The Rules of Digital Transformation

In five years time we’ll look back and realise we had it wrong about digital.

Digital transformation was never about digital, and rarely about transformation.

It’s actually about the processes by which you change your business model or approach. Some of which will have digital elements.

The problem I have with digital cheerleading is two fold:

  • The implication that all our problems are easily ‘solvable’ 
  • The subsequent rush towards technology – as if digital is the only solution.

This week I was at the BT Innovation Centre talking about our experience of change. It was a wonderful couple of days but I left with a worry that our obsession with digital transformation is becoming the problem rather than the solution.

I’m at the latter stages of service design across a large organisation and so far one thing is clear:

Pretty much everyone said they wanted a digital or system solution.

What everyone really needed was a hugely simplified business model or process that reflected current strategy.

My issue with digital transformation and the snake oil salesmen that surround us with system solutions is the implication that everything being digitised is somehow better.

The evidence that technology makes us more productive is weak at best. There’s an ever increasing gap between technological sophistication and work actually being performed. Think on that before you purchase that new software.

Also most change isn’t truly transformational – its focus is firmly on improving efficiency and customer experience rather than rewriting the business model.

Research from McKinsey supports the fact that most transformation programmes fail, finding that only 26% of transformations have been “very or completely successful at both improving performance and equipping the organisation to sustain improvements over time”.

Their research goes on to suggest that the odds of making a transformation successful can be dramatically improved by how we talk about change. The way we frame it is an essential element in how people embrace and implement it.

The irony is that continually talking up transformation actually makes it harder to implement. Telling people they are in for big changes invokes their status quo bias – people naturally prefer things to stay as they are and perceive any change as a threat or a loss.

By breaking change down into the simplest possible elements we would boost the chance of success. (This lovely sketchnote from Tanmay Vora sums up my thoughts here.)

72_changeideas

Digital will never be a silver bullet for problems that have beset organisations for decades.

Equally – claiming digital as being the driver for everything dumbs change down. Implying everything can be solved with a system does a huge disservice to our people and the human capacity for creativity and innovation.

Changing your business has many elements: leadership, people, process and, of course, digital.

Ultimately though there’s only one rule to live by here:

Strategy , not technology, drives transformation. 

  1. Paul – a useful addition to the debate, and (as per your theme) an incremental step towards really understanding what the business needs. However, in my opinion (based on doing digital change for almost all of the last 38 years) you haven’t gone deep enough or far enough in your analysis. The real answer is to develop capabilities that are appropriate to your business model, and (like Napoleon’s Battalions) sufficiently coherent (i.e self-sufficient) to be able to change very quickly according to changing business needs. Just to clarify that statement – everytime a project is initiated to effect a change (IT or non-IT) the biggest brakes on the pace of change are external dependencies. You need to create capabilities that are not interdepe As you rightly say, at any one time, the capability may be more or less based on technology. Regards

    Reply

    1. Thanks Doug – valuable points

      Reply

  2. And the wonder of it all is it made us look at our systems; find out what we do and ask can we do this better? Expensive way to carry out this exercise thanks for your insight

    Reply

  3. Great post Paul! You’ve probably already seen this, but Janet Hughes’ latest post is good https://medium.com/doteveryone/what-a-digital-organisation-looks-like-82426a210ab8.

    Hope all’s well,

    Dyfrig

    Reply

    1. Thanks Dyfrig – have to admit I’ve only just read that post. Great points and I love the concept of the digital superhero!

      Reply

      1. No worries, just thought it would be useful. The whole digital superhero concept is something for all organisations to bear in mind, and it’s something for us to guard against when we look at our own digital development. Have a great weekend!

        Reply

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