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Vantiv ONE Recommended Read: Dual Transformation

Blog Post created by jim_roddy on Oct 9, 2017

I don’t like to start arguments, but I'll go toe-to-toe when I feel it's necessary. I did that recently during a discussion about resellers and software developers in the POS channel. “They have to change,” my colleague said, to which I quickly responded, “No, they don't. You're allowed to become irrelevant. You're allowed to lose money and close your doors. They don’t have to do anything.”

 

Obviously, I want all Vantiv’s partners in the point of sale channel to adapt and thrive. For them I strongly recommend Dual Transformation, one of the most powerful business strategy books I’ve ever read. I heard about the book while listening to a Harvard Business Review podcast recently and bought it immediately because it addresses what I think is the biggest challenge facing our channel and our individual businesses.

 

Dual Transformation talks about disruption and how to reposition your company for the future. Being part of the IT and publishing industries since 1993, I’ve seen my share of transformations, and the authors are spot-on about how to identify disruption and how to lead the transformation of your business. When you read “The 7 Warning Signs of Industry Disruption” with the POS channel in mind, you’ll be nodding your head in agreement – guaranteed.

 

I’ll share some of my favorite quotes and concepts below, but I strongly encourage you to buy the book and use it as a guide to transform your ISV business.

 

  1. The series Game of Thrones has a saying: winter is coming. It isn't winter that's coming to your boardroom. It is disruption. Disruption is coming. And it is coming at an unprecedented pace and scale.
  2. Creating a new business from scratch is hard, but executives of incumbents have the dual challenge of creating new businesses while simultaneously staving off never-ending attacks on existing operations.
  3. The time when leaders need to be most prepared for a change is right at the moment when they feel they're at the very top of their game.
  4. We call the process a dual transformation because it requires two transformations and not one. In response to a disruptive shock, executives must simultaneously reposition their traditional core organization while leading a separate and focused team on a separate and distinct march up a new hill. It's the greatest opportunity a leadership team will ever face.
  5. Four key leadership mindsets you need to succeed:
    1. The courage to choose before your platform burns.
    2. The clarity to focus on a select few moonshots.
    3. The curiosity to explore even if the probable outcome is failure.
    4. The conviction to persevere in the face of predictable crises.
  6. Companies that successfully execute dual transformation can own the future instead of being disrupted by it.
  7. Answer these five questions:
    1. Why have people historically bought from us?
    2. What do we provide that they really care about?
    3. What is the disruptive shift in our market?
    4. What used to matter to them but doesn't really anymore?
    5. What do they wish we could do that we don’t?
  8. As the world changes, what is critical to the customer also changes.
  9. In a quickly changing world, playing an old game better is insufficient.
  10. The simplest way to understand whether you're truly transforming your core business is to ask, “How have our metrics changed?”
  11. History teaches us, again and again, that disruption is the greatest growth opportunity a company will ever see.
  12. It is critical to discover this path by action and not by analysis. Every idea to create new growth is partially right and partially wrong. The problem is that you don't know which part is which.
  13. No business plan survives first contact with the marketplace.
  14. Successful innovators smartly manage risk through disciplined experimentation. Before the Wright Brothers built a plane, they flew a kite.
  15. DEFT: Document, Evaluate, Focus, and Test.
  16. Seek a stepping-stone strategy: look for a starting point where you can keep a foot in today's world as you venture into a new space.
  17. “Running a start-up is like being punched in the face repeatedly, but working for a large company is like being waterboarded.”
  18. It's never been easier to start a business, but that means it also has never been easier to replicate one.
  19. The more significant the new project and the shift is, the more the CEO should be driving it.
  20. The fundamental challenge for leaders is that the data showing disruption underway is always opaque. By the time it is crystal clear, it is too late to do anything about the disruption.
  21. Decisions can't be guided purely by historical data, because if data drives you, you can only go backwards.
  22. The 7 Warning Signs of Industry Disruption
    1. Decreases in customer loyalty, driven by overshooting. Overshooting: Providing a given market tier performance it can't use. An entrant can gain traction with a simpler, cheaper solution.
    2. Significant and lasting investments by venture capitalists.
    3. Policy changes open the door to new entrants. When governments change the rules, it can accelerate the pace of industry change.
    4. Entrants emerge at the low end or market fringes with inferior-seeming solutions. The innovator uses this foothold to improve the product and service so that it meets the needs of broader customer groups. When upstarts following this game-changing strategy begin to emerge, it's time to stand up and take notice.
    5. Customer habits and preferences show signs of shifting.
    6. A viable competitor fine-tunes a disruptive business model.
    7. Slowing revenue growth is coupled with increased profit margins as leaders exit volume tiers and cut costs. When incumbents begin to feel the pain from disruption, it doesn't always feel very painful. The slowing growth feels like the natural result of an industry maturing. Emerging disruptors grow in a seemingly disconnected market, and, if they pick off customers, often they are ones the incumbent doesn't care much about anyway.
  23. Anything that is growing rapidly bears attention.
  24. Involve outsiders. It can be hard to identify your own problems.
  25. Most companies do a fairly good job of monitoring their direct competitors, but they underinvest in monitoring and interpreting telltale signs of future threats from substitutes and existing or yet-to-be-born disruptors.
  26. You are under no legal requirement to hold to your initial goals and boundaries. As the world changes and you see what works and what doesn't work, you can and should go back and revise the rules of the game.
  27. Adopt a “future-back” mindset. Companies tend to follow “present-forward” approaches to strategy. They start by detailing today's business, then project what next year will look like, then look at the year after that, and so on.
  28. Be willing to wave goodbye to the past.
  29. Your strategy isn't what you say you do; it is what you actually do.
  30. “What is possible?” can't be answered purely by gathering data and building intricate spreadsheets. Instead, it requires intuition and judgment.
  31. If you demand that every idea succeed, you will be consigned to work on incremental improvements within the confines of your current business.
  32. Exposing half-baked ideas early generates useful, usable feedback. It also has positive spillover effects as people in other corners of the organization can take fragments of an idea in new directions.
  33. Whenever you innovate, two good things can happen. Of course, you can create value. But you also can learn something that opens future avenues to create value.
  34. “A desk is a dangerous place from which to view the world.” – John le Carre
  35. The great sucking sounds of yesterday can subtly but importantly pull an organization back to what it was trying to get away from.
  36. Failing to build systems around the new organization creates dependency on a small number of individuals, which doesn't scale and creates conditions for failure.
  37. Defining and reinforcing a shared sense of mission become central functions for senior leaders driving a dual transformation.
  38. Transforming a company is indeed a journey, one that is both unpredictable and perpetual.
  39. Leaders who catch the disruptive changes early and respond appropriately will have the ability to thrive in the years to come. Those who don't, well, Darwin has a way of taking care of them.

 

If you’d like to talk more about Dual Transformation and how to improve your ISV business, please reach out to me. My job as a Reseller & ISV Business Advisor for Vantiv’s PaymentsEdge Advisory Services is to work with Vantiv partners to help them with hiring right, developing staff professional development programs, improving customer service, and more.

 

 

For more On the Edge content, please visit the Vantiv Partner Advantage website.

 

Jim Roddy is a Reseller & ISV Business Advisor for Vantiv’s PaymentsEdge Advisory Services. He has been active in the POS channel since 1998, including 11 years as the President of Business Solutions Magazine, six years as a Retail Solutions Providers Association (RSPA) board member, and one term as RSPA Chairman of the Board. Jim is regularly requested to speak at industry conferences and he is author of the book Hire Like You Just Beat Cancer.

 

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