Digital Transformation Within Large Complex Cultures

Donal O'Mahony, Cheryl Kennedy, Nina Gallagher at UXDX EMEA. Video: https://youtu.be/36HALfhCH1k

Readable transcript: edited from the recording's captions for readability (fillers and false starts removed, punctuation and section headings added). Wording is the speaker's own. Timestamps are positions in the video. Names marked [?] could not be verified against the audio.

What digital transformation means

[00:00:06] Host: Just to remind you who's here. We've got Donal O'Mahony. He's head of UX and design at Fleetmatics. Fleetmatics is Irish, and it was sold last year for 2.4 billion, like a rapper. It sold last year for 2.4 billion to Verizon, and that's one of the biggest US telecoms companies in the world. We have Cheryl Kennedy, who's a director of digital design and data services, who just loves technology and has been building things since she was a kid. And Nina, who works at Accenture and is managing director in charge of management consulting, and you're very heavily involved in The Dock, which is the new Accenture design and development center in Dublin.

[00:01:01] I'll just start, guys. Digital transformation is the term of the day, but when I was starting out it used to be just called IT projects. What's going on? I'll start with you, Nina, and as I said, we only have one mic, so I'm going to have to pass it along.

[00:01:14] Nina: I suppose there are a lot of different ways to think about digital transformation. In my role as Accenture Interactive lead, we are the agency within Accenture, and we see ourselves as an experience agency. So for me it's around transforming the customer experience. But in order to do that, you need to transform how you operate as an organization. You need to look at your business model. What is it you're trying to achieve as the organization? What is your North Star? How are you going to disrupt the marketplace? What are the operational processes required to do that? How do you need to reorientate your business around the customer? And ultimately, what is the technology and innovation required to do that?

[00:02:01] I suppose I would sum it up in three ways. One is how do you reimagine the experience from a customer perspective. How do you reorientate yourselves around that. And how do you flex your technology platforms to deliver on those experiences. There's a lot to be said about it, but that would be my way to sum it up.

[00:02:28] Donal: I guess since we were one of the first SaaS companies in the connected vehicle space, we were already digital. So I agree with you, it's a very strange term. Everything's digital really at this stage. Our transformation was rather about how do we move software, how do we move to the web. It was actually a cloud-based product before the cloud, if that makes sense. Our transformation was actually the lean transformation, or the CI/CD transformation, or DevOps, or now the UX transformation, or design-led, that controversial term. But basically it means that your products are well designed, that you use design thinking. So our transformation is more around that side, rather than "we should really jump on this digital".

[00:03:13] Cheryl: I would say the digital transformation of our organization is ongoing. We are digital now. Where we're at is continuing that to the next stage of end to end. Not just focusing on the customer, but, as you're talking about, process, but the whole culture and our staff, because we've got areas where the mind is willing but the body is weak. So that's all about the long-term investment in transforming our internal technology, back-end systems, but also the tools that our actual staff use. Because we went through pushing out a lot of great stuff for our customers and then essentially asking our staff to work on the equivalent of abacuses.

[00:03:57] So that's been absolutely critical: taking us on the journey and getting that buy-in and investment for long-term, back-end, strategic change. And that takes bravery from the top, because you're going to sacrifice short-term results in investment for those kinds of infrastructure projects.

Fighting back against the neo banks

[00:04:15] Host: I'll stick with you for a moment, because the interesting thing about it is, when we think of user experience, UX is a term that's really grown up in the last three years. I was just discussing this today with a friend of mine who's a branding expert. When I think about brands anymore, I don't think about the nice logo or how they look. I think about how I've experienced that brand. Whether I like their app, what I like about the different aspects, will I go back and use that again, whether it's an app or a service.

[00:04:47] In terms of Barclaycard and the competitive landscape you find yourselves in, you're in a situation where a lot of these new neo banks, for example N26 and others, are emerging, and they're trying to win people over by ease of use, lower costs, free traditional banking services. The whole banking world has been transformed inside out. So when it comes to digital transformation as a competitive advantage, or a way of fighting back, holding back the Mongols on this one, how do you do that?

