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Helping Businesses Through Digital Transformation–Futurum Tech Podcast Interview Series
by Daniel Newman | February 12, 2020

In the latest episode of the Futurum Tech Podcast, The Interview Series, Daniel Newman welcomes Chris James, CEO of Scaled Agile. Chris and his company focus on building frameworks to help organizations move digital transformation forward as seamlessly as possible. After all, digital transformation is no longer just about technology. It’s the blending of technology and humans as the industry evolves, which means businesses of all kinds are affected and could use some guidance dealing with constant change.

Chris discussed that though the term “digital transformation” has only been around for three or four years, the concept is much older. For example, we’ve seen disruptions from everything from social media and data to blockchain and companies like Google and Amazon. These disruptions have forced companies to rethink the way they do business. More specifically, every company needs to be a tech company to survive and thrive in the digital age!

Chris went on to explain to Dan that there’s now a clear cycle of digital innovation, digital disruption, and digital transformation. These changes in technology are so rapid that you really have to operate with business agility context in mind—or else you’ll be disrupted by every new wave of technology! You just have to become comfortable with the speed of change, which means taking on a growth mindset where you expect and thrive on change, and even look for the opportunities in it. Because in the end, digital technology can help you serve customers better.

It’s no secret that when the vision is understood, the likelihood of success in digital transformation is sound. But about 50 percent of IT projects fail, and not always because of bad products, but because of people. Chris noted that people come to work to do their best, but leaders don’t always lead the strategy to execution. It’s not always due to leadership not knowing what to do next, but changing the mindset of the middle managers and teams is an enormous task because they don’t have Agile DNA to make those changes. And the change is continuous, so the company needs practices that let you be agile and support implementing changes in strategy.

We believe digital transformation success starts with the CEO—but the CEO isn’t always equipped or available to help with technology. In fact, in our annual Digital Transformation Index, we found that just 25 percent of companies said the CEO has appointed a chief digital transformation officer. Chris shared that his research suggests that about two-thirds of companies have digital transformation teams in place, but still, the laggards are worrisome. When you have an internal team, you have a chance to take your organization through a change program and adopt a stance of continuous learning.

That’s why Scaled Agile created SAFe 5.0, which can, well, take Agile to scale. In the early days, the focus of Agile was on teams of 7 to 9, but now teams produce big systems, so they need thousands of people involved in marketing, legal, human resources, business operations, etc. It’s no longer Agile software context, but Agile business context. There’s now a need to change people and technology concurrently, and the framework helps. Sure, people don’t like too much process, but they do well with it. They learn better when they follow a plan, so it’s hard to succeed without the framework that SAFe 5.0 provides.

Chris summed up by saying that when we’re asking people to change the way they work, we owe it to them to give them training. They deserve to have the tools and proven practices to help them manage transformation. SAFe 5.0 positions companies to adopt a business agility stance, and help them manage ongoing digital disruption while transforming the business to maximize value for customers. After all, you can never go wrong if you’re delivering value to customers!

If you’re interested in how a framework can help an organization through digital transformation, check out more about SAFe 5.0. And of course, listen to our podcast to hear Chris and Dan’s thoughts on digital transformation!


Transcript: 

Daniel Newman: Welcome to the Futurum Tech Podcast, the Interview Series. I’m your host today, Daniel Newman, Principal Analyst at Futurum Research, and I’ll be joined today by Chris James of Scaled Agile.

Excited to have this conversation today. It’s been a lot of years that I’ve been super focused on digital transformation, written multiple books, been covering this topic on Forbes for a long time, and Chris James and his company, Scaled Agile, are doing some really interesting things in terms of building frameworks that can enable the enterprise, to basically drive their transformations forward. I look forward to talking about it going from the beginning, talking digital transformation, all the way through, talking a little bit more about what the company’s doing.

However, beforehand, I do have to do my little disclaimer early and often that this show, the Futurum Tech Podcast, is for information and entertainment purposes only. So while we will be talking about companies throughout the show, maybe some that are public, we are not soliciting, or providing, any investment advice.

Chris James, welcome to the Futurum Tech Podcast Interview Series.

