Shantanu’s Story — disruption is a not a death sentence for incumbents

Adobe’s is perhaps one of the most successful yet least-discussed business transformation stories in the world since the start of the commercial Internet. And that’s a shame, because it holds a clear message of success —  and clear replicable lessons for global incumbents in an age of disruption.

Consumers love disruption until they put on a suit and go to work, suggests Adobe Chairman and CEO Shantanu Narayen.

Delivering the keynote at today’s Adobe Summit in Las Vegas, he told delegates “As businesses, we’re struggling to keep up or racing to stay ahead. And just when we think we’ve figured out our digital strategies, new experiences emerge, competing for our customers’ attention.”

He said this creates more pressure and fear across industries than he had ever seen in his career. “That, in turn, is creating a mandate for every company to transform themselves. And Adobe is no different.”

Describing the company’s own transformation journey, he revealed that in 2008, Adobe was at a crossroads. “Creative Suite, Photoshop, Illustrator, Acrobat, were all leaders in their category, but the company’s growth was stagnated. Mobile was upending our software desktop business. While we were focused on tools to handcraft web pages, organisations building web sites at scale were passing us by.”

The status quo is not a strategy

“Our past successes had led us to believe that our revenue growth was going to continue forever, but we were wrong. And that’s when we faced one of the key tenets of modern business today: preserving the status quo is just not a business strategy. As a leadership team, we were faced with an opportunity, on the one hand, and a challenge on the other.

“So we asked ourselves, if we were in the content business, why were we only in the creation of content? Why weren’t we following through with management, measurement, and monetisation of all of that content?”

That change began with a very big and surprisingly risky bet than in contrast now seems like prescience: the acquisition of Omniture in 2009. Critics were stunned by the price, and skeptical that Silicon Valley and Salt Lake City could ever meld a successful culture together.

The rest, as they say, is history. A little under a decade later, Adobe finds itself leading the pack in the marketing cloud space. But like all great transformations, it was no easy march.

Digital disruption is all or nothing

The company also bet on cloud computing, necessitating a rebuild of its Creative Suite from the ground up. Along the way it had to endure taunts from the industry that it wasn’t “true cloud” and that its pricing models belied its ancient IT heritage. For a while, that last criticism was perfectly valid.

Changes to Creative Cloud and Document Cloud represented a seismic shift for Adobe, Narayen said. “Our desktop business had run the same way for decades and it was a well oiled, global machine. But every single function in the organisation had to redefine what we did. For us, this underscored what we think is another tenet of global modern business: We think transformation and digital disruption is all or nothing. And once people committed to that change, it affected every part of our company.”

Over the last nine years Adobe has recast its relationship with its customers — a process that proved uncomfortable for both buyer and seller. “But we persevered, we persisted, we experimented, and we evolved, all the while focusing on delivering of this promise of continuous innovation for our customers.

“We had to reinvent our systems and processes from product to global market, from front office to back office. Everything that we did had to become more agile, and aligned to our customer-centric model.”

Teams had to be reinvented, which Narayen describes as the hardest — but also the most rewarding — part of the transformation. “Leaders at all levels of the organisation stepped up to be champions for this change. They evangelised this vision to the eternal cynics. They broke down organisational silos and advocated customer-centricity across all teams, stepped up to perform new jobs, and invented new vocabulary that had never existed before.”

Footnote: Today Adobe is recognised as the leader in digital marketing across a plethora of analyst reports (including 17 in 2016). It processes 100 trillion data transactions per year, has over 3800 partners (including ten of the world’s largest agencies and eight of the 12 largest systems integrators) and has a market capitalisation of $US61 billion. The week before it bought Omniture in 2009 its market cap was a little over $US17 billion.

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