[00:05:20] Cheryl: It's actually a multi-thread strategy. From making sure, for instance, we've got accelerators working with startups. So we're doing a lot of investment in terms of not just trying to develop within, but bringing partnerships in and working with fintechs in order to get competitive advantage. But we also have a lot of money pumped into innovation working within the organization. So a lot of experimentation. We're doing things with artificial intelligence. We're looking at the different latest pieces. I've just completely forgotten... Bitcoin, but not Bitcoin, the infrastructure behind it. We're doing a lot of those sorts of things. So we test and learn across our organization.

[00:06:11] And also we do take advantage of our size in terms of some of the rollouts. You've seen things like Pingit; you've seen how we keep leading on some of the payments pieces and just pushing on that with the investment. As I said, I think we're just going to keep working on that. But you've got to work on the inside as well as the outside. So that's how we're fighting back. We're aware of the challenge. And I think our leadership right now is really getting it. Everybody talks it, but there's a difference between talking digital transformation and when you start to feel it through the entire bones and body of the organization. And we're definitely at that point.

Fleetmatics inside Verizon

[00:07:00] Host: Just in terms of Fleetmatics and its new role in the Verizon world. I see the acquisition of you guys by Verizon as Verizon trying to reimagine its identity for the next 20 years. Even looking at their acquisition of AOL and Yahoo, the creation of both these digital brands that are emerging, it's very much to me like you guys represent that change of culture for those guys. Can you tell me how you're fitting in there, and how, emeritus de cuisine aren't easy [?], how you guys are informing the future digital identity of brands like Verizon?

[00:07:34] Donal: Wow. It's a great question, because the first event I attended in Atlanta was last year, and as I sat there I realized this is actually the company pivoting, moving. I knew what it was in emails, but this was now about products as opposed to the network, as opposed to what we would have sold here, what a company like Verizon or other networks would, as that's at saturation point. And so their play, and many other companies' play, is now obviously on the content and on the data. And the more they discussed it, the more the figures in relation to our industry and the profitability in fleet telematics [?] were actually at the center of this.

[00:08:21] And I expressed it afterwards. I said, this is quite overwhelming. And I was told it's okay to be overwhelmed, because it's like a candy shop at the moment. And to your question, what they're investing in is to diversify, but it's not random diversification. Everybody said, "What are they doing buying..." well, Fleetmatics, trucks. And it actually is a very compelling story that I can get into a little bit, but not too much. But yeah, to re-answer your first question, that's the real digital transformation that's occurring on the Verizon side that we're part of. That's very exciting.

The Dock and a culture of cultures

[00:09:06] Host: In Accenture, you guys pretty much work with other companies that are trying to realize their digital transformation, and everything from UX comes into it. I urge anybody who has a chance to go and visit The Dock down in seven docks [?]. It's quite cool actually, and it's not just a tech company. There are designers, there are developers, there are social media experts. It's a whole hodgepodge. I would imagine there are even anthropologists there, for all I know. But the whole thing is really putting a stamp on how we could look at Accenture in the future. Because when I look at management consulting brands in the past, I see a lot of beige and traditional corporate suits, but you guys are changing that.

[00:09:49] Nina: Yes, The Dock in Dublin. We launched officially around February of this year, and The Dock is a global innovation center based here out of Dublin, which is fantastic for us in Ireland. We're creating a significant number of new jobs. And what's really interesting is that 80 percent of our employees in The Dock are new to Accenture. Accenture would traditionally have been a model where you come in as a graduate from university and you grow your way through the organization. But in terms of what we're trying to do in The Dock, we need a new set of skills.

[00:10:19] We've built it around three core things. Designers, to really bring design thinking and design expertise into reimagining the future with these organizations. We have developers, really building prototypes, minimum viable products. And then domain expertise, which can be anything from the industry to artificial intelligence and machine learning. So The Dock is really designed to work with our clients to help them reinvent their future, and also to reinvent the future for Accenture and build new assets and tools to really help our clients with their growth.

