Why Lighthouse Projects, Not PowerPoints, Will Unlock Your Transformation Value

It used to take a Fortune 500 company around 20 years to reach a $1 billion valuation. Today’s startups are getting there much faster: Google did it in eight years, and the likes of Uber, Snapchat and Xiaomi in four years or less, partly through successfully harnessing digital technology.

Digital transformation means different things to different people but it is one of the most significant business trends today. Technology is transforming entire industries across the globe at an unprecedented pace. Long standing business models are being upended and established incumbents are challenged to keep up with innovative,, agile players who embrace technology and are not afraid to fail fast and often. Above all, changing customer behaviours and expectations are a major change catalyst, forcing companies to rethink existing models and become true digital enterprises.

But a truly digital enterprise stands for more than just deploying new technologies for the sake of it. A genuine competitive advantage can only be gained through a company’s culture, strategy and way of operating. It’s about striving to continuously enable new and leaner operating models underpinned by agile business processes, connected platforms, analytics and collaboration capabilities that enhance productivity. It’s about relentlessly seeking, identifying and developing new digital business models and, above all, ensuring that customers and employees are at the center of whatever a company does.

Many companies are working on developing long-term digital strategies. These may involve traditional five-year strategic planning horizons, multiple committees, numerous PowerPoint slides and a seemingly infinite process mired by skeptics, inertia and bureaucracy.

In today’s disruptive and uncertain market environment, this classic planning approach is destined to disappoint. Instead, companies should move to an experimentation-oriented focus that uses real-time data to give instant feedback about the effectiveness of their strategic initiatives. With the pace of change being so high, extrapolating from past data to guide future actions is unlikely to be successful. A culture of constant, iterative experimentation is more effective.

One of the most common reasons for transformations’ failures is the lack of planning for and creating short-term wins that lead to embedding changes in the corporate culture.

Cultivating a sense of urgency and fostering a “let’s just do it” mindset are key to success - companies simply can’t afford to spend months at a time debating and crafting a single long-term strategy which may well be inappropriate or out of date by the time it’s drafted.

To stay ahead, you need to constantly start new strategic initiatives that align with the high level digital vision. You must simultaneously build, test and exploit many transient competitive advantages. It’s all about shifting the way you are operating to experiment, iterate and learn, adopt metrics that support entrepreneurial growth, build strong relationships and networks and get systematic about encouraging and executing early-stage innovation.

We believe that executing digital transformation through the ‘lighthouse’ projects approach enables short-term wins that can accelerate innovation, deliver proven, scalable solutions and impact cultural change in the long term.

What Is a Lighthouse Project?

Lighthouse projects simply focus on implementation, fast delivery and creating a positive culture for digital transformation. A lighthouse project is a short-term, well defined, measurable project that serves as a model — or a “lighthouse” — for other similar projects within the broader digital transformation initiative.

A lighthouse project could be a legacy monolithic app that you adapt to run using microservices and next-generation deployment infrastructure like containers. Or, it could be a high-availability, scale-out storage system that you set up in the cloud to replace the bulky, unreliable, on-premises storage array that you currently depend on.

Why a Lighthouse Project Matters: Show, Don’t Tell

A lighthouse project is the key to digital transformation because it shows everyone in your organisation what they can achieve by migrating to next-generation technologies. That’s much more effective than simply telling your colleagues what you would like to see happen, and crossing your fingers that they figure out how to act effectively on your wishes.

Of course, lighthouse projects require planning, clear defined goals, realistic metrics, forming the right team responsible for implementation and ensuring the team spends the right amount of time on planning and execution.

One of the advantages of the lighthouse approach is that only one team within your organisation needs to spend time planning and implementing your model of digital transformation. That’s better than attempting to involve the entire organisation in a vaguely defined project of company-wide digital transformation.

Lessons from Fred Brooks

After all, as the influential computer scientist and theorist Fred Brooks famously pointed out way back in the 1970s, adding more staff members to an IT project does not lead to a faster or better outcome. It just wastes resources on diminishing returns. This mantra came to be known as Brooks’ Law.

Brooks’ Law was formulated a long time ago, but Brooks’ wisdom holds true today. Throwing more human resources at digital transformation just adds complexity and confusion, making the transformation harder and more costly to achieve. Your digital transformation can be implemented much more effectively when a small, lean team shows the way by building a lighthouse project, which can then serve as an inspiration and a blueprint for the rest of your organisation to follow when transforming other assets.

Planning a Successful Lighthouse Project

So, how can you get started with a lighthouse project that will jumpstart your digital transformation? A successful lighthouse project should do the following:

• Demonstrate both next-generation technologies and next-generation modes of thinking. The example from above of a monolithic app that is redesigned to run as microservices, and deployed via containers is a good example of this. It puts on display an innovative technology (containers) as well as an innovative design and deployment principle (microservices).
• Implemented within a reasonable period of time. You don’t want to wait years for your lighthouse project to be complete. Choose a project that can be implemented within a reasonable period of time—a year or two at most. Of course, you should be careful to balance time-to-completion with sophistication; don’t make the project too simple in order to make it faster to complete.
• Offer takeaways that everyone can understand. A lighthouse project need not directly benefit everyone in your organisation. But its value should be something that everyone in the organisation can appreciate and understand. It should have obvious takeaways, such as “we have reduced the hardware purchasing budget by 70 percent” or “we have managed to increase our app uptime from 95 percent to 99.9 percent.”

Have clear metrics. You’ll notice that the takeaways mentioned above involve hard numbers. Collecting quantifiable data about your lighthouse project is important in order to make the demonstration of value as clear-cut as possible.

The nice thing about lighthouse projects is their infinite flexibility and adaptability to your organisation’s goals and vision - they can take whatever form is necessary and appropriate for your purpose. There’s no rigid framework - as long as you adhere to the general principles outlined above, you’ll build a project that can light the way (excuse the pun) for your entire organisation as it achieves digital transformation, and (hopefully) avoids wasting endless hours on meetings or PowerPoint slides to get you there.

[White Paper] Fast & Furious: How to Unlock Digital Transformation Value Through Lighthouse Projects​

Through working with enterprises across multiple industries in over 50+ engagements, we have developed a unique approach to delivering high impact lighthouse projects that act as a beacon for future capabilities and enable successful transformations at scale.

We've summarized our collective experience and latest thinking and how this benefits large enterprises in our white paper: Fast & Furious.