Commerce Innovator’s Dilemma

The other week, I was meeting with a customer that I have known for some time, so there was a feeling of familiarity and trust in the room. They are a large commerce player, processing several $100M per year, after what had been a rocket-ship ride to the top. They have a disruptive omni-channel model and world-class team across business and technology. They have ambitious visions for future growth and are seeing the end of the road for their incumbent architecture. They were starting to consider their next steps. Angst was in the air.

“We have a serious problem with innovator’s dilemma,” one individual offered, and not lightly.

The issue was this: the engine that had gotten them to scale, through years of laborious and intelligent customizations, was now holding them back. And yet, the prospects of disrupting the core engine (and the revenue) was a daunting and risky proposition. They needed to move forward and yet the act of moving forward represented risk to the business they had built.

This is how it’s been in commerce. Twenty years into our journey, we have built businesses of consequence running on engines that we have customized and extended to meet our unique requirements. These engines are reaching the end of life and yet the prospect of change on the core are daunting. What got us here will not take us forward. Yet, what got us here is here and it’s working… today.

Now what?

The root issue behind all of this is an unbalanced risk-reward profile. The risk to change in the commerce architecture at scale is a certain and quantifiable threat. You know exactly how much business is running on that system and the implications of failure. The reward is less certain and quantifiable. We know change must happen and yet, how can it be quantified with credibility and confidence to dramatically exceed the risk? Unless there’s a “burning platform issue,” the end result of this analysis favors the status quo, which in commerce we know to be a decision that is logical and responsible…and wrong.

So how do you break the cycle? Adjust the risk-reward profile. By lowering the risk profile, customers have more latitude to take chances. Successful businesses have done this in one of two ways:

1. Prove out technology on a smaller brand or business. Businesses that are contemplating change in the core engine often direct a smaller satellite business to use a technology that is different from what is running the core business. This flies in the face of technology standardization and does create a higher spend profile that standardization offers. Yet, it allows the company to explore newer more innovative approaches with lesser risk. The company can iterate – test and learn – while building confidence with the provider with an eye toward someday, approaching the core engine.
2. Take functional actions… with an end-game in mind: Another approach is to recognize that in today’s world the concept of the platform is changing. We call it the Unplatform and it’s defined simply as: a commerce architecture comprised of decoupled independent products, bound together to operate as a collective whole. What this approach offers is the ability to test a key component in the core architecture, without disrupting the whole. The potential here is that a customer can solve practical and immediate problems that return value, without disrupting the core, and at the same time become familiar with newer approaches. Once trust has been established and proof of value earned, customers can take the next step with that provider. One component at a time, one appropriately managed change at a time, the customer evolves an architecture beyond status quo. In this approach, changing architecture is not an adventure in brinkmanship; it’s a journey where trust and confidence are earned one step at a time.