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Digital business designers

Why current-state analysis matters in a futurestate design programme

So far in the Futurestate Design series we’ve been pretty focused on the future, as you might expect. By now, we hope, we’ve established that current-state analysis can’t tell you anything very useful about your business of tomorrow. It tells you where you are now, and where you have been, but not where you can go.

Mark Wilson

Managing Partner & CEO

Where it does help is in identifying how great the gap is between the business of today and the vision for the future. In this article, we’re going to unpick this complex subject a little to give you some guidance on when and how to use current-state analysis.

In our 7 futurestate design rules, rule number one was ‘Don’t look at what you do now. Not even for a moment.’ In many ways the golden rule of futurestate design is to always start in the future if you want to arrive at a compelling futurestate vision for your business. It’s not that current-state analysis is irrelevant, it’s that — even when used with good intentions — it will inhibit your ability to leave today behind if you load your brain with it first.

It’s safe to look back when you know what you’re looking for.

Current-state analysis is de rigueur in traditional management consulting circles. It’s frequently their starting point and it’s just as frequently a very costly exercise. With a little thought, however, that money can be put to better use.

Typically, businesses undertake current-state analysis across the whole organisation, but a large amount of that work will inevitably prove to be wasted effort — because you’re not going to carry everything with you into the future. When you have your futurestate vision in hand, current-state analysis becomes a more focused (read cheaper, faster) exercise.

For example, we’ve seen extensive current-state analysis projects conducted on one company’s manufacturing capabilities, and on another’s B2C operations, when after even an initial futurestate design exercise it was clear that the businesses concerned should be focusing on distribution and B2B services, respectively. Almost instantly, the budget spent on analysis and recommendations on how to improve them was written off. Had they invested in their futurestate vision first, the analysis they needed to conduct would have been much more focused and the budget saved made available for progressive, future-focused work.

Look back when you know where you want to end up, and apply the lens of ‘what do we need to understand to help us achieve our goal?’ to keep you on track.

What do we look for when we look back?

While what should be examined varies by company, here are our top three things to look out for when examining your current state. Each will identify key barriers or legacy constraints that will need to be overcome or left behind.

Look for assets and irrelevancies.

Let’s start with the basics: dividing the current organisation into two broad buckets.

With a futurestate vision in hand, look at what assets you have in today’s business that might contribute to that future. Is there technology that can be re-purposed or built upon? Are there skills and experiences that are under-exploited? Are there customer groups that you have a foothold in that could become the customers of the ‘new’ business?

Equally, identify what is not part of that vision and put in in a different bucket: some of it may yet be useful, but it’s certainly not where you should be focusing your efforts. And you certainly don’t need to invest any more time in it than you have to.

By dividing the current organisation into these two basic buckets, you can rapidly determine what building blocks you have, what might weigh you down or suck resources, and what areas will need to be addressed before you can move forward.

Look for vested interests.

The root causes of what’s holding you back already are often, we find, bound up in protected interests where people are deeply invested, but not in a good way. Teams and products are long-established danger areas, but technologies and platforms can be equally treacherous these days.

When examining your current state business, expose any form of protectionism for what it is: a foot (or two) in the past. Anything that appears to be — or is described as — a person or a team’s ‘domain’ should ring alarm bells.

The obvious implication here is that you’re looking at people and their behaviour: those who exhibit stubbornness, intransigence or defensiveness might be masking a multitude of deeper issues — and may not be the right people to lead a charge into an inherently less predictable future.

At the systems / product / platforms end, ‘we’ve spent all this money, we must make it work’ is as dangerous a behaviour in the modern world as putting on a blindfold while driving.

Would you be creating or doing this now if you were starting from scratch? If the answer is no, consider substantial change, full retirement or a tactical role to maintain the current business while the new one is shaped.

Look for bespoke things that don’t need to be.

‘That’s the way we do it’ should always sound an alarm, too. An unimaginable amount of money is still wasted on doing things differently when they don’t need to be done so. Look for any custom process, procedure or system that does not make you special — it just makes you functional.