Chris James: Thank you, Daniel. It’s great to be here. Thanks for bringing me on to discuss this important topic. It’s very interesting.

Daniel Newman: Yeah, we’ve been talking for months now, so it was good that I was able to finally corner you into coming onto this show. I’m just kidding, Chris was really excited to join. I think when we started talking about what we would talk about, you could see he was smiling, he was happy. As the CEO of Scaled Agile. This is a really big topic, the whole digital transformation, the blending of technology, humans and the evolution that industries and enterprises are going through.

Chris, before I jump in, I’ve got some really interesting topics and questions for us to talk about over the next 20, 25 minutes. But I want to give a chance for everybody out there that doesn’t know you, that doesn’t know Scaled Agile, for you to introduce yourself. Talk a little bit about your rise to CEO, that was a somewhat recent appointment that you’ve taken this role. And a little bit, just quick, about Scaled Agile.

Chris James: Well, thanks Daniel. Yeah, there’s a bit about my background. I’ve been in big IT companies for the past 30 odd years, started out at DEC, great company, great technology to bear in its day, and then a moved to Sun Microsystems. Many of you know, the dot in dot com. And vendors brought Java to market, and a lot of the internet was built around the Sun Microsystems technology. And they moved into Oracle, was at Oracle for a while, another great tech company. And then I left that big company, big IT company environment, and joined the Rally Software, which was at the time a startup around application life cycle management tools. And we went all the way up to IPO and the New York stock exchange, before finally being bought by CA. I jumped over to work alongside Dean Leffingwell, who had invented a product called SAFe, Scaled Agile Framework, and this was a product around scaling Agile. And I’ve been here for the past five years as a COO, and now CEO.

Daniel Newman: Yeah, well arise, obviously a broad background, but pretty much through tech all the way through. Hardware software, part of some of the key companies that have really been driving transformation inside of the enterprise. Software of course, has been such a huge part of shifting the way every business does business, but it’s also created a whole set of new challenges for companies because there’s more complexity, there’s more speed, change is happening so much faster. And I think that’s really what’s brought about this whole digital transformation conversation.

Let me ask you this, when was the first time you really started hearing this term, digital transformation?

Chris James: I think it’s been with us for the past three, four, five years. We didn’t have a name for it, but even back in the, when I was at DEC, we were disrupted by the PC, and then at some Microsystems we were disrupted, really, from building great data-centers, we were disrupted by the cloud contact, and needed to go from being a hardware company to a software company. So digital disruption has been around for a while, and the need for digital transformation was clear in the IT companies. I think what’s different about this context is that now that every company has to be a technology company to thrive and survive in the digital age, the digital disruption that leads to the need for digital transformation is just broader across all markets.

Daniel Newman: Yeah, you make a great point. And I love that you said that every company’s a tech company, Chris, because I say that all the time. So anyone that’s listened to me for a little while, has probably heard me say that. If you’re using data consuming data, using tech, using systems, driving experiences, there is a technology aspect to your business. If you don’t think a little bit like a tech company, think a little more innovative and disruptive, you’re probably going to run into a lot of hurdles and become really subject to some of these disruptions.

Now you mentioned three, four, five years. You’ve been hearing about this, but what has been that shift that you’ve been seeing over the last three, four years to where we are today in terms of digital transformation?

Chris James: Well, I think the disruption by the major companies and whether it’s social, big data, mobile apps, blockchain, the Amazon impact, the Google impact, the big digital dragons and the impact they’ve had on the way that business operates. They have been with us, it seems like a whole decade, but it definitely has forced every company to rethink the way that they do business. And so we’ve moved through this, what appeared to be a serial event, we are disrupted digitally, we transform, and now we’re operating a digital business. But now in this digital age, it’s really a cycle of digital innovation, digital disruption, digital transformation. And you have to operate, we’ve said for years that change is a constant, but the changes in technology is so rapid that you really have to operate with the business agility context, otherwise, you’re just going to be disrupted by the next wave of technology.

Daniel Newman: Yeah. We think of chaos as the new normal. That’s something we talk a lot about in our Future Proof book, that there’s seven key pillars. We actually said that the organizations where they’ve replaced stable and consistency with chaos as the new normal, are companies that are doing really well because of this speed of change.

