What can we learn from bankruptcies of K Mart and Sears? What can we learn from WalMart emerging as the largest company in the world (not Fortune 100, but Fortune 1)? And what does it have to do with Tech Teams, remote or otherwise? We know every business is a tech business in some form or fashion. We know businesses must use technology to survive and thrive. But digital transformation is hard. It is my hope this Tech Leadership example proves useful ….
a short history … in the 1990s, WalMart was smaller than K Mart and smaller than Sears. WalMart successfully applied Data Warehousing to create a competitive capability by cross referencing cash-register transactions with available inventory. Now this seems obvious, they mapped fluctuating demand, reflected in cash register purchases, with fluctuating inventory, reflected by products sitting in regional warehouses. This resulted in shipping limited inventory to places where the inventory was needed most, and when inventory was needed most.
In March, some demand is obvious: send flip flops to Florida and chainsaws to Alaska. In September, demand is less obvious, send Halloween candy to Utah (because Halloween is a bigger deal in Utah) and send Octoberfest stuff to Minnesota. This is applied technology to send limited supply to the place/time where demand is highest; involving thousands of stores, tens of thousands of product skus and highly fluctuating demand.
K Mart and Sears had exactly the same Data Warehousing technology. But their execs were resistant to change, and kept managing it manually. The result is K Marts and Sears had shelves full of un-exciting stock. Inventory turns became longer at a time when Wal Mart inventory turns were rapidly becoming shorter. Customer interest in shopping at K Mart and Sears dried up.
K Mart had the opportunity to create the same competitive capability. K Mart chose to stick with last century “top down” management. While Wal Mart created a competitive advantage through business intelligence. This is public knowledge from business case studies, and from first-hand experience when I worked at the data warehousing tech company for both WalMart and K Mart. Truly unfortunate to the 85 thousand employees of K Mart and Sears.
The essence of this article: The reason “digital transformation” is hard, is top-down, factory-style, management simply does not work for tech teams. Executives and Functional managers are, at best, not close enough to the technology to provide the right leadership. And at worst, Execs and Functional managers actively obstruct change to in the interest of preserving their spot in the org chart. These situations are easily diagnosed. Look for “leading from behind”, with unspecified, unwritten, or unstable goals. Also look for micro-management and fabricated, vague objections to change.
The remedy: business success is dependent on self-direct tech teams. Executives and Functional managers role is to frame the business problem, avoid dictating the solution, avoid constantly changing the goals and basically staying out of the way once the team starts to execute. The role of functional managers will evolve to cross functional team leads. Take a look at Microsoft for a great example of self-directed cross functional teams and the Program Manager role.
About Remote Tech Teams: It takes a team to create anything of consequence, isn’t it best to create a team where everyone is motivated to accomplish team results? A good program manager will assemble the team, share and refine the goals, define objective measurable success criteria. And in this healthier workplace, everyone, even the remote tech talent, can be a first-class citizen when team performance and common objectives are the focus rather than individual HR performance evals. Fortunately when self directed (and now remote) teams are the norm, global talent pools are now a possibility.
The best known method to accomplish digital transformation known to me, is self directed (now remote) teams with a truly empowered Program Manager and clear, shared and unchanging goals.
Every company is a tech company, in some form or fashion.
Applied technology is a business “king-maker”.
blog — Hubbertsmith.com