Transforming traditional blue chips into next generation Digital Product companies

Red Badger's new CEO, David Wynne, reflects on the challenges facing blue chips in a world of Digital Product that is leaving them behind.

Digital Product future

The vast majority of organisations still maintain “traditional” structures, failing to grasp they are already Digital Product companies, just highly inefficient ones. Most are not yet aware it’s a problem. Inevitably some of today's blue chips will falter, failing to observe the shifting tectonic plates beneath them. No one is too big to fail.

For those able to successfully embrace transformation to Digital Product in a way that capitalises on existing market value, the opportunities are huge. This is not a simple path and requires a new generation of leaders willing to brush aside organisational intransigence. Our mission is to help these companies and savvy leaders on their Digital Product Transformation journey.

Today, just over 11 years after I co-founded Red Badger with Stu and Cain, I officially start my new role as CEO. Preparing for this change, I spent time reflecting on what makes Red Badger unique, the challenges we face and the opportunities open to us. While there is a lot to be proud of, I am a fairly restless soul and see much work to do over the next decade - both inside and outside of Red Badger.

As citizens increasingly look towards organisations to provide the answers that successive governments and institutions have failed to address, we have a responsibility that extends far beyond our front door and the monthly paycheque. The lack of diversity in our industry is surely one of the most urgent challenges we face today and our ability to address it will, I believe, correlate heavily with Red Badger’s success.

We have all borne witness to - and played a role in - the digitisation of our lives and the economy. Both of which continue to accelerate at breakneck speed. While Red Badger is imbued with great talent and passion primed to find opportunities within this landscape, our challenge is to not simply ride on the coattails of this revolution, but play a leading role.

Our scale and independence place us in an increasingly rare position - we must strengthen that position if we are to take advantage of it. I believe we have a unique opportunity to build upon the organisation we have today; to be the independent savvy choice in a rapidly consolidating consultancy marketplace, and choose to do things differently, to the mutual benefit of our industry, clients and employees.

As I’ve meditated on these opportunities and challenges, I kept returning to 3 fundamental questions:

  1. What does Red Badger believe that others do not?
  2. What does Red Badger do better than anyone else?
  3. What is Red Badger’s strategic advantage?

These are not easy questions to answer, but their answers reveal a lot about the true nature of an organisation. Here I’ve set out how I believe we should answer them.

What does Red Badger believe that others do not?

Answer: All companies are now digital product companies, whether they realise it yet or not.

Since Red Badger was founded in 2010, it appears to me that we have essentially bridged 3 eras of the digital revolution: I shall call these eras Novel, Advantage and Native. They tell the story of how digital has moved from being something that amused businesses, to business advantage and finally to digital being the business.

Novel Era: Digital is novel to the business

Digital was mostly driven by novelty - typified by one of the first projects we did for BMW; a 3D virtual tour of their museum in Munich, Germany. We took the architect's original plans, rendered lifelike 3D models and pushed HTML5 as far as we could (or should have) to create an experience pre, during and post-visit across web and mobile. As with most of these things, I’m not sure any actual customers wanted it - but what’s an innovation department to do, eh? Gotta be innovating I guess.

Advantage Era: Digital is a business advantage

Digital very much serves the business, solving real world problems that provide a genuine business advantage.

This is where Red Badger has predominantly operated, and still operates today. Whether rebuilding Sky’s online customer services and self-serve diagnostics, Tesco’s International eCommerce platform or HSBC’s current account, loans and mortgages onboarding.

This is the land of the “Project” where success is judged almost entirely on one's ability to deliver the project on time and on budget. Projects are, curiously, rarely judged on the value created or business outcome achieved. Even if everyone set out with the best of intentions to do so - the budget and date reign supreme. As a result, the actual end customer value created by projects is, shall we say, hit or miss.

This disconnect in the value chain is largely borne from the commissioning model inherent in project land. Whoever initially perceived the value or business outcome that might have been enabled by said project, is not actually responsible for delivering the project, but rather commissions someone else to do it, then holds them to account to deliver it on time and on budget. Classically this is “the business” commissioning “technology” to deliver something.

Ergo the people delivering the project are disconnected from the value chain and behave as humans behave when held to account for something - manage to the accountability.

Even when projects do deliver value, which of course some do, the dead hand of the enterprise gradually starts clawing away at the progress as the “traditional” organisation over focuses on false perceptions of risk reduction and stability (read: “standing still, creating greater risk”). The project stagnates, talent leaves, innovation dies, project budgets are whittled away and suddenly you have a timebomb waiting to explode in 5-10 years when yet another project will be funded at great cost, pain and fanfare to yank away at the undergrowth once more. And so the cycle continues.

Native Era: Digital is native to business

The digital strategy does not serve the business, it is the business. These are “next-generation” organisations and this is the land of the “Product” (not “Project”).

The business is conceived as products or services centred around value to the customer and the permanent structures of the business orient around these unbroken value chains. The increasing flow of well-funded start-ups and disruptors prove this model successful, all the while, honing how to test, measure and learn, leading the march of technological advancement with ever-increasing glee.

