In my early work on digital transformation, my primary research focus was to provide some structure and frameworks around how large corporations could successfully navigate this new phase of business transformation. Of course, at the time, digital transformation was not the “Thing” that it is today. The topic has become not only very newsworthy but a kind of universal “corporate mantra” for all business leaders seeking new sources of value. Who are you today if you don’t have a digital strategy, a digital customer experience, a digital marketing and social plan, automated digital operations and factories, a digitally-connected workforce or a platform and ecosystem play (or all the above for that matter)? On one side, that’s great news. We can all rejoice that business leaders have finally embraced the transformational impact that digital technology is having on the shape and performance of corporations. And we can clearly see this increased awareness from the data - at least Google Trends search data.[i]
But, with now a decade of hindsight, it seems that this increased awareness has not been
matched by an equivalent advance in our clarity on the subject. Just like strategy, leadership or agility, digital transformation has fallen victim to the managerial “over-hype machine”. Digital Transformation has become an industry in itself and, with it, the true power of the phenomenon has become diluted to the point where it is virtually meaningless today. Why is that and why has it happened so fast? Truth is, the digital transformation agenda has been hijacked by a number of well-intentioned, and not so well-intentioned, parties. And the culprits are many.
The “tech crowd” came up trump first (no pun intended). Technologists and tech vendors
seized the opportunity and became enamoured with the digital part of digital
transformation. Every tech product or application (regardless of their significance for
corporate performance) suddenly became the solution to digital transformation success.
From cloud computing to cybersecurity, to workflow automation and many others. Even
the most obscure tech enablers became marketed as core accelerators of digital
transformation. The transformation part was strangely forgotten and, with it, most of the
potential business impact. But the tech crowd cannot be solely to blame. After all, the job of continually advancing technological innovation is critical to digital transformation.
Then came the “Disruption Merchants”, focussed on portraying digital transformation
mainly as being the destruction of established industries at the mercy of new innovative
technology or start-ups. Power to the small. David and Goliath. Every industry became
disrupted, and every large corporation was on the brink of collapse overtaken by an
emerging and revolutionary business model. Hummmmm! Really? Fact is, we’ve seen more
healthy collaborations between the Davids and the Goliaths than fierce competitive battles. The fascination with disruption hides an awkward truth, we assume it is happening, but we don’t know for sure. Research failed to find evidence of any correlation between the hype around an industry disruption and actual disruption within that industry.[ii] Of course
disruption does occur, and the understanding of the underlying economics is critical to
formulating robust strategies. But, to be managerially useful, real industry disruption needs
to be defined and measured.
Not far behind came the “Quants”. The answer to all things digital transformation became
data, and lots of it. Good old databases were soon outmoded by farms and then entire
lakes. Data scientists became the rock stars of the corporate world. After years of customers exerting power through social media, it was time for data science to retake control of about everything. We will predict what you are going to buy even before you have any intention to purchase, we will have self-adjusting marketing mixes through completely programmatic marketing functions and so on. Hummmmm again! Of course, marketing, customer understanding and operations management have all become much more scientific, and this is a good thing. But, on top of analytics, creative skills and behavioural sciences remain important components of designing world class customer experiences. The promise of IoT has amazing potential for running real-time operations, but we are still early in the curve. And none of this happens without well manage structured and unstructured data and platforms, which many companies are still struggling to implement. Data and analytics are critical components of any digital transformation, but it’s not the universal “pixie dust” it is often portrayed to be.
Last, but not least, the “bots” barged into the digital transformation party. First in their
Armageddon incarnation, where everything was going to be automated and most jobs were going to be replaced by machines. Work, as we know it, was destined to disappear.
Replaced by a life of leisure, for the most fortunate, and poverty for the others. The doom
and gloom were soon overtaken by a positivist incarnation of AI/automation, where most
business problems will be solved through algorithms, all diseases will be cured through
numbers, and we will create millions of, yet undefined, new exciting jobs. Now, that’s much
better. But the gap is still large between the promise of an AI-driven world (for good) and
the reality of where most corporations are. No question that AI, properly implemented, will
have a massive impact on the way we run our corporations and augment our employees’
capabilities. But we’re very early in the process, not just technologically but in the way it will
impact our people, organizations and the nature of work.
Technological progress is, and will continue to, relentlessly provide opportunities to do
amazing things with our lives and our organizations. Engineers and innovators are just doing a good job at their job of inventing. And that is a good thing. But we need to move the cursor of digital transformation closer to the “transformation thing”. How we adapt our
organization, organize work and ensure a prosperous future for our workforces. Organizations are complex systems, so it’s not easy and there is no silver bullet. We need to
balance these amazing advancements in digital innovation with an equivalent progress in
organizational innovation.
The hijacking of the digital transformation agenda is not a result of some deviousness or evil thinking. It happens because people want the magic formula, the instant results, the step changes, the secret sauce, the moon shots and other hyperboles. Truth is, digital
transformations are long cycles and systemic. It requires many technological and
organizational components to change in parallel to drive business performance. It’s unlikely we will ever match the speed of change within organizations with that of technological innovation. But, if we want to build a positive future for our people and organizations, we need to make that gap smaller.
[i] Disclosure: I, shamelessly, started the cycle from the date the “Leading Digital” book was published in October 2014.
[ii] “Lifting the Lid on Industry Disruption”, M. Wade, D. Bonnet, J. Shan, Journal of Strategy and Management,Vol.13, No4, 2020