"Digital transformation" (DX) is currently one of the hottest topics with IDC predicting earlier this year that global DX spend will reach $1.8 trillion in 2019 and they forecast $6 trillion in global DX technology spend over the next 4 years.
In many respects, this has been great for me personally as the calls for inspirational program kickoff keynotes, workshops and master classes on the topic of digital transformation and innovation have surged. On another level, it's been a growing cause for concern and in my typical provocative manner, I've been asking some challenging questions and forcing my clients to consider things from a broader perspective. I'll paraphrase a recent discussion to illustrate my point:-
Client : "We are looking for an inspirational, high energy keynote speaker to kick off our digital transformation initiative"
Me : "Great - how did your electrification transformation go?"
Client : "?"
Me : "When are you kicking off your AI transformation program?"
Client (increasingly bewildered) : "???"
Me : "You have appointed a Chief Digital Officer, are you planning to appoint a Chief AI Officer in the future?"
OK - I wouldn't normally be so obnoxious and obtuse with a client but this was someone that I already have a really good personal relationship with and I was trying to drive home a point. You see in my opinion:-
The long term success of any organisation is largely dependent on its ability to continually adapt and respond to the constantly changing world in which we exist. (click to tweet)
Those organisations that cultivate a culture of continuous transformation enabled and accelerated by appropriate governance, process and technology, are best placed to leverage change for competitive advantage and they are able to respond in a proactive manner to the impacts and implications that current and future changes will have on their staff, their business models, their industry ecosystem, consumer behaviours and society in general.
Responsive organisations such as these have the ability to shape the future, as opposed to simply reacting to it.
The sudden surge in DX investment indicates that the vast majority of organisations have not had their eye on the future. They have been so focussed on "business as usual" with quarterly or annual targets and maximising shareholder returns that they have been left behind in a world that "went digital" years ago. Now they have to play catch-up and it's costing them - not only in hard cash terms but in market share lost to those organisations that have quietly and continuously been adapting to change.
In recent years there has been a groundswell of initiatives touting the need to increase employees "digital fluency" (described as "the ability to select and use the appropriate digital tools and technologies to achieve a particular outcome") and during Gartner's recent symposium they have started talking about "Digital Dexterity" (who doesn't love a bit of alliteration eh?) which are a good start but I fear they focus too much solely on the "Digital" part which ultimately causes a completely new set of problems for an organisation in the long run as they start to grapple with:-
- who should be responsible for digital?
- where should it sit in the organisation?
- what is the scope?
- what is digital and what isn't?
- how do we know when it's "done"?
I've seen many organisations appoint a Chief Digital Officer who kicks off a Digital Transformation program with a very narrow scope and remit dependent on their previous career path and what they perceive "Digital" to mean. For some, a digital transformation is a simple website revamp paired with a customer facing chatbot for self service and some automated process flows plus the all important "omnichannel digital customer experience" - job done?
A few others just want to throw technology at everything in the hope that this will solve all their problems, so long as they are "doing stuff digitally" it's all good - these often end up with digital diarrea ("the same 💩, just faster ...........")
In some of these same organisations splinter groups have arisen around Artificial Intelligence, claiming that this doesn't fall under the "digital transformation" remit and therefore requires its own "Chief Algorithm Officer" who is responsible for everything AI ........... now maybe you can start to see the rationale behind my opening line of questioning with my client - (who already has a "Chief Data Officer" by the way) - what is going to happen with Augmented Reality, Drones, IoT and any further future technology yet to be invented? Has anyone appointed a "Chief Drone Officer" yet? Just how big is the c-suite going to grow??
And what about the other (non digital) factors that will have an impact on their organisation and require transformation? For example socioeconomic factors like sustainability, eco and the circular economy (which are huge trends putting pressure on business models and supply chains right now) or regulation, or politics or???? Being a UK company I asked my client if they were considering appointing a "Chief Brexit Officer" as in the short term, this would potentially require the biggest transformation his organisation would need to undergo for quite a while (I actually think they had briefly considered this already!!)
My main issue with the need for a Digital Transformation is that too many organisations focus on the "Digital" aspect and not enough on the "transformation" aspect.
The transformation is the hard part.
Successful transformation requires, in fact it demands inclusion of all your employees and a culture that is comfortable with and embraces change from the very top to the very bottom of the organisation.
- You need to be scanning the horizon for change and continuously contemplating the impacts and implications these changes will have on your organisation, your industry ecosystem, your customers and even society in general.
- You need to involve all your employees in this process - harnessing their energy and insights as inputs, enabling them to voice their opinions and concerns and getting them comfortable with what the changes mean to everyone
- You need to continuously experiment, adapt and leverage change to your advantage
- You need governance and process that enables and facilitates constant change
- You need this to be woven into your "business as usual" to become your "new normal"
Transform the people and they will help to transform the processes and the business as a result.
Yes, of course I realise that this isn't as simple and straightforward as I've written it and yes, I'm fully aware that there is a huge amount more to it - I've accumulated stories and scars over more than 30 years of struggling in organisations that have developed a culture that is, to their detriment, resistant to change.
But, if you start with the above, you shouldn't NEED a "digital transformation" OR a "<fill in the latest trend here> transformation" OR a raft of associated new job titles and silos in the future - it will all simply be business as usual.
(If you are interested in gaining hands-on experience of how this could work in your own organisation, please take a look at my one day Transformation Master Class for further details).