Companies born natively in this era are proper digital product companies. Take, for example, TransferWise; it didn’t even exist when Red Badger was founded - today it is valued at $5bn and is soon to IPO. Talk to TransferWise and ask who is in charge of risk and you’ll be told “the Risk Product Manager, of course!” The Risk Product Manager, and their team, are an uninterrupted value chain responsible for end-to-end implementation of risk management.

In a traditional company, the risk department (aka “the business”) would be in charge of risk and they would commission the technology department to implement risk controls. Stand back and look at the value chain and you quickly realise the risk department isn’t responsible for the actual technology and the technology department isn’t responsible for the actual risk.

Of the two models described above, which do you think achieves their goals quicker, iterates more frequently, delivers a better customer experience and ultimately delivers more value at less cost? So, which one does a better job of managing risk?

Realising you can’t run your business like a digital product company, but you need to be a digital product company is a penny still dropping all too slowly across hundreds of blue chips around the world. Held back, largely by a belief they are somehow different or unique (they’re not), every day of hesitation reduces their value, their ability to hire and retain the best talent, their ability to provide value to their customers and, ultimately, their ability to survive and thrive over the next decade.

What does Red Badger do better than anyone else?

Answer: We can deliver business change in blue-chip organisations, where others fail (or take twice as long to succeed).

We have always said: “If we do the right thing, the profit will take care of itself”. That focus on the right thing empowers our teams to focus on getting the job done in the best way possible for the client and their customers without fear or favour. It means an open and fair mode of operating and enables us to challenge the status quo from a position not driven by self-interest. This can make us challenging to work with sometimes I am sure, but it cuts through the complexity, drives value and delivers change.

As a software engineer by trade, I understand the creation of Digital Product is not a production line, whereby widgets are churned out. It is not a mechanical system, whose component parts can be swapped or easily replaced. It is a complex creative endeavour that is inherently about people and their interactions with other people as they pursue a shared goal. And so, to be successful, we must create an environment in which human interactions can flourish - and that requires trust.

Badgers are a genuinely passionate, smart and savvy bunch. We are driven to make a positive impact on the world around us, to genuinely help, not simply chase revenue. I believe if we can find the right opportunities for our employees to express their passion by solving the real-world problems that our clients have, value is created for both parties and fair value exchange is achieved. It is my belief this simple, frankly, human attitude is hugely overlooked by a large contingent of people who think they’re “doing business”.

Red Badger teams not only know how to work together, they like working together - on both a professional and human level. The culture that encourages shows up on the job every day and makes us different and energising to work with - clients like working with us too.

Passion, trust, respect and shared goals are words that get thrown around with abandon, but they are central to how Red Badger is run and they are the basis for achieving great results in complex environments.

What is Red Badger’s strategic advantage?

Answer: We are truly independent.

The insatiable market consolidation of the last 11 years only strengthens my resolve that clients need a truly independent alternative driven by what is right for them, their teams and their customers. The number of bright, nimble and passionate companies swept up and placed under the boot of the large consultancies is saddening. They are not a force for good in the world, they stifle creativity, suffocate true innovation and seek to control the market to their own exclusive benefit. We can be the antithesis.

When I co-founded Red Badger, I was driven to create the company I had always wanted to work for. A company that was open, fair and built on trust, a place where you would be surrounded by exceptional people who would push you to better yourself every day and where the organisation did its level best to get out of your way and allow you to focus on value creation, rather than frustrate it.

A few years ago, I summed this up as being focused on Joy, Quality and Growth (in that order). I want people to love their work, be proud of their work and grow as individuals. This, in turn, helps grow Red Badger and ensures our stability. Joy, Quality and Growth should be thought of as a construct, that is to say - all 3 together are what makes Red Badger, Red Badger.  All 3 are required for us to consider ourselves successful and we cannot sacrifice one in the name of pursuing another.

This focus, which creates the culture our clients witness, is largely enabled by our independence. We do not have external shareholders driving us for a quick buck. That doesn’t mean we’re not ambitious, far from it, it means we can take the long view and try things that aren’t always deemed conventional wisdom. We are free to make mistakes (and I do regularly) that don’t result in blame, but rather introspection, knowledge and improvement and growth. Kaizen.

We are intentionally built on a strategy of Decentralised, Informed, Empowered and Accountable teams. We seek to empower those close to the detail to choose how best to solve the problem. We ensure they have the best information available to them to make that decision such that accountability for that decision is fairly bestowed upon them.

These are the fundamental beliefs upon which Red Badger operates and I believe it is how we will continue to grow, remain a destination for passionate tech and product design talent and preserve our employee empowerment ethos as we focus down on our mission to help blue chips transform to become next-generation, Digital Product companies.

Addendum

Some of the above I know to be true. Some of the above I think to be true, but it likely isn’t. Some of the above sets out a desired future state. It is my job as CEO to lead by example as I strive to enable an organisation that seeks to do things differently, make a positive impact on the world around us, and continue to grow and strengthen as a consultancy that can be a genuine alternative to the status quo for both client and employee alike.

Sign up to Badger News