until that morning review.

Digital solves those problems but creates a massive change to the workflow of making a film.  Forty-five years in, many of the participants still aren’t ready to make the shift.

In your business, a strategic shift may not be so dramatic but it may be critical to your success. Technology is the key driver of the need for transformation in many industries.  Getting information to the right people at the right time improves quality and service as well as cost.  Get caught resting on your laurels while your competition is investing in the future and you might see your business begin to evaporate.

So, what do you do if you’re at a point where you believe that the survival of your business depends upon making a transformational change?

Transformation is not just a new buzzword to replace the overused “change management”.  Transformation means that there is a fundamental change in your beliefs about how you achieve certain results.  It involves a massive investment of time and money; so, it’s critical that you get it right the first time.

So, before you go through the intellectual exercise of re-strategizing your business, you must go to the core of why it’s needed.  There may be several reasons; but you must ask yourself which is the most important.

For the movie industry, the quality of the visual experience overrode all other factors, including cost and speed of production.  It wasn’t until digital technology could produce a better visual experience that it was embraced by some of the key players in the industry. 

One of my clients is CEO of a regional bank.  He competes with the Too Big To Fail banks in our local market by focusing on the customer experience when they visit a branch.  Many customers place a higher value on that experience than on whether they have the best online banking website or the coolest iPhone app.

That one priority is an expression of his personal values and must be embedded in every process of the bank – from hiring and training to the data that appears on the computer screen on the branch manager’s desk.

In the movie industry, the visual experience is the highest priority.  For my client, the highest priority is a belief that customers deserved to be treated a certain way when they do business with the bank.

So, the question you must ask yourself is not what will make you faster, better or cheaper.  It’s what is the highest priority and how can we best deliver on its promise. 



  1. John,
    Excellent post. Much has been written about the customer experience. Most organizations believe they can manufacture a customer experience in the same way that McDonalds can create a consistent French Fry by calibrating the cooking time to be the same in every restaurant. These organizations also have well-defined things they cannot do for customers, which stifles employee creativity and innovation. Once the 'cannot do' items are taken away, it leaves confusion with employees about how they can delight the customer in any way other than courtesy and friendliness.

    Banks are notorious for this, particularly because of the regulations they are subject to. I know of one local bank whose senior executives issued an edict to "wow the customer" and employees did not know how to do that. It sounds good to be combating the commoditization that the banks are facing by talking about customer experience, but most are not willing to ask the hard questions, such as "What could we do better?" and to include the aspects from the 'cannot do' list in that discussion, instead of accepting the status quo. They need to embrace an approach that looks at how their banks can impact the lives of their customers. That is the transformation that will truly make them different.


  2. Sid Gudes 1st
    Founder and V.P. at New Mexico Water Billing
    "Technology is the key driver of the need for transformation in many industries." The key driver is actually reducing costs or improving workflow/productivity, which all falls to the bottom line of increasing shareholder value. In the example above, this was constrained by the need to maintain the current level of quality. Once quality could be maintained, the benefits of the new technology to improve workflow and productivity could be put into place. But the purpose of that change is not to adopt new technology, it is to provide immediate feedback instead of waiting for rushes, reduce the number of hours spent filming (or is it now "digiting"?), so that a movie can be made for lower cost, leading to higher shareholder value. Part of being a business is to define one's mission. If defined properly, transformation can be made much easier. The classic example is "are we in the railroad business or in the transportation business?" The former looks to become the best railroad it can, the latter to move customer goods from point to point in the most efficient manner. I would argue that the latter is in a better position to transform itself, because it is focusing on the customer, not on the technology, and so would be much more willing and able to adopt new techniques and technology in service of that mission. (Aside: for decades, some directors have been in the habit of having a video camera run next to the film camera. Although they cannot see the film until tomorrow's rushes, they can review the video immediately, and so get many of the feedback benefits without having to adopt digital photography. There are other benefits to digital photography, of course, but clever people can adapt current technology without a wholesale changeover.)