A Recipe for Digital Transformation

19 years before COVID, the 9/11 attacks gave me a sneak peek at how quickly we can change if the right three ingredients are in place.

Before we get to today's main topic, some miscellaneous things worth knowing/thinking/smiling about…

• Memorial Day is tomorrow. This isn't just a time for department store sales. Memorial Day is the sister holiday to Veteran's Day. The latter celebrates the soldiers who made it back; the former remembers the fallen. To all the Gold Star Families out there: we see you.

• AI Update: Proving my point from a few issues ago about how Generative AI exploits human laziness, a NY lawyer got in trouble for letting ChatGPT write his brief using precedents that the program "hallucinated" (which is code for made up). H/T Alex Millkey for the NYT article.

• I couldn't be more excited about Season 2 of Star Trek: Strange New Worlds and particularly the planned Star Trek: Lower Decks crossover. Hollywood Reporter has a trailer and analysis.

• This Google Lens ad showing shoppable outfits worn by WNBA players is one future of advertising and also one future of search.

• The penultimate episode of Ted Lasso showcases the haunting song "Fought & Lost" by Sam Ryder featuring Queen's Brian May. La Profesora cannily observed that Ryder sounds a lot like Freddie Mercury. It's easy to hear if you compare the Ryder song to Queen's "Who Wants to Live Forever."

• My neighbor revealed that he was of my vintage doing yard work yesterday because the songs blaring from his outdoor speaker were all songs from our high school days: "Jessie's Girl," "Take Me Home Tonight," "I Want You to Want Me." This made me think we need some new Spotify playlists (perhaps we can lean on the good folks at Despair.com who make hilarious demotivational posters) like "Peaked in High School," "Passed Over for Promotion," and (La Profesora's contribution and my favorite) "Music from Back When I Still Loved You" (I fell apart laughing).

• Micro-Rant: Why is it that the people who are too cheap to pay $30 to check a bag get first crack at the overhead bins? Shouldn't the customers who pay get to put their smaller bags up first and enjoy legroom?

• Please follow me on Post and LinkedIn for between-issue insights and updates.

On to our top story...

A Recipe for Digital Transformation

"Turn on the television." 6:00am. Urgency in my brother-in-law's voice cut through the grogginess as I held the bedside phone to my ear and clutched for my glasses. Our six-month-old daughter had slept poorly, and so had we. I was in no mood for jokes.

"What the hell?" I croaked.

"The World Trade Center has been attacked," he said. "It's all over the news. Turn on the television."

Baby in our laps, jaws hanging in shock, we watched CNN. From 3,000 miles away in Encino, we saw the Twin Towers collapse after hijacked jets hit them, people falling to their deaths.

September 11, 2001. I was the digital editor at EarthLink, the Internet Service Provider. This was back when broadband wasn't even a dream for most Americans, the dial-up days; the Blackberry email-only device had taken the business world by storm; the iPod was a month away; smartphones were years in the future.

Within an hour came word from the EarthLink C-Suite: the Federal government had called. They did not know who had attacked us. On top of the Towers, the Pentagon had been hit. Another hijacked flight had crashed in Pennsylvania.

All communications companies were possible terrorist targets, including EarthLink.

"Don't come to the office. Work from home. Stay on your email. We'll let you know when we know anything."

It was my first digital transformation and still the scariest.

My wife and I shared a home office next to the kitchen. Over the following days, life was a series of jump cuts from harrowing images on television, to caring for our infant daughter, to an endless stream of text—email after email, instant messages piling up, sharing drafts of web pages and email communications by attachments and online.

This was 19 years before the COVID Complete Context Collapse when the pandemic sent us all inside. During COVID, the walls of our homes also contained our jobs, our schools, our gyms, our theaters, our cafes, our places of worship, our hospitals (if we were lucky), the place where we received endless deliveries, and our jails.

On 9/11 and in the days thereafter, I had a sneak peek at how quickly we could change everything about how we worked.

Now, looking back after COVID, I see a recipe for digital transformation that has three ingredients:

• An external event or inflection point

• Institutional pain

• Tools lying around.

Let's take them in order.

An external event or inflection point

Crises like the 9/11 attacks and the pandemic are obvious, but other inflection points might be a new boss, a new competitor, an economic downturn, an acquisition, or a re-org.

Organizations are too busy with today's known problems to change in anticipation of tomorrow's mysteries, so it takes a meteor strike or the like to make people willing to try something new.

Institutional pain

It doesn't have to be arm-ripped-off pain, just enough awkwardness and inefficiency that when an external event happens there's enough awareness of institutional pain that people working inside the organization will flex.

Standards relax when the order from on high is "just get it done."

Tools lying around

I'm adapting this from "Ideas Lying Around," in Chapter 12 of Rebecca Giblin and Cory Doctorow's wonderful book Chokepoint Capitalism, which I wrote about in April.

Giblin and Doctorow's surprising source for this is Milton Friedman, the arch free market economist, who reminded his acolytes that "their mission was to create 'ideas lying around' that could be picked up and pressed into service when a crisis arose" (page 152).

At EarthLink after 9/11, we had all the tools we needed lying around. In real time, we cobbled together a functional, geographically distributed platform on which to run the company: computers, internet connections, email, instant messenger, landlines, and phones.

Was this rickety platform as good as the fully embodied office 30 miles away in Pasadena? Of course not, but if terrorists crashed another jet into that office neither the company nor the employees would die.

Disruptive innovation can be self-disruption.

In his classic book The Innovator's Dilemma, Clayton Christensen argued that incumbent companies fail when they super serve their most profitable clients with premium features but ignore their less profitable clients. The latter clients then move to an inferior but cheaper product from a competitor. That cheaper competitive product later lures in the more profitable clients who, it turns out, don't really care about the bells and whistles.

For Christensen, disruptive innovation was always exogenous—a new competitor wipes out the incumbent.

The recipe for digital transformation is different: it allows for self-disruption if the organization takes advantage of the combination of an inflection point, institutional pain, and exploits the tools it already has lying around.

As many have quipped, you never want to waste a perfectly good crisis.

Thanks for reading. See you next Sunday.