VMware’s ideas of what makes a digital organization show real leadership. But they also underline complexities and challenges for today’s enterprises as systems and ways of working converge, but the need to be distinct and differentiate intensifies.
VMworld Europe was running at the moment (even as its parent organisation sets up to be bought by Dell). This reminded me of CEO Pat Gelsinger’s keynote speech at the company’s US event in September – a serious injection of thinking about what it means to be a digital company in today’s world based on what he terms the Five Digital imperatives. These boil down to digital business driving
- asymmetric models – meaning you need startup speed, enterprise scale
- unification of cloud
- new security alignments and requirements
- proactive technology, as intelligent automation enables better action and prediction
- massive shifts in the tech world, as M&A etc. takes out competitors (irony)
A new digital agenda?
Gelsinger’s (and VMware’s) view sets out a robust framework for understanding the changes that are being forced upon, through and by digital businesses. This wasn’t exactly the first such piece (every day about a thousand thinkpieces on what digital means land on all our mail systems). But was vital leadership – as long as one understands and analyses the complexities around it.
Five imperatives = five challenges, five complexities, five opportunities in digital
OK, so the world is surrounded by digital this and that. Another opinion on this, even from a leader, is just an opinion. But these are firstly, simplified to a point even I can understand. Secondly, they illustrate that we’re coming perhaps to a common series of understandings about what digital means and how to address it.
But this is also is the challenge. Because while the overriding tone of Gelsinger’s speech and the supposed spirit of the ‘Five Imperatives’ is one of embracing dynamism and constant change, those five imperatives are implicitly resistance to adaptation as rules for living in the digital environment and as differentiation strategies. They are also full of contradictions across themselves that need to be considered. Let’s examine them again in the context of seeking competitive advantage.
The Five Imperatives: Five Es to consider
- Assymetry is escalating – Assymetry in business is, at root, about embracing change and imbalance in the system – an almost impossible task for most organisations and certainly non-digital-native ones to get. How can you learn from this idea and make it key to your differentiation without invalidating it from the start (by making it a new plateau)? Well, most won’t get it right. The only answer is to design propositions and business structures differently, not just around the customer but the idea of change itself. This is, of course, predicated on the idea of reduced legacy (because you can’t move fast enough to do this with a big legacy structure).
- Cloud is embedded – this can simply be seen as a next stage not in cloud but in a differentiation context of an arms race. This point can be seen as a natural clearing up of the cloud debate – as if VMware and others are, frankly, just fed up of all the dallying about and are taking the toys away to say ‘you will now ALL have hybrid cloud’. The issue is of course that this is inimical to the point above, which at heart is about embedding, and celebrating, difference and mismatched structures. VMware’s vision here seems to undercut the idea of being able to structure cloud in a way that enables that embedded dynamism and more importantly, may undermine the ability to seek differentiated market advantage.
- Security is essential – It appears self-evident that in a time of escalating, complex, systemic and targeted cyber-threats you need as few available threat surfaces as possible, which cannot be achieved by a ‘department’ of security, no matter how whiz-bang their knowledge and technology. The answer is to drive security into everything (hence: essential) at a fine grain level: every process, piece of technology, object, person, interaction. The problem here (ignoring the elephant in the room issue of how, taken to a deep level, this gets implemented) is the degree to which increasingly value-based entities, whose advantage comes from often unpredictable interactions and (see above) assymetries. Security protocols must be in everything, but cannot act to retard business innovation or prevent organizations from acting in the right way to advance, and outmanoeuvre competition.
- Automation and proactive tech are emergent – Predictive technologies are being driven into every facet of the business. The idea here is that the more (a) businesses are embedding analytics and (b) the more all repeat actions of businesses are automated, the more you not only achieve efficiency but also true prediction; therefore, in a digital age we will increasingly see proactive business able to get ahead of their customers. This is true of course – we see it already, particularly in retail, where predictive distribution is becoming more accurate (particularly driven by leaders like Amazon) and in energy, where it’s becoming easier, through better data, to scale supply to very specific demand cycles. However, like other steps: is this just an arms race? What happens when everyone’s got the same tools? Again, you’re back to symmetry, not asymmetry, and stagnation.
- Acquisition is everywhere – Gelsinger predicts most of the S&P 500 won’t exist by 2020 because they will be absorbed, or outcompeted. Here let’s focus on the first idea because it’s the harder one (the other is simpler: people will be removed from the picture). Big tech is getting bigger – but why? A key reason is found above: to compete, to be able to meet the technology-driven demands above, organisations must acquire. To avoid being the victim of asymmetry, they must bring in innovation engines. To compete, they must find new models – and the easiest way, traditional wisdom goes, is to buy them. As witness the purchase of EMC itself by Dell, and Oracle and others’ constant search for business to shore up their offers. The issue here is one of stifling the dynamism that the strategy is supposed to inject (major businesses find it hard to enable niche acquisitions to thrive; they often destroy what made them innovative. This is a hard thing to get right!) But it is also about a systemic move back to ‘big’ – big, centralized organizations with big muscles. In other words, a complete reversal of the first imperative. This is a hard circle to square. The only ways to do it are to avoid centralization and create innovative ecosystems of contributors or partners – accepting the seeming inefficiencies that CFOs and COOs hate to see.
From Imperatives to thinking
Of course, the true answer is that these Five imperatives are just that: imperatives. They are not designed as strategic planning, but to set out the key areas of change at the moment. And the principal call – to move into a stage where organisations are not wondering about what the best modes of cloud or security or automation, but are putting into place an agreed best practice, is designed to show that businesses of all kinds can free themselves from a technology tyranny and focus on how to compete in value terms to more complex, more personal and more diverse audiences.
Must-have attitudes, not rigid rules
Perhaps, in fact, the five imperatives are best seen as simply a list of ‘ways to think’ without structure, legacy or complexity to bog them down. In a digital age therefore, to win you must:
- Think no rest – if you design your business for dynamism that’s a lifelong commitment to permanent change. Ready for it?
- Think make best practice work for you – maturity of technology is fleeting. Use what you need. Then change. Use standards, but never stick to them slavishly. Adapt them for your best practice, rather than thinking best practice on its own is enough to get you ahead.
- Think be secure but able to move – perfect security doesn’t exist and pursuing it is a prison. Be as secure as possible, but no secur-er than you can innovate through.
- Think be predictive not prescriptive – automation can’t stop you thinking, or you might as well actually be a cog. Don’t let predictive tech make you think you can change time. And don’t let it switch your brain off.
- Think flocks not blocks – in today’s environment, business cannot, cannot be pyramids. They have to be shoals. Bring in experts. Make partnerships. Form ecosystems. Experiment. Disband. Fight. Reform. Maybe ‘think like a band’ would be better.
This is not going to be an easy world to live in – but it’s the one we live in
At heart of course, Gelsinger and VMware aren’t saying ‘here are five things that if you do them, you will win’. It might be couched like that, but that’s not the real message. The real message is the same that tough drill-sergeants in movies give to new recruits in a key scene in all war movies. Its messages is ‘we are not all going to make it; those that do will be the ones who listen to me’. In short: not everyone can win in the digital world. But then, when could they ever?