This blog formalises the insights, ideas and opinions voiced at our lean beer conversations held in August in Christchurch and Auckland. The specific topic that we discussed at this session was “Execution Strategies”. The actual notes of these conversations can be found here.
Digital transformation is the organisation change initiative of our time. Depending on the survey you read anywhere between half and 90% of organisations have begun a digital transformation of some kind. Then there is the slew of other surveys that find that most digital transformations are yet to bear fruit for their organisations. For example Bain and Company reported in November last year, that based on their research, only 5% of digital transformations have achieved or exceeded their initial expectations. A Forbes article was much more optimistic. Their blazing headline was that 86% of digital transformations fail to deliver implying the 14% actually succeed. Some of this may be a result of timing, that is organisations have begun their transformation but they are not sufficiently far through to have realised the benefits. While this is possible it’s unlikely to be a major factor as the history of transformational change programmes is poor, whether they are digital or not, with Mckinsey reporting that 70% of all transformation programmes failing to deliver.
This occurs to me as a major problem for organisations who were born and grew up pre digital (aka analogue organisations) and are faced with the challenge of becoming digital or at the very least being able to compete with digital entrants to their marketplace. These statistics suggest that if we continue to lead and manage transformations as we have always done then most will fail. Most means somewhere between 70% and 90% of transformations will fail. Persisting with transformation in the face of these odds seems like the classic Einstein definition of insanity, doing the same thing over and over again and expecting different results. It makes me wonder why do we persist? and what is the alternative?
I’m not sure I have a great answer to why we persist with transformation. The best answer I can come up with is that it’s likely to be the same dynamic that sees large parts of society take on extreme diets or radical fitness drives or take on any number of other radical changes. We believe we can make sustainable change through a massive one off effort now. The process is familiar to all of us. We commit to a goal, we define plan, we grit our teeth and succeed mainly through willpower, we achieve our goal and celebrate and then we slowly regress back to the way we were before. We have created the change but we haven’t changed the essence of who we are so we regress but to the way we were and many many cases worse than we were before.
Transformations are like diets. It can get results now but in the long term 90% of diets fail.
It happens with diets, it happens with fitness routines, unfortunately for many it happens in our relationships and it happens in organisational transformation. In the long term all of these large one off efforts fail and it is why I quipped in this blog that I am not a fan of transformation. To create meaningful long term change you need to change the essence of who you are. That is you need to create a lifestyle that is consistent with maintaining the new and preferred state. This is not a project and it is highly unlikely that you can sustain the lifestyle in the long term through willpower. Rather you need to be the kind of person (or organisation) that is consistent with this new state.
When it comes to digital transformation, yes we can spend a lot of money on new and exciting technology, we can talk a big game about customer centricity or design thinking or implementing agile or any number of other changes (the equivalent of going on a diet) but if we don’t change who we are as an organisation then in the long run we are likely to fail. In the long term you can’t do digital through a one off change you have to be digital on an ongoing basis.
To go back to our diet metaphor, a diet can produce short terms results but long term success requires a change of lifestyle. You can’t use willpower to create a different lifestyle, it’s not sustainable, you actually have to be a different person so that you consistently do different things and create different outcomes.
Being digital rather than doing digital is the alternative. For an organisation to be digital requires that you reexamine and actively look to recreate who you are, who you serve, what you do for them, and how you do it. It requires you to recreate everything in the organisation within the context of who do we need to be to be successful as a digital organisation. Everything is up for review, except maybe your purpose and even that should be actively reconsidered.
Doing this work takes time, it’s more a journey of discovery than it is an up front planned outcome. As Kerry Patterson et al says in “Change Anything“:
“So, if you want to succeed, you will have to do what successful Changers do: You’ll have to give up the hope of simply being the subject of some smart persons discovery. You’ll have to be both subject and scientist – in search of the most important social science discovery of all: how to change you.”
It’s much harder to create a new lifestyle, than it is to go on the latest diet or latest fitness programme but it is the key to success.
This logic is equally applicable to organisations. You can’t just pick up someone else’s smart idea (agile? design thinking?, customer centricity? etc etc etc) and implement it. You need to become both subject and scientist and search for the most critical insights of all, which is, how to use these insights to change you?
You gain an insight, you run an experiment, you learn something and you start again. It’s iterative, its emergent, it’s highly personal and it takes time. This scientific approach is an alternative to the one off silver bullet approach of transformation.
I don’t claim that this is new. It is the core of Deming’s TQM, lean and has been incorporated into many agile methods but I am advocating that you apply this process everywhere. From strategy development, to culture evolution, to thinking about who your customers are and what products to provide, to how you organise, to how you get work done to ……. everything, everywhere.
When it comes to “going digital” gone are the days of transformation which creates the master plan back from a vision rather we need to define our digital vision and experiment and iterate forward.