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What business transformation can learn from the superjumbo’s demise

(Image credit: Image Credit: Step5)

In February this year (2019), Airbus announced it would be ending production of the A380 superjumbo in 2021. Having estimated that sales of the plane would reach 1,500, only a meagre 250 were manufactured over its lifespan, signifying an unquestionable failure. In contrast, Airbus’ A320 has been in high demand from airlines attracted by the lower running costs that the smaller aircraft offers, with it selling closer to 10,000 planes. Airbus is not alone, either. Projects such as HS2 and Crossrail are further examples of the struggle with scale. These are modern epics which risk falling into the realm of project myths.

Big business and government alike have fallen in love with the idea of grand projects, ambitious and designed to be future-proof.   From bold infrastructure schemes to major plans to transform services and entire organisations through technology, it’s a similar story.  In reality, these flashy, large-scale projects are costly and cumbersome, meaning that, if they ever reach the light of day, they are often over-budget and out of date. Their size means they lack the flexibility to adapt, ultimately failing to achieve the desired outcome, unable to keep up with the fast-paced development of technology or changes in priority.

Key learnings

So, if the A380 is your large, costly and slow project, while your A320 is your flexible, more cost efficient alternative, what are the lessons to be learnt?  The simple truth is that everyone aspires to the A380 when really what they need is the A320. It is a firm example of how the modern world works and how we can learn from the old to benefit the new — think NASA versus SpaceX. Technological innovation, digitisation and big data are combining to create an increasingly fast moving and dynamic world. However, while the world and its demands are changing at pace, the current approach to scoping projects is standing still. This, along with dated business structures and inappropriate methodologies, is hindering businesses’ ability to anticipate and react to external change. 

Doomed from the start

The failures of Airbus are no different from what we see with many digital transformation projects; the processes are the same, and subsequently, so are the mistakes. Often the problem lies earlier than you might expect as transformation projects are routinely flawed from conception and destined for failure. As Matthew Vickerstaff, interim Chief Executive of the Infrastructure and Projects Authority, says, “Project prioritisation, initiation, performance and capability are the basics that we have to get right.” This is why Britain’s boardrooms must ask themselves this: Do we have clarity of purpose and is it linked to definitive deliverables and dates? Sadly, trends suggest this question is, at best, overlooked, and we are not learning from the mistakes of the past. Institute for Government (IfG) analysis shows an alarming trend of spiralling average whole-life project costs included in the Government Major Portfolio between 2013 and 2017 — costs are increasing year on year, doubling in that timeframe, perpetuating these grand projects which are not fit for purpose.

Agility is the answer

What, then, is the path to success for digital transformation projects? For us the answer is Agile which, as the name suggests, is about delivering results for the business quickly. This requires an iterative approach, achieved by breaking down large projects into smaller, more achievable chunks.  However, ambiguity behind implementation has led to an overuse and abuse of this term in the IT world. We see Agile principles being broken time and again, primarily due to a lack of flexibility or capability in the business to be as Agile as the IT project itself. There is a disconnect between the way businesses function and the projects they wish to deliver. All too often, Agile is being used as a software development mechanism to provide assurance that the project is progressing, and not as a mechanism to deliver business value quickly. Speed is key. Some businesses are claiming eighteen-month long deployment cycles for digital transformation programmes, but C-level executives simply cannot afford to wait this long to add value to the business. Just like Premier League football managers, they need in-year results. 

Achieving true agility

True agility in business transformation rests on getting the basics right.  If they are to optimise speed and efficiency, and avoid the pitfalls of Airbus and other projects like it, businesses need to start by examining the project rationale. Do you have a clear understanding of your business objectives? This is the first and most crucial question to ask.  Too many projects fail because they aren’t sure of, or lose sight of, what they wanted to achieve in the first place.  The key lies in drilling down to specific outcomes, deciding how you are going to measure them, considering the processes you will need to adopt or change to meet them and, of course, the technology required (and available) to support them.

We routinely see businesses fall down by focusing too much on what the organisation does today and failing to develop a true future-looking strategy.  Success lies in articulating what the business is striving to achieve tomorrow and working backwards to develop a roadmap of how to get there, with clear milestones along the way.  What do we need to build, procure, evaluate, host and integrate to make our vision a reality?

Defining priorities is also crucial, to ensure that you are focusing on the right things first.  This starts with analysing the efficiency and effectiveness of the existing processes alongside the outcomes sought by the business.  Your priorities might be driven by cost savings or by a need to improve the customer experience.  Whichever it is, the important thing is to focus on what the business wants and needs the most. 

Smaller is better

As rational and straightforward as it seems, Agile digital transformation still eludes far too many organisations.  They remain locked in big project mentality – plodding on with tunnel vision, not brave enough to take risks, not brave enough to stop when problems arise.  However, there is another way and it starts with going back to what the business wants and needs and delivering it quickly so that any issues can be ironed out quickly, too.  This builds in flexibility to pivot and change, to react to new technologies and changing priorities within the business and the wider marketplace, and to experiment.  When it comes to digital transformation projects, smaller is not only better, it is also the route to bigger success.  

Howard Dickel, CEO, Step5 (opens in new tab)
Image Credit: Step5

Howard Dickel is CEO of Step5, a digital transformation consultancy. Step5 specialises in complex programmes and is often called on to rescue projects that are struggling to meet their objectives.