Big companies can win with information technology if they adopt the practices of digital leaders. Operational excellence needs to be updated with product excellence.

1. Don’t Just Improve Work, Innovate
Continuously
Brad Power
Co-Founder, MAXOS
Management Consultant in Process Innovation
Frequent Contributor to the Harvard Business Review
Partner, FCB Partners
Co-Founder, CXcelerator
Keynoter
Board Advisor
bradfordpower@gmail.com
October 2016

2. 1Copyright 2016 – Bradford L. Power
Tectonic Shifts
From To
Competitive
Megatrends
Hardware
Products
Transactions
Software
Services
Lifetime Customer
Value
Performance
Optimization
Operational
Excellence:
Consistency,
Reliability, Low Cost
Adaptability at Scale:
Continuous
Experimentation,
Personalization
Organization,
Architecture
Monolithic, Hierarchy,
Batch, Waterfall,
Intuition
Products, Matrixed
Services Teams,
Microservices, Data
Innovation,
Improvement
Projects, Manual
(People), Stage
Gates
Continuous A/B,
Automated Testing and
Integration (Machines)

3. 2Copyright 2016 – Bradford L. Power
Existential Threats: Software Startups and
“Apex Competitors”
• Continuously upgrade
products and services
• Hoard customer data
• Winner takes all
dynamics
• Scale effortlessly
• Never rest
• Vertically integrate for
adaptability
• Attract top talent

4. 3Copyright 2016 – Bradford L. Power
GE Example: From Industrial Leader to
Software Leader
• Jeff Immelt, “You go to
bed as an industrial
company, and … wake
up as a software
company.”
• “Predix” platform
• Software Center of
Excellence
• Outcomes-based
customer relationships
• +$1 billion revenue
Source: https://hbr.org/2015/01/building-a-software-start-up-inside-ge

5. 4Copyright 2016 – Bradford L. Power
Introducing the Software Apex Competitors
• Dominant predators
sitting at the top of the
food chain
• Software examples:
Alphabet/Google,
Amazon, Facebook,
Microsoft
• Top in market cap

6. 5Copyright 2016 – Bradford L. Power
Software Apex Competitors Have Found a
Way to Achieve Adaptability at Scale
• Small semi-
independent
microservices teams,
matrixed to strong
product managers
• Automated testing and
integration, enabling
lots of small
experiments
• No: bimodal IT, Scrum
Masters, QA step, OpsSource: “The Best Digital Companies Are Set up to Never Stop Innovating”, Brad Power, Harvard Business Review, May 17, 2016

7. 6Copyright 2016 – Bradford L. Power
Organize by Products with Matrixed Small
Services Teams: Google Example
Key Characteristics
• Product managers have
profit and loss
responsibility
• Small teams (3-7)
responsible for micro-
services
• Product managers guide
small teams, but teams
can support multiple
product managers
• Information systems guide
teams and coordinate
between teams

8. 7Copyright 2016 – Bradford L. Power
Opportunity: Big Companies Can Win with
Technology like the Apex Competitors
• Instead of incubating
startups at the edge,
build new products from
existing core
components, customer
and supplier
relationships, brand
• Expose new
capabilities to existing
customers

9. 8Copyright 2016 – Bradford L. Power
Problem: Big Organizations Traditionally
Minimize Risk (Not Maximize Adaptability)
• From an era when
failure was expensive
and deliberation a
virtue
• Data hoarded
• Decision-making by the
few
• Hierarchy
• Separation of powers
Slow and
Conservative by
Design

10. 9Copyright 2016 – Bradford L. Power
Legacy Systems and Practices Are Rigid
• Monolithic applications
slow and expensive to
change
• The innovator’s
dilemma: “Technology
debt”
• Fragmented data
• Rigid long-term
contracts with vendors
Source: Roger Camrass

11. 10Copyright 2016 – Bradford L. Power
How ambitious are you?
Levels of Ambition
1. Escape legacy
2. Become a modern
digital enterprise
3. Become an Apex
Competitor

12. 11Copyright 2016 – Bradford L. Power
Happy to Help You on Your Journey
• Does your organization
have aspirations of
becoming an Apex
Competitor?
• Contact:
bradfordpower@gmail.com