Most of my work is based upon a very simple belief that the only reason organisations invest in technology is because they believe it will add value to their organisation and that it is our job as IT professionals to deliver this value on behalf of our organisations. The most value we can add as IT professionals is to use technology to competitively differentiate our organisations. Think Amazon. Many organisations today believe that the way to achieve this is through digital transformation. There are good reasons for this. Research over the past few years as clearly demonstrates that digital leaders outperform their industry peers by a considerable margin. My analysis of the cumulative research suggests that on average the top 20% outperform their industry by about 40%. The downside is that most digital transformations fail. The degree of failure depends on the research you read but when I say most, the research suggests that 80% to 95% of digital transformations fail to deliver on their promises or outright fail. If you are interested in finding out more about this topic have a read of this blog.
This is a wicked problem and it is particularly problematic if your starting point is that our role as IT professionals is to use technology to deliver value. The research says it’s possible but we are failing to deliver on the promise. Our traditional transformation approaches aren’t working (in truth they never have) and there must be a better way. At the very least we need to stop the insanity of doing the same thing over and over again and expecting different results (to crudely paraphrase Eisenstein).
So what is the alternative? Consider the following process:
Let’s take a look at each step in turn.
Set the Context.
Context is king. Context is the starting point for your transition to a digital organisation and to set the context for your journey. A useful way to set context for your digital journey is to ask and answer the following questions:
- What is our unchanging core? Digital disrupts what organisations do and how you do what you do. If you hope to be successful in your journey to digital you need to create a changeless core that provides direction and guidance for your journey and a sense of stability for your people. Given that technology disrupts what you do and how you do it, the obvious answer is to centre on purpose or mission.
- What does digital mean to us? Before you can become digital you need to define what that means for you. As you do this please note, digital is not really about technology, rather it’s about how you view the world, how you operate and how you intend to create value.
- Digitised vs Digital – which is right for you? Do you really need to be digital or is being digitised the right answer for you or is it a mix of both? It likely depends on who you are or want “to be” and the degree to which your industry is likely to be disrupted.
- Transition or build your digital business model? OK, so you’ve decided that you need to be digital should you seek to transition your existing business to be a digital business or should you build a new digital business?
- What technologies should you invest in and when should you invest? You can’t afford to invest in every technology there is. There simply isn’t enough time or money and not every technology is relevant. How do you decide which technologies to invest in and which to ignore? It all depends on your business model and your competitive positioning. Invest in bleeding edge where it matters most but, use commodity everywhere else.
Prepare for the Journey.
Before you set out on your road to digital it will pay to get prepared so that you can maximise your chances of success. Key areas to consider before you start include.
- Are you a “tech savvy” organisation? Being effectively digital requires you to be tech savvy. A “tech savvy” organisation is one that is competent at investing in technology and turning those investments into organisational value. If you are not currently tech savvy then becoming tech savvy is your first priority (so you don’t just flush money away!)
- Prepare the environment. Einstein said that doing the same thing over and over and expecting different results is the definition of insanity. The flipside of this is that if you want different results (which is the goal of transformation) you need to do different things. The leaders role is to create an environment that makes new ways of operating not only possible but the logical way to operate.
- Leverage your advantages. Leaders often obsess about eliminating organisational weaknesses (we need to be more agile so act like a startup is one classic example). Significant organisational weaknesses need to be addressed. Greatness and transformation however, comes from leveraging strengths.
- Digital Readiness Assessment. Once you know what digital means to you, you will have a sense of your desired destination. You now need to understand where you are so you can set your direction of travel and begin by addressing your most fundamental needs.
Disciplines of Effective Execution
IT, organisational change and transformation are littered with “best practice.” The problem is that much of our tried and true methods and practices are ineffective, particularly in a fast paced changing environment that we do not have extensive experience in. We need to update our ways of delivering change including:
- Iterate don’t transform. The statistics cited earlier in the blog demonstrate that traditional transformation doesn’t work. Further, innovation research shows that innovation occurs through interactions and iteration over time. Ideas building on ideas. If you want to succeed in being digital you need to iterate your way to success not transform.
- Agility and foresight. Being agile is important. It allows you to react quickly to changes in the marketplace. If you want to be a digital leader however agility is not enough, you also need foresight, that is the ability to predict or foresee how technology will change markets and competition.
- Mindset trumps method. Methodologies are important as they provide a common language and a common way of working. They are no silver bullet however and when it comes to delivering value and sustainable change, mindset rules.
- 21st century leadership. The 21st century requires a new leadership style. To be clear it’s not digital that is driving this need for new leadership it is a broader trend to change from industrial style management where automation and efficiency rule in value creation to “post industrial” management where engagement, knowledge and expertise rule in value creation. Digital simply heightens the need.
- Creating sustainable change. He aha te mea nui o te ao. What is the most important thing in the world? He tangata, he tangata, he tangata. It is the people, it is the people, it is the people. This is a well known Maori proverb. It’s somewhat ironic but in the end success in digital is really about people and supporting people to operate successfully in a new digital environment.
Stage your Journey
Based on the above you can plan your journey and it is your journey. Each journey is unique and based upon the competencies you have or need to build, the destination you are aiming for and the market / industry circumstances you find yourself in. That said there is likely to be a natural progression in your journey, a progression that resembles a series of waves of a hierarchy of needs (pick your own metaphor). Consider the following as an example:
- Fix what’s broken. Before you can start your journey “for real” you need to ensure you have the core capabilities you need. This may include re-mediating systems, implementing effective value management and IT governance, organisational redesign and realignment, evolving your leadership paradigm or many other initiatives.
- Build the Platform. While there is a lot more to digital than technology you can’t do digital without it. As a result you need to establish the core platform that you intend to leverage. This platform includes identifying the core technologies you intend to leverage, building the skills and capabilities you need to leverage these technologies.
- Extend and leverage. Having built your core you are likely to be outperforming your industry but there is more to do, more value to be realised. You do this by leveraging and extending the digital platform that you have created. Your focus in extending your digital platform is to create a distinctive and hard to replicate value proposition into the marketplace.
- Press Your Advantage. LIfe is good as a digital leader but the reality is that you now have a significant target on your back. Everyone in your industry will be looking to be as good as you if not better. And it’s not just your traditional competitors that are aiming at you there will continue to be new entrants to your market. It’s hard to become a digital leader, but it’s harder to stay there. This is your focus as a digital leader, to continuously innovate to remain a digital leader or better yet to press your advantage even further.
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