Continuous Transformation: Change = Constant

This is the sixth in a series of blog posts on the topic of Continuous Transformation; the first five can be found at:

1. https://www.dhirubhai.net/pulse/continuous-transformation-introduction-steven-guggenheimer/
2. https://www.dhirubhai.net/pulse/continuous-transformation-technology-steven-guggenheimer/
3. https://www.dhirubhai.net/pulse/continuous-transformation-scale-part-operations-steven-guggenheimer/
4. https://www.dhirubhai.net/pulse/continuous-transformation-scale-part-b-leadership-guggenheimer/
5. https://www.dhirubhai.net/pulse/continuous-transformation-culture-steven-guggenheimer/

Now that we have covered the drivers of Continuous Transformation (Technology, Scale & Culture), the next conversation is what it means to be in a constant state of change or evolution.  

Continuous Transformation does not necessarily mean something is changing every day, but certainly at an ongoing cadence - at a minimum annually, and more realistically every 3 - 6 months. Not everything that changes has a direct impact on each individual or team, but the ongoing flow of change means that as a team member, or leader, you feel the force of change several times a year. As you become more senior and have a broader remit you, and your team, will absorb change on a more frequent basis.

In prior posts I covered a variety of changes based on different transformation drivers; now I will combine them into a more holistic framework. In this model I separate change into three types: Internal changes, which affect people inside of the company; Engagement changes, which affect how we work with customers and partners and are felt equally within the company and within the eco-system; and Macro-level changes that everyone can see.  Let me provide some examples for each category. 

Internal changes

• Product Development – at Microsoft, what and how we build products is always evolving. We’ve gone from creating client software that we manufactured on floppy discs in a plant in Bothell Washington, through CDs, DVDs, licensed enterprise offerings, SaaS, PaaS, IaaS services, and now new AI, Blockchain, MR/VR offerings and more. The constant change in product development and delivery is true for almost every industry, though certainly the rate of change in the tech industry is extraordinary. 
• Inorganic – the acquisition of other companies/technologies and teams has a variety of downstream impacts. This can be anything from the addition of new people, or a new team, into your group, new products for the field to sell, new partners in the eco-system, new competitors, overlapping or new IT tools and more. 
• Organization – changes in strategy, product offerings, acquisitions, partners, executive changes, or broader industry trends cause us to tune our organization for higher effectiveness. This has been a true theme throughout my career and in so many organizations we work with. Bringing your team through ‘re-orgs’ is an essential aspect of strong leadership. 
• Go-To-Market – The drivers of transformation provide a catalyst to continuously improve the way we work with customers and partners. Our go-to-market approach has evolved from just selling products ‘globally’ and generically, to selling products more effectively in local markets, to selling products in each market to specific audiences or organizations by segment, to our most recent focus on specific industries. Of course, this has an impact all the way back ‘upstream’ to our product and engineering organizations, our marketing teams, and more. 
• People Management – the way we manage, and reward people affects everyone, and it’s essential to providing motivation and keeping teams on track toward the right goals. Whether it’s the measurement system itself, or more tactical individual changes such as changing sales force incentives to help drive new products or partners, these are internal changes that people always notice! ??
• In my earlier posts I also noted a number of other changes such as the core infrastructure models we use to build software, office changes, geographic expansion, product line expansion, eco-system, expansion, etc. 

Engagement changes

Some internal changes do not affect customers and partners, but there are many that do: direct changes such as the people or teams that they engage with, to more subtle impacts, such as the way in which our sales force or partner incentives are tuned to align our collective outcomes each fiscal year. Some strategy changes may also have a direct impact both internally and externally. A few examples:

• Channel Extension - Extending our sales and distribution channels may change who we partner with, and how those partnerships and incentives are constructed. It’s not easy to tune the partner benefits so that each channel can be as effective as possible, while trying to avoid channel conflict or share shifting between channels. Any changes to channel or eco-system dynamics are keenly scrutinized by all partners. 
• Business Model - As business models shift with product or market changes, both customers and partners feel direct impact (which may be perceived as positive or negative for each customer or partner depending on the circumstances). The simplest current example is the shift to cloud, which drives change in everything from how products are built and sold, to partner economics, to how we are measured by Wall Street and by customers shifting from CapEx purchasing to OpEx.  
• Platform Evolution - The continuous change in what customers expect from the platform… going all the way back to DOS, then Windows, and today to Azure - requires us to adapt along with our eco-system of partners and ISVs to align with customer expectations.  This continuous shift in what is a “platform” is again closely watched by partners, customer and competitors alike. 

Macro changes

Some changes are broadly visible to the community and industry at large, including people and organizations that do not work with us. For example, we may enter a new market as we did when we released the Xbox for the gaming space. With this change we immediately had a new set of customers, partners and competitors to understand and interact with.  This changed some of our existing business approaches and partnerships, how Wall Street measured us, and more. Some of our other product teams within the company were also affected as these dynamics shifted, even though they had nothing to do with Xbox or gaming.  Another example is how we have evolved how and what we report to Wall Street to better measure the growth of our business.  We also begin initiatives such as the current conversation around the Ethics for Artificial Intelligence or our Carbon Negative efforts that resonate broadly than just our existing customer/partner base and at a global level. 

My intention here isn’t to be exhaustive, but rather to provide a sense of what it means to think about your career and your business journey. On that journey you will both create change and experience changes that you’ll need to participate in, get comfortable with, and sometimes drive personally. You need to be able to thrive in change to be an effective leader. This constant flow of change is what I refer to as Continuous Transformation. 

Operating Framework

I’m often asked how to create an environment that allows leaders (and our teams) to deal with ongoing change, around us or sometimes ‘to us’. In response to this question I believe that creating an "operating framework" allows you and your team to deal with continuous transformation. An operating framework defines your team structure, what and how you measure performance and, and your business processes. Together this framework maximizes the efficiency of the team, as well as each individual in the group, and provide the most flexibility for absorbing change. A well-built operating framework will empower teams and leaders to work as independently as possible, with clear roles and responsibilities. It also provides clarity for where and how each part of your organization partners with the other groups within your team, as well as the ability to work well with other organizations in the company and ultimately with customers/partners.

With each team I have managed, we reviewed and discussed options for our operating framework before we set the organization model. What will make us both efficient and flexible? What does success looks like, what do we need to measure, who are our customer/partners within the company and outside the company, where are the most efficient boundaries for clarity of roles and responsibilities between teams, where are the best aggregation points for teams and goals, what business processes outside of our organization do we need to align with, etc.  A critical part of the operating framework is ensuring that the right things are being measured/tracked, and that the ‘north star’ goals are clear to everyone, and each team can see their part in how to directly impact those goals. From there we can match the organizational structure to support our measurement framework, our key focal points, our business process/rhythm, and our alignment with the broader company business processes.  Trying to set up the organization, before understanding the operating framework, often leads to optimizing for specific people/personalities, which can lead to sub-optimal operations and poor tradeoffs. There is no perfect org model, but there are optimum operating frameworks….!  Add to that a cadence to ensure the team is having the right conversations on key issues within the team, and across teams, and that you are reviewing and adjusting the defined metrics as you learn more….and you have the starting point for an effective operating framework.

For you and your teams, the key is to recognize that we are all on a journey, and that journey is never a straight line so you will need to evolve with the changes that occur along the way. For me constructing an operating framework which is flexible and durable enough to continue forward on the journey while navigating change in predictable ways, and that helps everyone involved to be clear on their goals and deliverables, is critical to individual and team success. 

In the next – and last - blog in this series I will share the lessons learned around living and leading in a world of Continuous Transformation.

Until then, all the best

Guggs