Quick links for this post
First, I cover examples of organizations who illustrate patterns and anti-patterns for DevOps cultural change:
- Example 1: What kind of company is Domino’s?
- Example 2: Why did Blockbuster Fail?
- Example 3: How did Nespresso Scale?
Then I talk through the four keys to unlocking DevOps cultural change:
- Key 1: Orient all teams toward your customer
- Key 2: Emphasize short units of work with frequent experimentation
- Key 3: Bring visibility of customer health and experience into every part of the business
- Key 4: Design with customer intent and consent in mind at every step
Want a TLDR? Skip to: These four keys to unlocking DevOps are interconnected
Example organizations to think through
First up, I’m going to talk about an organization that has grown massively in the past ten years — but it wasn’t always clear they would continue to be successful.
Example 1: What kind of company is Domino’s?
Domino’s is well known as a pizza company which became quite successful at franchising.
But in 2015, Domino’s began describing themselves as a technology company.
Part of the reason to make this statement may have been a clever marketing campaign — which worked, this generated headlines. But there is an important truth in the statement that relates to what we can observe about how Domino’s changed over time.
You may have seen some charts like this in the news in recent years. This graph compares the stock growth of Domino’s against big tech players and shows Domino’s stock growing at a much higher rate. This performance wasn’t always a given: prior to 2011 Domino’s stock price growth was slow, and customers didn’t like the taste of the product very much.
How did Domino’s do this?
Domino’s transformed not just their software teams, but their company.
Domino’s focused on their customer: do you remember that ad campaign in 2010 where Domino’s talked openly about how their delivery was great, but customers said their pizza tasted like cardboard That happened after a new CEO, Patrick Doyle came in and re-oriented the entire company toward the customer. The company publicly acknowledged problems in the taste of the pizza, formulated a new recipe, and committed to continuously focusing on customer needs.
Experimentation: Domino’s adopted lean and agile methods to build ‘fast fail’ behaviors and learn from them, and use low-cost testing instead of building business cases. Today, we are used to many delivery services showing us the status of our delivery on our phone after we order. Domino’s “pizza tracker” was one of the very first implementation of this kind of service and blazed the trail for modern online ordering systems. Their experiments have been very broad: it turns out Domino’s customers want “no-click ordering” (a way of re-ordering when you open the app), to order from their PS2 consoles, and to even order from the console of a Ford Fusion car.
Visualization: Domino’s has embraced transparency throughout the organization’s culture. This doesn’t happen just at headquarters: franchise stores include monitoring of key stats to employees can see how they are doing in real-time –very similar to how modern agile teams display stats about productivity and the flow of work for the whole team to see. Domino’s ordering apps also include the ability for customers to select a message that they’d like to send to employees in the store, and Redditors who work at Domino’s have confirmed that the messages show up on the company displays.
But not every company has been successful at transformation over time.
Example 2: Why did Blockbuster fail?
Did Blockbuster fail because they didn’t figure out that they should compete with Netflix?
This is a popular myth, but retrospectively some folks point out that the true story is not nearly that simple.
Blockbuster initially dismissed Netflix as a competitor. But Blockbuster’s CEO did soon recognize the threat and made dramatic changes to work to compete: Blockbuster came up with a strategy to beat Netflix. The strategy was called ‘Total Access’.
Back in the time when Netflix was emerging, we didn’t have the streaming tech we have today: not only did customers not have the bandwidth, we didn’t have modern datacenters, cloud computing platforms, or customer devices to stream on. This was a time when technology was moving from larger VHS tapes to play videos to DVD tech. The smaller format of DVDs empowered Netflix to start up a mail order business which disrupted “video stores” like Blockbuster.
But mail order wasn’t perfect, and Netflix hadn’t yet optimized mail order delivery. Blockbuster’s CEO, John Antioco, conceived of the ‘Total Access’ plan to provide both mail order of DVDs, but also to allow customers to return the DVDs in stores and pick up a new DVD at the same time. This fixed the problem of mail ordering a movie which sounded good on paper but turned out to not be to the customer’s taste as soon as they started it up on Friday night.
Blockbuster also got rid of their late fees to better compete. Netflix marketed themselves heavily on the fact that they didn’t charge late fees, and Blockbuster’s leadership identified that this was a key factor in causing customers to turn to Netflix.
After Blockbuster launched Total Access, they soon were adding customers at a higher rate than Netflix.
However, you know how this story ends — not even John Oliver could save two of the last remaining Blockbuster stores in the US.
Blockbuster failed because leadership was unable to effect cultural change across the organization
- Siloed innovation: The ‘Total Access’ program was built as a tech initiative by a new segment of the business
- Stronger allies were required: The program lacked critical support in the board of directors
- Franchisees felt blindsided and threatened by the program – they were worried they would become obsolete
You might think that the difference here is that Blockbuster’s physical stores truly didn’t have a future.
We do have evidence that innovative companies can combine and scale a combination of online retail with brick-and-mortar experiences. This brings us to discussing Nespresso.
Example 3: How did Nespresso scale?
Nespresso is an organization that takes culture change seriously, and their leaders attribute their success to their culture’s growth mindset.
Here is a simplified timeline of Nespresso’s growth based on their historical factsheet:
Why so many employees, and only 500 in digital ops? Nespresso isn’t simply an online retailer; they have a huge network of boutiques around the world as well as call centers for customer support. As of 2016:
- Nespresso is Nestlé’s fastest growing segment and accounts for 25% of Nestlé’s coffee sales.
- Nespresso products currently have a 25% margin compared to Nestlé’s overall margin of 15%
Cyril Lamblard is the Global Head of eCommerce at Nespresso. He emphasizes that everyone at Nespresso much focus on the customer journey – whether they are going into a physical store (boutique experience), or an online experience.
