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What is a Digital Transformation?

The term digital transformation has been coined some years ago. It describes the process for an organisation or society to change in the digital age. Caused by more connectivity between individuals, the possibilities for new types of interactions have dramatically increased. This creates new forms of how we live together.

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Source Flickr: Tom Bennett

If we look closer on organisations and commercial companies in particular, we can observe more potential business models. These business models have much more variety than the standard eBusiness models that were implemented over a decade ago during the internet bubble. With mobile commerce and social media, customers can be reached via different channels in many places. This makes it possible for a business to get in touch with the customer at the right time and the right place. The value that is delivered to the customer can be higher but depends very much on the experience he or she has with this interaction. If the company is doing it right, the delivered value leads to more customer satisfaction and binds the customer more closely to the brand.

These new business models are also an increasing threat for traditional businesses. Due to the leverage a new market player can create, it may disruptively change even a whole industry. We have seen this in the music and currently in the publishing sector. Also the automotive industry is changing because the traditional vehicle-centric business model does not meet the expectations of young digital natives anymore. Automotive companies must shift from the vehicle-centric to a customer-centric business model. They will provide mobility services rather than vehicle products.

What needs to be changed?

As elaborated earlier, the business models will change. How does a company find a new business model? It’s an innovative act to create a new business that is attractive for customers and successful. Not every company culture supports innovation well. Very often they have been optimised for efficiency. Even when the senior management calls out for more innovation, the culture may prevent it. How can you create a culture for innovation?

A new business model can be successful but very often they fail. According to Forbes, 9 out of 10 startup go out of business. The environment for a new business is very uncertain. Often the strategy to implement a new business model is to invest a lot of resources and time founded on many hypotheses. These hypotheses are ideas that are later often proved to be false. Companies need to come up with new methods to deal with this uncertainty without spending a lot of resources and time.

The existing structure of a company is often another hurdle to overcome as well. Especially the new innovative cross-channel business models require changes of the internal processes that connect different departments and even devisions. The silos of such an organisation obstruct the process to find the solution. Creating the best solution requires phases of divergent and convergent thinking of together with multiple departments. Silos must be overcome to get the best out of the company.

Why is Agile helpful?

What we mean with Agile is the Agile with a big „A“ - the body of knowledge that is growing in the agile community. Agile (with a big „A“) is not just for software development. Although - due to digital nature, software plays always a big role in a new digital business model. Within the agile community the knowledge is growing on the whole value chain. Agile consists of practices that turn an idea into cash. Agile helps to deliver more customer value in shorter cycle time, hence increasing competitiveness.

Within the agile community the method Design Thinking is combined with software development. Design Thinking is used to create innovative ideas for new products. Main concept of Design Thinking is the interdisciplinary team that consists of people from different departments. This method helps product development teams to be more innovative.

The uncertainty to develop a new business model can be overcome by using the Lean Startup method. This method is combined with agile software development and develops new business models by testing underlying hypotheses step by step with minimal resource usage.

Apart from these new methods, the common agile software development methods help companies to get quicker from a business idea to real customer value. Cross-functional teams deliver digital value and use practices like Continuous Integration to get this done on a larger scale. The power of Scrum to drive the change in an organisation is a good catalyst for a digital transformation.

Seit einiger Zeit beschäftigte ich mich mit Design Thinking. Diese Methode hat eigentlich nichts mit Software-Entwicklung zu tun. Sie soll dazu dienen, innovative Ideen hervorzubringen. Agile Methoden verfolgen in erster Linie das Ziel, auf Veränderungen der Anforderungen zu reagieren. Aber wie kommt der Anwender oder Kunde überhaupt auf die richtigen Anforderungen?

Was ist Design Thinking?

Diese Methode basiert auf eine Reihe von Werten und Prinzipien, die jedoch nicht so gut niedergeschrieben sind, wie die Werte und Prinzipien im Agilen Manifest. Die beiden Wertesysteme sind aber sehr ähnlich und daher kompatibel. Zusammengefasst ist bei Design Thinking folgendes wichtig:

  • Gutes Design ist nicht das Ergebnis eines einzelnen, sondern eines interdisziplinären Teams.
  • Teams arbeiten iterativ in festen Zeitrahmen (Timebox).
  • Jeder wird zum Experimentieren ermutigt.
  • Fehler werden als Anlass zum Lernen angesehen.
  • Teams involvieren echte Benutzer in ihre Arbeit.
  • Jeder lässt sich inspirieren von anderen Ideen, Prototypen und Lösungen.
  • Empathie ist notwendig, um die Bedürfnisse der Benutzer zu ergründen.

