“When it comes to digital technology, the persistent unproductivity of people still blows my mind. A lot of applications are interesting but unneeded in a cloud based, cloud doc world. My advice is to pick your ecosystem — if you can afford it, maybe choose two. The more you vary outside of that model, the more complex and expensive your world gets. The number of apps we have around us is insane.”
Robin Block: Digital transformation is an oft-cited buzzword — what does it mean to you?
Andy: Digital transformation applies to only one set of businesses — the aged and infirmed. It is a phrase pushed by consulting shops that sell services to cash heavy, old-world businesses — big banks, retailers, etc. Amazon doesn’t talk about digital transformation because they are digital. Small to medium sized business don’t aim to transform digitally because they either are or they aren’t.
I have worked in some of these old-world companies and digital transformation is extraordinarily hard to pull-off. It is not technically or financially hard, because they generally have an enormous amount resources, but it is culturally difficult. People who are equipped to pull-off digital transformation often don’t fit into the corporate environment. Digital Transformation is really about the bifurcation of the world into old-world industries that are struggling to reinvent and survive in a digital age, and new businesses that are trying to eat their lunch.
Robin Block: You have experience working at CBA — the preeminent big bank in much of the Southern Hemisphere — what was the source of their success implementing digital change?
Andy: While I was at CBA, there was a recognition that culture was central to digital transformation. Given the right circumstances, culture has the shelf-life of a banana — it changes quickly from the top down. A new leader, with a different focus, can change an entire organisation. I was lucky enough to spend my time there working for people like Ralph Norris, Ross McEwan and David Lindberg, all of whom understood this point.
It is important here, however, to not get trapped by culture as a buzzword. Culture is like the weather. Saying the weather is nice doesn’t mean anything. Some people like snow — I hate snow. Culture is about behaviour. What is important is looking at the behaviours you need to succeed and fulfil customer demand. If your employees love the company, but the company’s woefully underperforming, the definition of ‘good culture’ needs to change. Culture has to be about driving business success.
While I was at CBA, there was a commitment to transform the culture into one of ‘go fast, break last’ — make stuff happen. We wanted to be leaders and encouraged the open adoption of completely new ways of driving strategy. For example, in an old-world bank, you would never announce anything until it’s ready. In a Silicon Valley company, or digital start-up, you announce it and then build it — you create a feedback loop.We were the first big Australian firm to invest in Amazon and the Cloud. We were the first Adobe Cloud customer in the world at scale. This all stemmed from leadership embracing cultural change.
Robin Block: It is in vogue for large companies to say that they want to be like start-ups — having worked on both sides of the fence, what do you think of this proposition?
Andy: It’s hilarious. First, most of these people have never worked in a start-up. They have never sacrificed a salary because they can’t make payroll. Fundamentally, however, it means that they aren’t going to get anything done. Not only should they not attempt it because it’s not right for them, I simply have to ask — what do they even mean? People say they want to go faster — how much faster and why? They don’t understand that the average start-up takes around ten years to build. Is that fast?
I think that the most dangerous thing out there is information. Everything you need to know is a Google search away. But a lot of people get stuck — they aren’t learning by doing, just learning by reading. This approach almost always falls apart. There are no shortcuts to doing. You need to learn as you go along. 90% of people proffering advice — and, at least 100% of the media writing about it — have never built a successful business, written code or rolled the dice on a marketing campaign. There are a lot of false positives in the market.
My number one recommendation, when consulting on digital transformation, is for the leadership team to try and be a customer for a week — literally try and purchase your own products. It is obvious, but the main concern of a customer is to be able to engage with you in the same way they run their own life. If I live my life on my phone, I’d better be able to do everything on a phone — period. I think a lot of organisations struggle because their digitisation priorities are services that aren’t customer facing — putting services or processes on the cloud that are currently run on servers in a data centre, etc. Unfortunately, that is not the customer’s problem and the customer probably couldn’t care less. Customers want to be able to pay a bill with two clicks on their phone. New-world businesses are able to evolve and emerge quickly to answer material customer needs because they don’t have to fix anything.
I think that digital transformation is completely the wrong mindset for most large organisations. If you build on that mindset you will spend the next ten years fixing what you have and not making a difference to customers. Meanwhile, a whole load of start-ups are going to enter your space and eat your lunch.
Robin Block: Who do you look at and admire — where do you get advice? What do you think is the conversation people should be having about digital transformation?
Andy: I tend to look at and listen to the hard science people. Sally-Ann Williams, the lead engineer at Google in Australia is really smart, she knows her stuff and is doing as well as thinking. Matt Symons, co-founder of SocietyOne, and his wife, Mandy Symons, who run Red Marker are doing impressive work creating technologies that solve real world problems. I love people who go quietly about their work and build exciting and successful businesses that create genuine value. I look at people who couple thinking and doing.
In old-world business, there are the encumbered and unencumbered. Banks are unencumbered, they can turn around and spend $100 million on a project and survive. On the other side are large retailers. For example, I do consultation work for Office Brands — an Australian bedroom retailer — their CEO, Gavin Ward, can’t do that. They are operating on razor thin margins in a fiercely competitive market. They are making a success of the situation because Gavin is the kind of person that is good at bringing people in to challenge his thinking and then deciding what is possible. They make stuff happen. Again, the solution is taking a holistic approach to the problem and committing to change. I hear people talk about how they are going to hire an X or a Y, that is never going to be a solution. Great businesses bet the farm on strategy. It is a mistake, in this era, to bet on the status quo.
I think that talking about digital business leadership is outdated. Building a digitally smart business has to be a given. The intelligent conversation is about the details. For example, I think Blockchain represents a revolutionary construct regarding highly distributed information and the ability to swap and exchange information without core data sets dominating. My old boss, the CEO of Xero, and I disagree about this. I think Blockchain will become a source of competition for that platform over the next two decades. This type of conversation needs to be where digital leadership is staked out. This is what I am driving at with Group Lark when looking to merge products, build brands and transform. Conversations about whether a website needs to be mobile-friendly are simply baffling. It’s like suggesting that you should buy a colour T.V. That’s not helpful.
Andy Lark is the CEO and Founder of Group Lark — a global consultancy firm driving brand and digital transformation. Former CMO at Xero, Andy is also a board member or chair for a number of dynamic tech firms including Simple, Mercury and SLI Systems. Between 2011 and 2013, Andy was CMO at CBA and he has over a decade of experience as a VP & General Manager at Dell.
Andy has worked on all sides of the fence — building digital businesses, digitally transforming old-world behemoths and creating a successful consultancy firm that has a track record of adding proven value across multiple industries. We sat down with Andy to understand how he views the emerging digital age.