Chris James: Yeah. And you just got to be comfortable with it, and it’s a mindset, a growth mindset, where you expect change, you thrive on change, and you’d look for the opportunities that change bring. It’s very easy to get into the mindset of why are we changing things, this is working. But if you look for the innovation that’s possible, and learn to live with that constant search for the next things, and keeping your eye on how digital technology can help you serve customers better, you’re just in a different place to thrive in this digital age.

Daniel Newman: Yeah. I think you absolutely hit it on the head. And it’s something we talked a little bit offline, but I’d love to have you share your thoughts online is that, when we’ve been talking about digital transformation, I’m a tech geek, you came out of tech, and when I first started researching the topic, and writing about the topic, and writing books and doing research and talking to the industry, I really wanted to believe digital transformation was technology transformation. I wanted to believe it was all about tech.

And the more I read about it, the more I researched, talked to customers, looked under the hood of companies that were succeeding, and companies that were failing, it became more and more apparent to me that agile goes well beyond IT. Agile is bigger than IT itself. And I think that’s become a big part of what you’ve, you’re trying to do. Talk a little bit about that, about how you’re seeing digital transformation move from being a really a tech topic, to a much more human topic.

Chris James: Many of our listeners will understand that the agile manifesto and agile practices for product development, software product development, and technical team activity, has been around the past 20 plus years, and that has served that community well. And what we talk about in Scaled Agile is how you bring some of those principles and practices that have been honed in the software product development areas, how you bring those across the organization. We’re finding, really, that that leads to all sorts of needs, which is leadership, lean, agile leadership that can inspire and bring that capability across the organization, and a continuous learning culture because of that continuous change, the continuous adapting to new technology, responding to changes in the market.

And of course that then takes us to organization agility, because often, as you’re being agile to respond to digital innovation and the changes in the market, you have to change your organization. So having constructs that allow you to adapt the organization quickly are very important. And one that’s come in lately is portfolio management. How do we manage the portfolio in a lean way, which means, really, responding quickly to changes in the market, having good practices around how you fund products versus projects. So there’s a lot of different areas that you have to really attune to, to really thrive in this digital age, in the context of business agility.

Daniel Newman: Yeah, absolutely. I think, Chris, the thing about change, and I’m probably… You guys are one of the most fit organizations on the planet to talk to this, is that when the culture is strong, and the vision is understood, then the likelihood of success in digital change or in technological adoption is going to be sound.

I still remember a CIO article, I read, it was some research that said something along the lines of about 50% of IT projects fail. Now again, it was around that, and it’s not exact, but it’s an absurd number. Because when you think about the products that are being brought to market by big tech, whether that’s a Microsoft, an Oracle, a Dell, IBM, they don’t create 50% bad products. Most of what these companies develop our working, sound products, but somewhere in the deployment the project goes awry. And I always say, it’s always the people. It’s never the product, it’s always the people. Is that what you’ve experienced in your work with these customers?

Chris James: I have a slightly different perspective on it, because when you think about the people that you work with, and you know socially, there’s not many of them you would say, I don’t want to work with them or I don’t think they would be professional. I don’t think they work hard. People come to work to do that best. And I think one of the things that we have not done well as leaders, is link strategy to execution.

When I was at prior big IT companies, it’s not that the leadership did not know what the next thing was that they needed to do, but changing the mindset of their middle managers and the teams was just an enormous task, because they didn’t really have the agile DNA throughout the company to make those changes. And because now change is continuous it’s very important that the practices that you have as a company allow you to be agile. The way that we plan, now, as a company, for example, if I contrast how I used to plan when I was at prior companies, five of us would get in front of a whiteboard in the morning drinking our coffee. We’d sketch out a strategy. We would be in agreement by lunchtime. This is a good strategy, let’s get it done. And then we would spend the next six months trying to persuade the rest of the organization to adapt to it. This is where we need to go, guys. This is the different way of working. And doing that across a broad organization, very, very difficult, and it takes too long.