The key here is that all of Nespresso’s employees are oriented toward what they call the ‘Customer Journey’. They constantly experiment and collaborate to find ways to improve the Customer Journey, which has elements across both the digital platform, the retail stores, and in interacting with customer support staff in call centers.
Focus on the Customer Journey is stressed both inside the Digital Ops team (data + software) and across all parts of the organization. In his talk featured on the Forrester Research Podcast, “What It Means,” Cyril Lamblard emphasized the power of setting global goals across an organization to orient everyone toward customer experience:
I am the head of eCommerce, but my incentives on sales performance are not on eCommerce– it’s global. So we are winning all together.
Cyril Lamblard, Nespresso
Focus on the customer and creating shared goals across silos is an important way that CEOs and CIOs orient their organizations. This is essential in unlocking the keys of DevOps, and becoming a Domino’s or a Nespresso, rather than a Blockbuster.
The four keys to unlocking DevOps
Referencing the examples we’ve stepped through above, what are the key concepts and actions that both C-Level executives, DevOps practitioners, software engineers, IT staff, or anyone in an organization can use to help transform their organization’s culture and future?
Key 1: Orient all teams towards your customer
We’ve seen that a key element of success for both Domino’s and Nespresso was standardizing focus across the silos of an organization to center on the organization’s external customer.
This orientation brings people together across formerly disconnected parts of the organization. Everyone orients to the “compass” of the customer. This focus breaks down silos not only between Development and IT groups, but also between marketing, sales, and more.
At the leadership level: set shared goals based on the customer that spans multiple divisions of the company. All groups should be rewarded on these shared goals.
At the engineering level: collaborate with the teams you work with and evaluate your team’s success based on shared metrics. This means that development teams measure their success not simply with shipping frequency, but also with production failure rate and time to restore service. This means that IT teams measure their success not only on production stability, but also lead time for deployments and deployment frequency.
Working with Marketing, Sales, and Support: I can say from experience that customer calls work best when representatives from multiple teams are on them. I regularly work on customer calls with colleagues in marketing, sales, product development, support, and other teams across Redgate. A healthy practice involves team members from each of this team initiating calls and inviting colleagues from other teams on a regular basis.
Key 2: Emphasize short units of work with frequent experimentation
Innovation and a growth mindset require constant learning and improvement. This is a key part of Domino’s success story as we saw – they were able to stop building expensive business cases and use low-cost testing to find out what delights their customers.
At the leadership level: Set an example for psychological safety in your organization, and regularly work to measure and improve on psychological safety. Learning involves being able to fail in ways that are safe, controlled, and which help move the business forward instead of triggering blame.
At the engineering level: Automated pipelines in software development are an example of an important enabler for affordable experimentation. In this case, technologically, we’re automating a pipeline that we can use to experiment and learn.
Working with Marketing, Sales, and Support: Agile methods aren’t just for developers. Across these organizations, teams can also focus on constant learning and improvement, and work towards breaking down tasks and experiment relentlessly.
Key 3: Bring visibility of customer health and experience into every part of the business
Monitoring is a key that supports this, bringing everyone vision of the customer’s journey and experience, and the team’s current state. Remember, this isn’t just “monitoring” for a production environment, this is a much wider concept: think about how Domino’s displays team productivity and the customer experience to all members of the groups working in the store, as well as the way they innovated and introduced the ‘Pizza Tracker’ as a way to give visibility to the customer for the progress of their order.
At the leadership level: Empower employees to be able to make more decisions and take ownership of their work. This is a key to enabling experimentation and unlocking a DevOps culture. If you are a leader in a traditional hierarchical organization, this will require breaking down longstanding planning and control practices.
At the engineering level: Include instrumentation to learn about the customer experience into your feature design work. Regularly conduct customer research both with current customers and with prospective customers.
Working with Marketing, Sales, and Support: Work with engineers to join in on customer calls. Regularly think through how you learn from your customers and suggest new ways to be able to learn from them through the products your company creates, as well as through customer interviews.
Key 4: Design with customer intent and consent in mind at every step
Culturally, when we are orienting toward the customer – we want to observe them: how are they really using our feature? Do they use this new feature? Do they say they like it?
While doing this, we need to constantly think about the customer’s consent and intent regarding how their data is used and how it is protected.
At the leadership level: We need to strategically empower teams to protect customer data by default and invest in platforms that ensure that customer data is protected. Emphasize to teams that customer intent is just as important as consent: in other words, if the customer gives us permission to use their phone number for 3 factor authentication, it was not the customer’s intent that we use their phone number for marketing purposes.
At the engineering level, and working with Marketing, Sales, and Support: Include checks for security and privacy into the software and development cycle for every single release, and regularly review the procedures and identify where they may be improved. We also need to build our systems and our maintenance to help them survive hacking, disasters, and unexpected failures of all sorts.
These four keys to unlocking DevOps are interconnected
While I have discussed the “four keys” as separate things, they are all quite related. To summarize:
- We need to focus on our external customers and make improving their experience a shared goal across all groups in the organization
- We need to respond rapidly to the customer’s needs, which is driven by using short cycles of work, experimentation, and automation
- We need to be able to learn from customers both based on observation of their behavior as well as interviewing them
- In doing this, we need to be respectful of the customer’s rights, and pay close attention to making sure we have the customer’s consent as to how we use their data, as well as respecting what we understand are the intent on how that data is to be used. We also need to ensure their data is safe from disaster.
By sharing this mindset and goals with others in our organizations, we position our organizations to better serve our customers over time and to help our organizations succeed even in the face of difficult challenges.
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