Ein wichtiger Aspekt vom Design Thinking ist das interdisziplinäre Team, also ein Team, was sich in einer Firma aus verschiedenen Bereichen rekrutieren würde. Zu einem solchen Team könnten z.B. Techniker und Marketing-Leute gehören. Dieses Team durchläuft einen Prozess, der jedoch nicht starr und rigide ist. In den Prozess können je nach Bedarf Iterationen eingefügt werden. Ein wichtiger Bestandteil dieses Prozesses ist die Entwicklung von Prototypen, die dann an echten Benutzern getestet werden.

Konkret beschäftig sich Design Thinking nicht nur mit Werten und Prozessen, sondern auch mit Praktiken, in die in einzelnen Phasen des Prozesses angewendet werden können. Dazu gehören, z.B.:

  • Story Telling
  • Verschiedene Brainstorming Techniken
  • Prototyping

Wir bezeichnen Design Thinking auch als einen "Body of Knowledge", der von verschiedenen Seiten weiterentwickelt wird. Im letzten Jahr fand in Deutschland die erste Design Thinking Konferenz statt. Mittlerweile entwickeln sich lokale Gruppen, die sich mit Design Thinking beschäftigen. Aktuell wird gerade die Gruppe Design Thinking München gegründet.

Product Owner als Flaschenhals

In der agilen Methode Scrum ist der Product Owner verantwortlich für das Hervorbringen und Priorisieren der Anforderungen. Er legt die Anforderungen als User Stories ins Product Backlog und das Entwicklungsteam setzt diese Anforderungen um. Aber wie kommt der Product Owner zu den richtigen Ideen? Sind die Features, die er umgesetzt haben möchte, die richtigen? Da er eng mit dem Team zusammenarbeitet ist die Situation viel besser als im herkömmlichen Wasserfall. Der Product Owner kann direkt Ideen auf technische Machbarkeit mit dem Team klären. Ob diese Ideen dem Kunden bzw. Anwender der Software helfen und mehr als ein "Me Too"-Feature sind, wird mit dem agilen Vorgehen nicht angegangen.

Wedding Day by flickr:Mike_fleming

Die agile Community hat dieses Problem erkannt und schaut über den Tellerrand. Design Thinking bietet Anregungen, die Arbeit des Product Owner anders zu organisieren, sodass innovativere Produkte entstehen. Viele Konferenzen haben mittlerweile Design Thinking als Thema, so z.B. die SEACON in Hamburg oder die XP2012. Pierluigi Pugliese und ich waren bereits mit dem Vortrag "Innovation needs Waste!" auf verschiedenen Konferenzen. Ich bin gespannt, wie sich der "Body of Knowledge" Design Thinking mit dem der Agilen Softwareentwicklung verbindet. Beide Communities können von einander lernen.

Related to my last post on the need for documents during the design of software, I came across the topic of Design Thinking. Unlike analytical thinking, Design Thinking is aimed at building up ideas. It fits perfectly to agile methods, because it requires iterations and team work. I would say that agile methods include many parts of the theory of Design Thinking.

Here are some statements that I want to make related to Design Thinking:

  • A team should know the theory of Design Thinking in order to support best the generation of ideas. Agile coaches should explain to team, how ideas and solutions are created and what hurdles will probably in its way.
  • Our education has formed us to pick the first best idea and carry on with it. That may not be the very best idea to solve a problem. We have learnt that creating bad ideas is unacceptable. Children are very creative and can come up with lots of variations. We learn at school and from our parents what is right and get punished for what is wrong. Therefore we try to create right ideas and hesitate to communicate bad ideas. This blocks the idea generation within ourselves and within a team. If a team can overcome this issue, the creative output of the team will be higher. A team should be aware of this issue and create trustful relationships. This relates to "phychological safety" that is higher developed in a long lived team.
  • We also have another problem with intuition. If people bring up ideas, the ideas are discussed in a team to validate and merge them with other ideas. If someone has a intuitive idea, it will be difficult for him to explain it. He or she just knows that it's right. But without explaining the idea, the collaborative process to build a common understanding will fail. Either the idea will be lost - and maybe it is the very best solution - or someone else can explain it. This also relates to leadership. Leaders can have intuative ideas and others may simply follow without understanding it. They trust the leader.

Well, I think that a team that is aware of the principels of design thinking can use it to create better solutions. It may also help the team to create trustful relationships quicker.