[00:11:02] So it's a really exciting time for us, and it's a completely different culture to the traditional Accenture. I think it's about time consultancies changed their culture. We need to really just work better with clients, bring in that design thinking expertise and those really specialized skills. So the culture within The Dock, and within the acquisitions we've made within Accenture over the last number of years, you were talking about acquisitions, is really building this culture of cultures and bringing in that new expertise that's really required. So very exciting times.

Taking people with you through change

[00:11:48] Host: I used to get nervous about change. I'm in the business of change, I mean, one of the most changed industries in the world when it comes to what digital has done. When I imagine what you can do with digital today, if you'd told me twenty years ago, it would have been revolutionary, even for journalism, and journalism has been torn inside out. And every time there's a new process introduced, like we do with social media or video, I have a meltdown every time. For someone who has had to deal with change a lot, I struggle with change a bit, and I have to learn it, and once I'm comfortable with it, then I embrace it.

[00:12:20] But the thing about change, and you touched on it, Cheryl, is when you talk about root and branch change driven by digital transformation, how do you get people who would be in traditional industries, with traditional mindsets, to embody a world where the first touch point with a customer will be through that mobile phone screen? There's the book that comes to mind, Who Moved My Cheese, and people coming to change how they do things: "I've done this for 40 years. Why should I do it now?"

[00:12:49] Cheryl: That's an interesting question, because we've experimented with different things. Like where you set up a different team that's purely in the new way of working, as opposed to being infected by the traditional. But then you're not really taking the rest of the organization, the traditional if you like, on that journey with you. And this is what I was saying about really feeling it in the fabric. I've seen it start and stop for many years, where we've started anew, pushed out the comms and everything else, and there's been a big hoo-ha around how we operate: "We are digital." But then you look underneath the covers and it's still not quite there.

[00:13:31] I think it's taken the broader world changing for us to be in a position, and everybody to be in a position... now everybody has access to social media. We live in a digital world. You've got your children living in a digital world. Therefore your organization now has an imperative to change, because you know that your job's at risk, or that you are missing out if you don't keep up and understand. So I think that as well as forcing it and trying to push it, it's now happening organically, and it's about supporting that organic shift.

[00:14:09] Host: You guys, when you think about it, are putting a SIM card in every truck, for example, and monitoring everything in the business. But you're basically rubbing up against very traditional industries. There's a telecoms industry that is in the business of change, but stubbornly so, and it moves from 3G to 4G, eventually 5G, Internet of Things, broadband. How do you guys find yourselves in this particular world, where the haulage business is a traditional business?

[00:14:48] Donal: Tesla are showing a sneak peek of their self-driving truck. But the biggest job in many states in America is truck driver, because it's a really big place and you don't want to be flying that stuff around too much; it's expensive. So there is a huge amount of change going on. And is it going to happen overnight? Absolutely not. And I would say where it's really exciting is that we deal with compliance issues as well, like tachographs and logbooks. And once we're piped into that, also smart cities, for planning, for blacks [?], bus detection, for parking, all this sort of stuff is starting to... as you say, the plumbing is there, the foundations for this.

[00:15:29] So a driver may have to take a break, may have to rest. They stop driving, it's acknowledged, it's automated. The Alexa piece was great as well, because it's very relevant, hands-free, for my industry. And what they do in that break, or how content is served up to them. Again, Huffington Post has been acquired as well, and other content providers. So it's just an incredible time to be working in this space, from all angles, from consultancy to banking to telecoms. And I really think we're getting to a point now where we're not competing. Everybody is just getting on this enormous bus.

Is there a playbook?

[00:16:24] Nina: I think every organization knows they need to change or risk becoming redundant. So I think every organization is facing it. I think the challenge is where do they need to start and how do they digitally transform their organization. And one of your questions was, is there a playbook for this? Sadly, no, because every organization is different, and where they start and where they go to depends on what they're trying to achieve.

[00:16:56] We go in and we help organizations. I think the most important thing is that you have the backing of the leadership team and the CEO, because without that it is such a challenge. And if the CEO is behind it, that then transforms the culture, the ways of working, Cheryl, which you were talking about, within the organization. The whole organization is rotating itself to become this digital organization.

