One of the biggest challenges any senior leader faces is to nurture transformation to a successful conclusion. In general, transformations hit moments of chaos or complexity that people are happy to get through, but that can mean leaving behind lessons that are invaluable to corporate innovation capability. We developed the lighthouse project concept to help counter this tendency to lose valuable learnings.

Fostering a Learning Culture

The scope for learning in transformation

In a 2020 study of transformations in large organisations we estimated that most firms are transforming some part of their business every three years and in addition that these transitions overlap such that three or more transformations are under way at any one time.

Of course, the bad news is that many transformations fail to meet their sponsor’s expectations. They tend to be organised in large projects and they tend to be planned using traditional planning techniques. In our work on transformation sprints we have proposed a variety of techniques to turn the large project with high failure risk into smaller initiatives that can grow over time.

Our goal with these techniques is, in effect, to help firms reach a new operating model in such a way that they learn about the needs as they go rather than predefining everything at the outset. We hypothesize that failures often stem from trying to see too far into the future. On a complex journey, a good learning organisation will want to learn what are the most appropriate next steps at each stage, rather than guess well ahead of the game. So here we set out a way to become more of a learning organisation, how to save transformations from failure, by using lighthouse projects. The key is to act incrementally, with lots of opportunities for learning.

The nature and role of a lighthouse

The job of a lighthouse is to show the way. They become most valuable during difficult circumstances. And in fact humanity has been using them for thousands of years. In modern business, there are times when management needs to see a way forward but more so, executives need to learn what is the best way forward.

All too often that idea of moving forward is delegated to consulting firms who are likely to provide an answer similar to the answers they give to other clients. A lighthouse project is an opportunity to do some self-discovery.

The lighthouse project is distinct from all the project types we are accustomed to discussing in business. It is not an MVP or minimal viable product. The purpose of an MVP is to design a product to a stage where potential customers can express a view about it and then to iterate forward.

It is not a prototype. In fact, a prototype is not substantially different from an MVP. Arguably they are the same.

But nor is it a pilot either. A pilot is a project design that aims to prove that a product or service works in situ, i.e. that it works in its context. That is to say, it takes us beyond a prototype and proves the concept in practice. It is like a proof of concept but one step beyond that.

The Lighthouse Project is designed to do four things:

1. It is designed to have a structural impact
2. It is designed to do that through new ways to work
3. The design delivers value quickly and often
4. And the experience is a learning environment for management and teams.

So think what that means. To be structurally significant it is going to move your transformation forward in some way. By promoting new ways to work, you get a petri dish for observing how agile and post-agile techniques work. If it delivers value quickly, you are sponsoring a low risk activity. And all that adds up to a strong learning environment.

An example of the lighthouse as a learning mechanism

Cloud is a major part of any company's digital transformation. However, for the most part decisions around Cloud usage tend to be very conservative. It is not uncommon to replicate the applications and work processes that already exist, in a Cloud environment. It means you make a transition of sorts, but it is so hedged that the transformation is not going to work that well, It is too safety first.

Suppose you turn this round with a lighthouse project? And for the sake of a thought experiment, do this with data. Run a lighthouse project to trial your data-in-the-cloud capability. What you are looking for is a structural impact from the project (it has to show how valuable cloud can be), new ways to work (stand up an autonomous team), deliver value early (insist it delivers value within a month) and it has to be a learning mechanism (insist on weekly show and tell sessions to show progress and remove blockers).

In many instances data teams are typically under-equipped. This is not universally true of course. But as data becomes more important, so too does the level of equipment they need. Commissioning new servers at any kind of scale, however, requires a written justification, senior-level approval and then a four month procurement process.

In this lighthouse project, the Director puts a team of eight people into a room and cuts them off from the normal push and tug of corporate life. He tells them they have an opportunity to prove the worth of data science but they have to do it quickly. And all that they need, in terms of personnel, is in the room. Data scientists, developers, and a manager/coach.

The data team is accustomed to its data runs taking about 24 hours. That process goes: hypothesise, model, iterate from intuition, run the data.

24 hours later the results give some clues as to the model’s suitability and robustness but inevitably it leads to another round of hypothesising etc.

Now, in the Cloud, no new servers need commissioning. They are suddenly able to switch on new computer power at four minutes notice. Instead of sequential data runs, they can run different data models in parallel, four at a time instead of one after another. Within six weeks they have earned their company an additional £30 million because of the level of customer insight and the ability to inform developers how to tweak user interfaces to gain more traction

Conclusion

What we have just described is not a pilot, nor an MVP, nor a proof of concept. We have taken a group of people and given them a new work environment, one free of procurement constraints and one where they can experiment with their work methods. What we have asked them to do is to use the new infrastructure and quickly come up with ways that it can demonstrate additional value.

That is the nature of a lighthouse project. To help it to success, it does not take a consulting team. Nor does it take a huge budget. But it puts an important part of transformation, Cloud usage, onto a new track with better ways to work, more value, earlier, and additional profits.

Looked at as a whole, it is small scale. And just eight people. Looked at over a longer period those eight people can now train more people in how to think in a more value-centred way, and how to work in a holistic team. It can scale out but it is scaling at low risk. It is also teaching everybody what types of new initiatives make up the target operating model.

In other words it can have the same impact as a large transformation project over the same period of time without the risk of big project failure. Over and above all that, experiments like this provide a learning mechanism for managers, who can now observe what works and what else is needed for success.