And people think it’s optional, because you come in to those meetings, those all hands and you’re trying to persuade them and because they’ve not been involved in the evolution of the strategy, they’ve not been involved in any of the planning, they’re very passive in that process. What we have to do as leaders to respond to constant change in the digital age, is actually to involve more people, involve more leadership and more teams, to support developing input to the business context and the strategy, and then helping us implement it. It’s a different way of working and thinking that is needed for this digital age.

Daniel Newman: Yeah, I liked that. A different way of thinking. I can’t argue even a little bit with that construct. But you mentioned leadership, and I want to talk about leadership for a minute. I’m a strong proponent that digital transformation success starts with the CEO. However, the CEO is not necessarily equipped, from a technology capability standpoint, nor are they available, from a volume of time, to be the constant cheerleader within an organization to drive initiatives forward. And so, at Futurum Research we do a study every year, called the Digital Transformation Index, and we’ve got a couple of data points here that I want to discuss with you the leadership implications. Of the companies, we talked to a thousand different individuals from different from the enterprises, and only a quarter, about 24% in fact, said that the CEO has appointed a true chief digital slash chief digital transformation officer to oversee this transition.

And secondly, only 40% of companies have a dedicated team in place. And so you can have that CEO that’s a cheerleader, and you could be making the investments, but it seems to me these numbers are coming up short. And I know you’ve got some data on your side that maybe shows a slightly different number, but I’m interested, first of all, what you think about these numbers? Second of all, what you’re seeing in the marketplace and how important is it that dedicated resources are appointed to be the leaders, the day in and day out, leaders, of digital transformation inside the enterprise?

Chris James: Oh no, I suggest it’s two out of three companies that transformation teams in place. And you’re saying your numbers suggest 40, so somewhere in there is about half the organizations have made an investment and put in place a team to help lead the change that’s needed. And I think that’s goodness in some ways. It means that there are some laggards there that are not really understanding that the significance, or the volume of change they need to make to respond to digital change. So that is worrying.

We work primarily with a lot of partners, because the experience of going through a digital change is difficult. You can’t just wake up and say, here’s what we’re going to do. You need partnerships. You do need to bring in experience. But together with that internal team, you’ve got a chance then to take the organization through a change program. Because at the base of it, it is a people change program. People need to work differently. People need think differently. They need to lead differently. And they need to apply continuous learning, because things will change. Expect that. Adopt a stance of continuous learning. So it takes a change program, and it takes a team who keep focused on that and move people through that change initiative.

Daniel Newman: So let’s talk a little bit about what’s going on at Scaled Agile. So you mentioned to me offline that you have more than a hundred thought leaders in right now. Early this year, the company announced SAFe 5, which is the Scaled Agile Framework, fifth generation, fifth version. And this version, really to me what caught my attention, and brought my interest into this version of SAFe, was this connection being made with tech and people.

So historically, it’s really been a framework for agile related to technology projects. But you guys have really brought that to the next level. Talk about what that means, bringing it to the next level. Talk a little bit as well about what got you there. What made the company decide to take that leap and get to more than just helping with frameworks for technology deployment?

Chris James: Scaled Agile has a product called SAFe, and as you say, it’s on SAFe version five right now. And it really came out of the work that our founder did, Dean Leffingwell. He had been in a software development, and small company and large company organizations that were responding to digital, or in implementing digital products. And through that experience, he started to document ways of work improvement practices around agile, but taking it to scale.

Because as you mentioned earlier, the focus of agile in the early days was really around teams of seven to nine. What we’re working with now, are teams who are producing big systems to their thousands of people, 2,000, 5,000, 10,000. And where we are with version five is that we have called this the operating system for business agility, because it, it brings together not only the software development and the IT context, but also those who support bringing that innovation to market, those innovative business solutions.

So now it involves marketing to help market and package the solution. It involves legal. Human resources, people, operations to help hire the right people with the right skills and the right mindset, compliance and other business operation teams. So now we’ve moved from having an agile software context to having an agile business context, and SAFe 5 supports that around seven pillars. Key to which, are the foundational ones of lean, agile leadership and continuous learning. We use this now in the market, as you said, we’ve got a hundred thought leaders downstairs, and these are our partner, founder leaders who are helping us take this to market across the world.