We have a ‘rail tracks’ philosophy for digital businesses: if you can use off-the-shelf tools, use them. If you can adopt an industry-standard process, adopt it. Then, invest what you didn’t spend customising basic functional things in those areas that enable you to really differentiate from your competitors. Differentiate with the train, not the rails.

So when examining your current state, look for spend, effort, issues or anything else that shows where something bespoke has been created, then dig deeply into why it is that way, starting with the question ‘who else does the same thing?’ The minute you hear, ‘lots of people, just not in the way we do it’… put a big red flag next to it.

Often this can highlight areas that you’ll need to adapt before you can move forward. Sometimes it will liberate you from a legacy platform, or will highlight a cultural behaviour that needs to be reset as you move forward.

How can you conduct really high-value current-state analysis?

Again, the type of analysis that might need to be carried out varies widely by the type of organisation concerned. However, here are a few of our guiding principles that we believe can be applied in almost every situation.

Don’t dig too deep too soon.

Map widely and rapidly so you can identify what to focus on — and what to set aside. Get a version done quickly so that you can get hold of the challenge more effectively, then progressively dig deeper into those areas that you need to. If you’re not disciplined enough, you’ll go down endless rabbit holes and will miss the bigger, broader and more important issues.

Talk to the people who use systems, not the people who own them.

Always get to the coal face as early as possible. Speak to people in the organisation who are at the hard end, not those who have the most ‘corporate’ responsibility. You want real-world insights as soon as possible, and you need to establish a culture of honesty: make sure people know they can tell you what they really think. There’s far less vested interest in users than in business owners: no-one wants to criticise the thing they created the business plan for.

Pay careful attention to measures and metrics.

Metrics can be enormously deceptive. A team that is hitting its targets could be depressing the performance of several more. Scrutinise how current KPIs might stack up against future objectives. For example, if you’re currently trying to keep people on the phone and your future demands a self-service experience, hitting today’s performance targets could be getting in the way of achieving your futurestate with every day that passes by training customers to be dependent on something you need to eradicate.

Ask ‘why?’ until you get a real answer.

Identifying pockets of activity that aren’t necessary is critical and you can only do that with liberal application of the word ‘why?’. Why does this thing exist — what is its purpose? Why do we do it that way, when no-one else does? Any answer that even vaguely sounds like ‘because we always have’ or ‘that’s just how we do it’ should cause alarm. More often than not, you’ll get a good number of ‘I don’t really know’ when you keep asking.

Get multiple perspectives.

Don’t believe what you’re told: gather inputs on anything important from multiple sources to ensure you have a balanced view of what’s going on. Don’t be afraid to bring in external expertise either, as a fresh pair of eyes can identify something that no-one else even knew to look for. Expect to have to dig deepest into those areas with the most diverse views.

Sniff out risk-aversion.

Are you only where you are today because a risk-averse culture has prevented better decisions being made? If reasons not to do things seem to be more common than reasons to try things, you have a key cultural attribute to change before you have any hope of achieving your futurestate potential. Identify risk in wired-in processes, spot the people who are most likely to inhibit progress because they’re afraid of it, and put a big tick against those people who think risk lies in not doing new things.

Be focused and be brave.

It should be clear by now that current-state analysis is not for the faint-hearted. You have to be brutally honest about where strengths and weaknesses lie, and you have to be prepared to uncover things you don’t want to see, and it can take a lot of effort to get to the facts.

This is why it’s so important to focus your efforts on scrutinising the right things, because you can burn a tonne of time and money evaluating a business that you’re going to radically change. If you have something clear and compelling to aim for, you’ll be much more likely to scrutinise your current state honestly — and be brave enough to leave the right things behind.

How to design for the customers of tomorrow

When envisioning the futurestate of a company or a service, we’re usually faced with the challenge of designing for a customer that doesn’t exist yet. What do we mean by this? Well, they exist in the obvious sense, they’re just not ‘there’ yet.

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Customer-led design is an accepted norm these days; a go-to approach for innovation teams. But there’s a fundamental flaw in customer-led design when you’re trying to take a real leap forward: customers can’t lead you there.

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