Digital transformation from the inside out

Getting real: How to drive digital transformation at your company

May 23, 2018   |  

Digital transformation is all the rage, we all hear about it constantly. But how do you get past the buzzwords and make it real? Let’s dive into this, and don’t worry, wade right in, the water is just fine.

In my first post on how Core Services Engineering and Operations is helping to drive a digital transformation at Microsoft, I shared the four digital transformation outcomes that we use to tell our story. I also ended my post with a question customers and partners ask me all the time: “How did you drive those outcomes at Microsoft?”

Here’s how.

In the early part of our journey toward our own internal digital transformation, we were still trying to figure out how to organize and focus our work. It was clear from the start that a single point of accountability was going to be very important. And to be clear, when I talk about accountability, I’m not talking about ownership.

OK, what does that mean?

Here in CSEO we don’t own the entire company’s transformation—we frame up how we should do it, we guide how it unfolds, and we create tools and processes that allow it to happen. I work for Kurt DelBene, our first ever chief digital officer (CDO). Kurt was asked by our CEO, Satya Nadella, to lead our companywide digital transformation. He was given a considerable amount of freedom to define what the role of the CDO would be and how he would tackle our transformation challenge.

Kurt approached it in an eminently pragmatic way. As a sagacious colleague of mine often says, “If you don’t know where you’re headed, any road will get you there.”

Trite you say? Maybe, but, as these sayings go, also precisely correct.

Our initial challenge was to get a complete lay of the land, only then could we understand where we were headed. We started by creating vision document “North Stars” for each of our 16 core business processes. I won’t name them all here, but many of them will be familiar to you: Marketing, Sales, Online Commerce, Finance, HR, Employee Experiences, Support, etc.

We asked each of our teams behind our North Stars to tell the story of where their businesses are heading over the next two years—we wanted to hear the story from both the IT perspective and from the business perspective. The question we asked them was simple: What is your vision? We asked each team to craft one with an eye toward transformation, but we didn’t dictate what digital transformation should be for any of their specific functions.

We wanted to understand where each team was headed on three levels, we sought to see what the alignment was between their IT investments and their stakeholders, we wanted to dig into their high-level roadmaps, and to soak into the risks and issues they were pushing up against. We needed to tap into what they were doing so we could understand how much transformation they were already doing.

This took nine gritty months to complete, but we learned a ton!

We learned that each team had a clear articulation of where it was headed, but that each had visions narrowly focused on the point of view of their individual constituencies. Put another way, there was a lot of up and down thinking occurring, but not enough pondering of end-to-end scenarios. This was not a huge surprise given that Microsoft is a massive company and we don’t necessarily expect everyone to take both a deep functional view and a broad cross-company view.

For us, the importance of being vision led cannot be understated. Together, we are more than the sum or our parts. The insights gained from our North Stars exercise gave us a solid baseline to ask the next critical question—was the sum of each of our business function North Stars equal to our vision for digital transformation? If not, what was missing?

The simple answer to the first question is “No,” but it is more nuanced that. While each North Star was a great articulation of where each business function was headed, there was no common thread that tied everything together. We needed a real stake in the ground that said, “This is what digital transformation means at Microsoft, this is what we’re going to deliver end to end, and this is what things will look like where we’re done.”

We needed a clear sense of where we were headed together. The question became: How do we articulate what road we’re going to take together as one company, or as we like to call it, One Microsoft?

The answer became what we called our Digital Transformation Framing Memo. In it, we articulated a set of six “priorities” or “themes” that we believed we needed to rally around. These priorities are guideposts for detailed execution. They established a broad outline for what we needed to accomplish as a company without respect to organizational boundaries.

Here are the priorities we came up with. (Remember these are based on who we are and what we’re trying to accomplish at Microsoft—the process we followed is more important than the specifics).

Customer Centricity: We will help our customers and partners feel like they do business with “One Microsoft” across all products and channels.

Productive Enterprise: We will provide employees with a modern workplace, using our most modern productivity tools and build best-in-class business applications to make them more productive.

End to End Process Digitization: We must relentlessly simplify processes and policies to make it easy to do business with Microsoft. We will question our assumptions about processes at all levels and address the root causes of complexity.

Launch Optimization: Our launch processes must be predictable, nimble, and compliant—enabling Microsoft to go to market and sell more quickly.

Modern Cloud Centered Architecture: We must build common, nimble, secure, and reliable systems that are instrumented for telemetry to gather data and to enable experimentation.

Data and Intelligence: The core currency of our business will be the ability to convert our data into insights, leveraging AI to drive a competitive advantage.

Adopting these six core priorities allowed us to pick the road on which we will travel together as we transform Microsoft—our journey has begun. What does your road look like?

But wait – there is more meat in this sandwich!

Now that I have shared our framework for internal transformation and our six priorities, we now need to add some protein to our meal. In my next blog post, I’ll break our six priorities into 11 broad, end-to-end scenarios (or investment areas) that we are working against, and I’ll talk about how we prioritize how we use those scenarios to guide the work we do next with our internal business customers. Check back in this space soon for that blog post.

If you missed it, you can read my first blog on our Microsoft digital transformation pillars here.