Will my Digital Transformation #fail?

Posted On May 24, 2020

Short Answer – very good chances that it might. 84% of companies, says Forbes[1], fail at Digital Transformation. That doesn’t bode well for organizations attempting it, nor for people pushing DX. So, what does an organization doing the DX way, have to do to be in the 16% bracket?

I will attempt below to understand why this happens, by looking at the past (Evolution), looking at some evident symptoms (Approach), and the changed workforce demographics (People) and also look at the single most important strategic reason (Strategy).

Evolution of Management, Operating Models and Plethora of Technology

In the last 80 years or so, management and organizational behavior has been studied to shreds, management education introduced, complexities added, new-fangled concepts developed, witch doctors[2] joined the game (especially since the mid ‘90s) and now the gush of technology based change is almost overwhelming. The changes in every industry have been stupendous and unforeseen in the last decade. People are falling over each other doing version control on Industrial Revolution, Services, Offshoring, Internet, Web, Digital and RPA (which hasn’t begun to settle yet). Even business is Business 2.0 now. The pressure to go Digital is unreasonably immense and is forcing organizations to tread that path, often without preparation.

The Digital Gold Rush

In the past few years, I have seen a number of Digital Transformation (DX) projects and programs take off, go on for a while and not deliver any tangible ROI yet. Many of the organization leaders remain entangled with vendor or advisor suggested technology. To me, that is a failure.

During the gold rush, as you know, people who sold shovels made the most money. And in today’s gold rush (aka Digital), it is the research companies, advisories and myriad other consultancies raking it in. Pundits say, Digitalize or Perish. There is enough advice available; the problem is most of this advice is from people who have not executed a DX on their own. 

The changed dynamics of the workforce

One thing to appreciate is that the demographic shape of organizations has changed. Over the last decade or so, line management has abdicated responsibility for people management (especially in services industries), and HR folk often blather on the millennial complexity. Unfortunately, neither of them (usually) comprehend the magnitude of the complexity staring them in the face anymore. It isn’t just millennials versus the others. It isn’t one set of millennials. The millennial age bracket ranges from kids just a couple of years out of college to people with about a decade of experience to adults who might have spent some 18 years working. These are three sets of people in there, and their outlook towards life is different from one another, as is their relationship with technology. 

The changed dynamics of the workforce

One thing to appreciate is that the demographic shape of organizations has changed. Over the last decade or so, line management has abdicated responsibility for people management (especially in services industries), and HR folk often blather on the millennial complexity. Unfortunately, neither of them (usually) comprehend the magnitude of the complexity staring them in the face anymore. It isn’t just millennials versus the others. It isn’t one set of millennials. The millennial age bracket ranges from kids just a couple of years out of college to people with about a decade of experience to adults who might have spent some 18 years working. These are three sets of people in there, and their outlook towards life is different from one another, as is their relationship with technology. 

But, why does DX fail?

Besides all other types of reasons you hear, the most devastating one is purely a strategic one.

DX causes change not as a wave coming from a central point (unlike traditional transformation), but more as multiple sets of ripples emanating from multiple points of disruption in the business (core processes, customers, partners, back end processes, vendors, employees etc.). Many of these ripples will clash and overlap. If your enterprise strategy can’t handle this, your DX program is in for trouble. What compounds the problem is, somewhat surprisingly, most companies still do not seem to gather that DX isn’t really:

• Just improving the way business is done as usual, but about re-imagining the way business is done.
• Driven only by cost saving pressures, but by finding new ways of grabbing new revenue
• About just better customer interaction but about new customer engagement and interactions
• Supposed to be IT driven or led, but business led. IT must be an enabler, but not the end goal. So, DX isn’t about IT consolidation and rationalization…it isn’t a procurement game.

Lack of enterprise wide strategic alignment, resulting in resistance coming from lack of understanding of organization’s way of doing business and the inability to take advantage of the multiple sets of ripples, will bring imminent pain. 

Finally…

It is important for a shift in the thinking of executives and employees to understand that changes will happen rapidly, be overlapping and occur multiple times during the years of transformation. It will be important for the organization to quickly learn, facilitate new interactions by breaking down past silos, increase collaboration and reimagine business processes.

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These are my building blocks. Do these fundamentals sound right? Have you seen them happen? If yes, you might like my further solution-oriented analysis on how to break silos and reorganize in my next post. Visit us on the the 3nayan web site or write to us.

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[1] Forbes article: by Bruce Rogers

[2] The Witch Doctors: Making Sense of the Management Gurus: by Adrian Wooldridge and John Micklethwait.