[00:17:23] What we tend to do is, we always recommend starting with the customer and working backwards. Identifying what is the experience you're trying to deliver to your customers. Really understanding what the pain points are today. Simple things like mapping out the current journey: where are the pain points? And then looking at how you address those pain points. Look at what other organizations are doing. Look across industries. And that's a key one, because a few years ago some of the banks used to say to us, "Don't tell me what other industries are doing. I want to look at just banking." You can't do that anymore. And Cheryl's nodding madly there.

[00:18:06] So by really doing that research up front, really understanding where the problems are, then it's around how do I solve for those problems. It's about working through where do we want to get to, what is our North Star, and then identifying how you get there. And I think a big road map of three years is not going to work in the new world. It's around testing and learning: getting some ideas up front, getting them out to the market, seeing what customers have to say. So I think there is no playbook, but, and I think many organizations don't do this, start with your customer first.

What comes after digital transformation

[00:18:56] Host: From the world of IT projects, to this new digital transformation, to what next? When everything is digitally transformed, does it ever end? What's the next thing?

[00:19:10] Cheryl: The next thing, and it's never going to end. This is the world we live in. And so I think the next thing is always about trying to anticipate the next thing. So that cross-industry thing is keeping an eye on the bigger picture, keeping an eye on the outliers in terms of the customer base, trying to predict what's coming along and get in front of it. Especially with ourselves, we prefer not to be a fast follower; we try to be a leader in some of the innovation spaces.

[00:19:39] And also, what's next? I think it's that cross-industry thing, and I'm going to say it again: taking learnings from everywhere and anything. It's throwing out what you think you know and just reimagining what you don't know, or what you might not ever think of, if that makes sense. And I don't think we do enough of that. We're always looking at what the competitor is doing. This is about true imagination for the next 50, 60, hundred years, and we don't do enough looking that far out, just theorizing and then hypothesizing with different scenarios around what that means for our business. That's not often done.

[00:20:24] Donal: I would say the next thing, now that we go through this digital transformation phase, will just be constant transformation. Get comfortable being uncomfortable. And so I'd say the next thing would be user-centered, customer-centered, whichever you prefer. And I don't mean that for the UX team, or whatever it will become. I mean for every member of staff, every CEO.

[00:20:45] One example of that would be a case study of a showerhead design company, and they became the fastest-selling showerhead on Amazon. And it was done through observational, ethnographic research. And what did that mean? It actually meant getting in the shower with the customer. Everyone laughed when they said that, but they had breakthrough after breakthrough by sitting in. I'm guessing they were in shower things, but it was the full deal. They also had two-way mirror stuff, and people were screened for whether they were crazy or not, on both sides.

[00:21:19] But they had breakthroughs: you always fiddle with the connector, hello lunch queue [?], and they break the connector, and they're putting their hand up, and every showerhead had that problem. They just put the dial to change the settings just out of the way of the stream. From looking and talking and observing in the presence of the people who use your fecking product. So it'll be user-centered, and that will be the new norm [?], and obviously that's where Accenture is going as well, being very focused on that. And at every level, every current silo will become the one team, ideally customer-focused.

[00:21:55] Nina: What next? I think obviously technology has a huge role to play in this, and innovation, and Internet of Things, AI and machine learning. That's a given. I'll give it to you from our perspective, which is really helping our clients digitally transform. I think it's going to be much more a change in the way organizations work with the likes of consultancies or agencies, around really connecting that customer journey end to end.

[00:22:24] Where we're beginning to work with many of our clients is on an outcome-based model. So we actually get paid, for one large automotive company, for every car that we sell. It's based on attributing that sale back to digital channels. So it's going to be very much driven around data measurement and really focusing on outcomes, as opposed to measuring NPS as an experience measure.

[00:22:50] Host: I think we've managed well with one mic, a first in my life. There we go. So thanks for bearing with us, and that was very interesting, guys. Thanks.