Start With The Problem - Not The AI

[00:00:02] Welcome to another episode of Transformation Professionals, sponsored by CXO Transform.

[00:00:09] Crafted to enhance the strategic acumen of ambitious managers, leaders and consultants,

[00:00:14] we hope you enjoy this episode about Start With The Problem, Not The AI.

[00:00:19] Here's Rob Llewellyn.

[00:00:24] Today, we're diving into the world of digital and AI transformations,

[00:00:29] a realm where almost every company has dipped its toes.

[00:00:32] Yet, the real challenge isn't starting the transformation,

[00:00:36] it's ensuring the changes become a permanent part of the corporate fabric.

[00:00:42] For digital and AI transformations to succeed,

[00:00:45] companies must first pinpoint the problems they're aiming to solve

[00:00:49] and then rewire their organizations for continuous innovation.

[00:00:54] This rewiring demands fundamental changes to talent,

[00:00:58] operating models and technology and data capabilities.

[00:01:02] Executives often grapple with scaling up their tech initiatives.

[00:01:05] It's one thing to run successful pilots,

[00:01:07] quite another to implement solutions that move the needle on company performance.

[00:01:12] The crux of the matter isn't technology itself,

[00:01:15] but rather talent and data,

[00:01:16] how to organize these at scale to deliver transformation results.

[00:01:20] This is where the real work happens,

[00:01:22] the big surgery on organizational structure.

[00:01:26] Starting a digital and AI transformation should always be about the business problem you aim to solve.

[00:01:31] When it's about serving customers better or delivering more value,

[00:01:35] the ending is usually a good one.

[00:01:37] It becomes easier to develop a technology roadmap

[00:01:40] when you precisely know the problem you're solving.

[00:01:43] With the buzz around generative AI,

[00:01:45] it's tempting for companies to find problems to fit this new solution.

[00:01:49] But it's crucial to return to the fundamentals.

[00:01:52] Identify the pain points first,

[00:01:54] then look for the technology that addresses them.

[00:01:57] Generative AI may seem magical,

[00:01:59] but it's not always the starting point.

[00:02:02] Take a consumer packaged goods company, for example.

[00:02:05] They might find more value in advanced analytics for pricing and demand

[00:02:09] than in generative AI,

[00:02:10] no matter how advanced it is.

[00:02:13] Talent is another cornerstone of successful digital transformations.

[00:02:16] There's often a myth that traditional companies can't attract the right talent for such initiatives.

[00:02:22] Yet, companies committed to a modern technological environment

[00:02:26] do manage to acquire the talent they need.

[00:02:29] Professionals gravitate towards workplaces where their skills remain sharp and in demand.

[00:02:34] Environments committed to the latest technological frameworks

[00:02:38] and contemporary software engineering practices.

[00:02:41] In terms of developing existing talent,

[00:02:44] it's often not the technologists who make the leap,

[00:02:47] but business people who understand enough about technology

[00:02:51] to envision how it can solve business problems.

[00:02:54] These individuals become the linchpins of new digital products or solutions.

[00:02:59] The full value of technology is sometimes lost,

[00:03:02] not because of the technology itself,

[00:03:05] but due to operational issues.

[00:03:07] Consider, for instance,

[00:03:09] a retail chain that implements an advanced inventory management system

[00:03:13] powered by machine learning.

[00:03:14] This system is designed to optimize stock levels

[00:03:17] and predict ordering needs with high accuracy.

[00:03:20] However,

[00:03:21] if the staff responsible for restocking shelves are not adequately trained

[00:03:25] or the supply chain logistics are outdated,

[00:03:27] the store may still end up with empty shelves or excess stock in the warehouse.

[00:03:33] This underscores the need for business leaders

[00:03:35] to oversee the entire operational chain,

[00:03:39] from technological implementation to staff training and process updates,

[00:03:43] ensuring that the advantages of the new system are fully realized

[00:03:47] and integrated into the day-to-day operations.

[00:03:51] This is why holistic transformation will always win over siloed departmental efforts

[00:03:56] that are commonplace these days.

[00:03:58] When it comes to outsourcing,

[00:04:00] the clear message is that technology development is far more productive in-house.

[00:04:05] If you want to foster rapid innovation,

[00:04:08] understanding the business context is essential.

[00:04:11] While external consultants can accelerate the process,

[00:04:14] they can't replace the innate competitive differentiation

[00:04:17] that comes from a homegrown technological capability.

[00:04:21] In the digital era,

[00:04:23] the perception of an organization's identity also matters.

[00:04:26] Some companies have started to view themselves as technology companies,

[00:04:31] regardless of their industry.

[00:04:33] While not every company embraces this identity,

[00:04:36] those who see technology as a key competitive differentiator

[00:04:40] must become adept at software development,

[00:04:43] just as they at finance or any other critical business function.

[00:04:47] The role of IT in a digital-first organization evolves too.

[00:04:52] IT becomes the foundation,

[00:04:54] enabling cybersecurity and distributing the tools and data needed for innovation.

[00:04:59] It's no longer the sole engine of innovation,

[00:05:02] but part of a distributed function that permeates sales,

[00:05:06] supply chain, manufacturing and R&D.

[00:05:09] As for the C-suite's role in a digitally transformed company,

[00:05:13] everyone has a part to play.

[00:05:15] The CIO, CFO and heads of HR and risk management

[00:05:19] must all adapt to foster a culture of distributed digital innovation,

[00:05:24] It becomes, as they say,

[00:05:26] the ultimate corporate sport,

[00:05:28] with every executive playing their part.

[00:05:32] Finally,

[00:05:33] understanding the complex landscape of IT is essential.

[00:05:37] The technology field is rife with buzzwords and complexity.

[00:05:40] Demystifying this space,

[00:05:42] focusing on what truly adds value,

[00:05:44] is critical.

[00:05:45] Going slow to go fast,

[00:05:47] investing in a shared understanding of technology

[00:05:50] and visiting companies further ahead in their digital transformation

[00:05:54] can provide the confidence and alignment needed for success.

[00:05:59] That's all for today's episode.

[00:06:00] Thank you for joining me as we navigate the transformative world of digital and AI.

[00:06:06] Until next time,

[00:06:08] keep innovating and stay connected.

[00:06:09] This podcast is sponsored by CXO Transform,

[00:06:14] professional development for managers, leaders, and consultants

[00:06:17] who strive for excellence.

[00:06:19] If you want to perform at your very best

[00:06:22] in the most sought-after transformation roles,

[00:06:25] visit CXOTransform.com.

[00:06:28] CXO Transform.