In the first of a four part series covering essential transformational strategies we explore Digital Transformation.
A lot of the executives we speak with feel a little like the five blind men in the parable about the elephant. In that story each man touches a different part of the elephant and gets a different view as to what the elephant is like. Touch a tail, it’s like a rope. Touch a trunk, it’s like a snake. And so on.
Digital can be the same. Talk to one evangelist, guru or vendor and it’s about big data. Another and it’s about the mobile customer experience. Another says it’s about cloud, or about behaving like a start-up. Sometimes it’s about of all of these and more.
Regardless, every evangelist, guru or vendor worth their salt will tell you – in no uncertain terms – it’s somewhere we’ve never been before.
We don’t believe that’s completely true. Today we’re at a point on a journey we’ve been on for a while which – if we take the right approach – can change our organisations, our cultures and our entire market position.
Disruption or Déjà vu?
In 1995 Nicholas Negroponte , then-Director of the MIT Media Lab, wrote in his book Being Digital: “The change from atoms to bits is irrevocable and unstoppable. Why now? Because the change is also exponential — small differences of yesterday can have suddenly shocking consequences tomorrow.”
Whilst it would be hard to argue that we haven’t seen significant change over the past two decades, in retrospect it's also hard to describe it as ‘exponential’ and the consequences as generally ‘shocking’ in comparison to what we now see as a disruptive future.
So today, when we consultants speak of inflection points and digital disruption, should anyone really take note?
The answer is, “Yes”. Things are very different than they were in 1995.
Firstly, we now have the technology to deliver on some very big visions, and the barriers to deploying it have fallen away as we moved to ‘as a Service’.
Secondly, the past twenty years has created what you might call the first wave of digital business, where pretty well everyone relies on information technology in one way or another. Unfortunately, a lot of that information technology is ‘legacy’ and leaves its owners open to attack and disruption by competitors leveraging newer technologies.
Thirdly, technology issues have finally found owners at the top of the organisation.
The latest global Harvey Nash/KPMG CIO survey reports that in 36% of organisations with a digital strategy, that strategy is owned by the board or C-Suite. This compares with only 16% of companies where IT owns digital, and a further 14% where IT shares ownership with marketing.
The movement out of functional silos to the boardroom is not surprising. The stereotype of the tech illiterate board is now a thing of the past, and the market is demanding that the organisation’s leaders – whether that organisation is public or private – communicate a compelling vision of the future which harnesses the opportunities of technology.
The move of digital to the top table heralds its real move toward broad business strategy and away from what has often been a fairly narrow focus on point solutions emphasising technology, techniques or tactics. Not only does this narrow focus miss the opportunity to drive real transformation, it also fails to deal with the most vexing (and potentially most exciting) challenge of digital transformation: the waves of change will not end!
Surfing for fun and profit (and transformation)
In his book Good Strategy/Bad Strategy: The Difference and Why it Matters, Richard Rumelt tells a story about interviewing Steve Jobs just after he returned to Apple in 1997.
Apple was a mess, so Jobs basically cut it to its core (pun intended) in order to keep it from collapsing. When Rumelt asked Jobs what his long term strategy was, he said something to the effect that he was just going to try to stay in business and wait for the next big thing.
The next big thing – the next big wave – for Apple was digital music, and the iPod was born. Then another wave and the iPhone, and another the iPad. Not a bad strategy! The thing is, it requires three different organisational skill sets that most organisations (and individuals) struggle with:
- Recognising a wave, jumping on it and using it to transform your market – or at least your relationship with the market. This market transformation is the drive for innovation.
- Transforming the organisation’s wave-riding skills so they become better and better over time at surfing those waves. This transformation creates adaptable organisations.
- Developing the necessary aptitudes and attitudes to handle the ups and downs of wave riding, to be ready and able to grab the next attractive wave when it comes along. This is the creation of a resilient culture.
These three transformations support each other, creating a virtuous cycle of growth and development. They also are applicable at all levels of the organisation from the enterprise to the individual business unit.
However, you can’t begin the process if you just sit on the beach. You have to start by jumping in the water, grabbing a wave and start surfing toward innovation.
Transformation and the C-Suite
So back to the C-Suite, where ownership of the digital agenda should rightfully sit.
Peter Drucker often said that the most important question for an executive to ask is “What needs to be done?” not “What do I want to do?”
When it comes to digital disruption, what executives need to do is help their organisations achieve clarity. An organisation of the blind, aimlessly groping an elephant, is unlikely to be a very successful or sustainable business model.
Executives also need to help their organisations realise that disruption will not be a one off event, and that our current environment provides a great opportunity for us to transform our markets, our organisations and our cultures to create a better future.
And as Drucker also said: “The best way to predict the future is to create it”. In my next three articles, I’ll explain three strategies for creating your own organisation’s digital future.
- Market Transformation: Innovation through Design, Data and Devices
- Organisational Transformation: Building an adaptive organisation through Platforms, People and Partnerships
- Cultural Transformation: Developing resilience through Simplification, Speed and Sustainability
- Accelerating Digital Transformation through implementing a DevOps Capability
- Lean Change: a unique approach to managing change at speed