Daniel Newman: Yeah, it’s a big take, and it’s a big challenge and I think for Scaled Agile it’s going to be some great new opportunities, and concurrently some very new challenges and hurdles. To become a partner and leader as offering the full change management, because let’s face it, digital transformation in the modern age, I know people get really uncomfortable when you say the words change management, but it really is modern change management, when you take the need to change people and the need to change technology concurrently, and a framework is really both important and profound in a way to me. Because people sometimes don’t like too much process, but concurrently, people do really well with process. So it’s like when you say to people, we want to do this on our own.

We don’t want to be too bound by a framework or by a curriculum, per se. But realistically, it’s been proven over time, people learn better when they follow a plan, a curriculum, a strategy. And you can go rogue for a while, but if you don’t have this framework, it’s really hard to succeed.

Chris James: We’re asking people to change the way that they work, change their practices. We owe it to them to give them good training in that context. And I agree with you, we all get scared when people talk about change management, because we’ve all had a change in our past where change has not been as effective as we want. What we think we’re doing, in our minds, we’ve got the change agents in the organization. What we’re giving them is the tools, the framework, the practices, proven practices, to help them manage these transformation. We really do focus on the change agents and they know what to do in terms of change, but what we give is the total package, in terms of the training and the practices and the toolkits to help them implement it.

Daniel Newman: So we have a diverse listening community, and we have a lot of IT decision makers, business unit leaders, general managers, those types that listen to this show. And so the way I wanted to bring this all together, Chris, I just wanted to get some feedback from you. How can this type of… Adopting something like SAFe 5, and this type of business agility, really help an organization going forward? If you had that elevator pitch and someone asked, what is your quick pitch, or your quick story that you’re going to tell people about how this say five is really going to help enterprises overcome these challenges?

Chris James: We believe that the framework positions companies to adopt a business agility stance, and help them manage through ongoing digital disruption, help them implement conceived digital innovation, and then transform their business, to maximize the value they take to customers. Right at the heart of SAFe is what we call customer centricity, and a focus on the customer. And you can never go too far wrong if you really are delivering value to customers. So we believe we’ve got the right set of elements, practices, principles to help focus on the customer, and then enable the organization to deliver that value to the customer.

Daniel Newman: Yeah, absolutely. Chris James, CEO of Scaled Agile, I want to thank you very much for taking a little time on this podcast. Telling the story of Scaled Agile, of the evolution the company is going through. I’m really excited to see more companies thinking about this marriage of technology and people. I feel like you have the two buckets, and they’re running side by side. There’s the change management people that try to get people to come along, and then there’s the tech company throwing every new software, hardware, gizmo and gadget, and calling everything digital transformation. But in the end it really is A plus B. When it comes together, and it’s done well, it creates disruptive products, it drives innovation, it leads companies into the next era. And obviously, as you just suggested, Chris, it leads to wonderful customer experiences. So thanks so much for joining us today.

Chris James: Thank you, Daniel. We’re here to support those customers as they go through that journey.

Daniel Newman: Yeah, and I’ll make sure that in our show notes, go ahead and check out Scaled Agile. We’ll leave a link to the SAFe 5.O press release so you can learn a little more about the framework. We appreciate Scaled Agile as a partner, putting this show together, bringing you on, Chris James.

For all of you out there that listen to the Futurum Tech Podcast, The Interview Series, we love bringing on these senior leaders, executives from tech companies around the world. You’ll see, we’ve had leaders across different industries, from semiconductor companies, to CRM ERP platforms, to agile frameworks like a Scaled Agile. So thanks for joining us. Hit that subscribe button. Stick with us. For Futurum Tech Podcast, I’m Daniel Newman. Appreciate you tuning in. We’ll see you next time. Bye bye everyone.

Disclaimer: The Futurum Tech Podcast is for information and entertainment purposes only. Over the course of this podcast, we may talk about companies that are publicly traded and we may even reference that fact and their equity share price, but please do not take anything that we say as a recommendation about what you should do with your investment dollars. We are not investment advisors and we do not ask that you treat us as such.

 

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