Rule 1 in Digital is “Get Fast”

I have a weakness for strategy. For business models and structures that create advantages for certain companies. I like to look at businesses pretty much like engineering problems. A plane is faster than a car. As a result, I underestimate the operations part. That certain businesses are just better at operating performance than others. They have better management. They are more innovative. It’s harder to put numbers on these things so I tend to gravitate to the structural aspects. Basically, I’m much more of a Buffett fan than an Elon fan. But we’re finishing up a short book about what really matters in digital, including operating performance. And we’ve boiled it down to five rules. And #1 is about operating performance. It’s about the absolute need to be fast as a digital business.

Rule 1: The Need for Speed

Get greasy, fast speed into your decision-making.
Every year, you must be bigger, faster, and more data driven. Achieving digital speed is a process.

In the movie Rocky 2, slow, plodding Rocky Balboa is preparing to fight his rematch with Apollo Creed, a far more skilled and technical fighter. And in a pretty great scene, trainer Mickey Goldmill tells Rocky how he can beat Apollo. He is going to change fighting styles from southpaw to traditional stance. But first, he has to get faster – saying:

“First you gotta get speed. Demon speed.”

“Speed’s what we need. We need greasy, fast speed.”

And then we get a cool montage with Rocky training for speed. He chases chickens around the yard. And runs along the train tracks. And he eventually runs up the steps of the Philadelphia Museum of Art, where there is now a Rocky statue (which is a weird thing for a city to put up).

Photo by Luisa Frassier on Unsplash

But it’s a good analogy for Rule #1 for winning as a digital business. Yes, you are going to have to evolve your strategy. Yes, you are going to have to build entirely new digital capabilities. But before you can do any of that you gotta get speed. Being really fast is an absolute requirement for digital business. You hear digital people talking about this all the time. And they use lots of different language. You need agility. You need adaptability. It’s about your rate of innovation. Such as:

“What matters is the pace of innovation — that is the fundamental determinant of competitiveness.” – Elon Musk

And…

“Speed is the new scale.” – McKinsey & Co.

Personally, we find the movie references much easier to remember.

“I feel the need…the need for speed.” – Top Gun

And that is Rule 1: You need greasy, fast speed in your decision-making. In practice, that means that every year, you must become bigger, faster, and more data driven. Achieving digital speed is a process over time. An unrelated side note. Apparently at the real Top Gun fighter school (i.e., the United States Navy Fighter Weapons School at Naval Air Station Miramar), pilots have to pay a fine if they say, “I feel the need…the need for speed”. Or use any of the other Top gun quotes.

Example: WhatsApp Was a Really Fast Early Mover

In 2009, Brian Acton and Jan Koum founded WhatsApp to ride the wave of new mobile apps that followed the launch of the iPhone. The original purpose of WhatsApp was to put a status notification next to your name, to let people know “what’s up.” It got some adoption but was mostly an obscure mobile app searching for product market fit. But the small WhatsApp team noticed three important things that would soon launch their fledgling mobile app into the stratosphere.

First, they noticed that people were using the mobile app to communicate with each other, not just to post their status.
Second, the app could automatically access users’ contact lists on their smartphones. This would later require more explicit user permission, but in the early days a mobile app could pull the contacts much more easily.
Third, in June 2009, Apple launched notifications that let messages be pushed to users’ home screens, instead of requiring them to open the app to read them.

WhatsApp moved fast. They pivoted their product to the messenger we know today. And it took off. By 2014, WhatsApp had soared to over 400M users and was acquired by Facebook for $19B. The small WhatsApp team was just very fast. Tactically. Operationally. Strategically. They pivoted their product from status notifications to smartphone messaging. They took advantage of the contact lists on smartphones to build a network effect. And they used notifications to increase usage by their users. Speed is usually the biggest advantage start-ups have versus incumbents. But, mostly importantly, WhatsApp was also data-driven. This is one of the big benefits of digital natives. They are data-rich from the beginning. They don’t have to digitize their operations and move from traditional management to more data-driven decisions. You are looking at lots of data from day one. WhatsApp only saw the opportunity to pivot their product because they were looking hard at the numbers for what was working. Finally, WhatsApp was an early mover in the space. Being first or early in a business helps. Which is, by definition, being faster.

Ok, We Need to Be Fast. But Fast at What Exactly?

Bain & Company conducts an annual Digital Insights Survey where they ask +1,200 business leaders to prioritize what it takes to establish digital leadership. The top-cited driver for digital leadership every year is “fast decisions.” Also high on the list are “IT operates at speed” and “execute plans with speed.” So again, be fast. Which makes sense because things just happen faster in a digitized world.

Customers, markets, and competitors change faster.
Operating activities like developing new products and services happen in weeks, not months.
Activities like fixing customer experience issues need to happen in days.
And in some activities, like marketing, pricing, and promotions, you increasingly need to respond in real time. Like within seconds, which requires data and software.

All of this is true. But it’s pretty unhelpful. “Be fast” isn’t really great advice.

Do new versions of our products have to be released every month now? Every week?
Do we need to respond to customer inquiries in an hour?
Do we need to adjust our pricing every day? Every ten minutes?
Do we need to launch new growth initiatives every month? Do we need to jump into lots of business adjacencies now?
Should we mandate shorter meetings? Should we all walk faster in the office?

“Be faster” doesn’t give you much of an operational plan. If anything, “be faster” just makes everyone feel kind of anxious. It’s about becoming data driven – and then getting faster in two areas:

Digital Operating Basics
Tactics

And you’ve probably seen my checklists for this many times.

The First Step Is Faster (and Smarter) Decision-Making

We’ve broken “the need for speed” down into Tactics and the Digital Operating Basics. And those are the big components of operating performance. But that is also two pretty long checklists. It does take time to get faster at the activities that matter. It’s a process. You need to make incremental improvements year after year. Fortunately, the first step is pretty straight-forward. You need to become faster at decision-making. And that means becoming data-driven across the organization. Most traditional companies operate like this:

Information is scattered across the enterprise. Memos. Emails. Excel spreadsheets. Some databases. Usually siloed.
There is some tracking, centralization, and issuance of reports. Databases are incomplete or narrow. Reports are periodic.
And there is little to no real-time data reporting or analysis. There is little real-time experimentation.

Traditional business operations have always relied heavily on the judgment of experienced management, using mostly fragmented information and limited analysis. It’s just the way business has always been done. But if you can standardize and consolidate a company’s data in on place, visibility, data reporting and analysis can become all comprehensive and real-time. All the reports, purchase orders, excel spreadsheets, emails, and other bits of information go from being scattered across the organization to one central location. That immediately gives far greater visibility into the enterprise while creating a “single version of the truth” that everyone in the organization can rely upon. And the immediate payoff is management immediately becomes both smarter and faster at making decisions. Once information is consolidated, they can:

Run continuous real-time analysis. That makes decision-making much faster, and more data driven.
Do experiments at scale. They can make decisions in the morning (changing the prices of some prices in some stores) and see the results in the afternoon. They can run thousands of experiments per year.
Deploy more and more advanced analytics and tools over time. Analytics go from basic to complicated. They go from backward looking analytics to forward prediction.

As decision-making becomes much more data driven, it becomes faster. And usually, smarter. That’s usually the best first step for getting speed. And the Silicon Valley company Snowflake has emerged as a really cool service for consolidating, storing, and analyzing company data.

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So that’s rule #1. You need speed. It’s about becoming data driven – and then getting faster in 3 areas:

Digital Operating Basics
Tactics
Decision-making

Cheers, Jeff

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