On Digital Transformation
The current problem with Digital Transformation
In a December 2016 article in Fortune, Heather Clancy hit the nail square on the head: “when it comes to digital transformation, most companies don’t know what they don’t know.” This rapid digital transformation taking place now is rooted in what began to take place in the decade between 2000 and 2010. Sally Blount, Dean of the Kellogg School of Management, defined that time as the “wormhole decade,” a period when traditional rules of economic might, social status, and political hierarchy were completely rewritten.” Within that short period, the BRICs more than doubled their share of the World’s GDP, explosion of internet and mobile infrastructure enabled an entire generation of people in developing countries to gain access to information that was simply unavailable to their parents, and technology allowed the formation of entirely new forms of global social and business interaction.
“Vast untapped intellectual resources lying dormant in every company and every community.”
Interestingly, this period of “foundational change” as Blount called it in an article in the Kellogg Insight in April 2016, also saw the opening, by TED, of the TEDx license system, which proceeded to spread around the World like wildfire, exceeding all expectations by orders of magnitude. It has been fascinating to watch this phenomenon from its frontline (our event, TEDx- Warsaw, was one of the very first outside of the USA in the Spring of 2010 and we have run it annually ever since.) Within a few years, such “mini- TEDs” have appeared in virtually every major city in most countries, and plenty of rural locations, too. The size and quality of the community which has grown around it is a reflection of what I can only describe as a hunger for new, positive, interesting ideas by a multitude of ordinary, intelligent human beings.
My take on this is simple – there are vast untapped intellectual resources lying dormant in every company and every community. These resources can propel those companies and communities into a period of rapid advancement. Blount draws several conclusions from the process of change she describes. Of those, the one of most interest to us here is that “Scale is no longer king, but rapid innovation and scalability are.” Tap the right people, give them permission to be their creative best, and magical things can happen quickly. This is how companies can implement a strategy which centres on redesigning their systems with digital transformation in mind. It is time for “normal” companies to be able to take up the mantle of innovation in real, practical ways.
Enabling people to reach their creative and intellectual potential is the key to this process. MIT Sloan and Deloitte University perform a regular survey of executives, managers and analysts to take the pulse of the changes taking place out there, in the real world. The 2015 Survey, of over 3700 people from 131 countries and 27 industries, goes into some detail of what characterises a company that has made the “digital leap,” and confirms that digital transformation is about strategy and psychology and not so much about technology. A sure-footed grasp of technology is of course useful for both executives and employees, but fewer than a fifth of respondents rated technological skills as being most important in order to succeed in a digital environment.
Having a transformative vision, being a “forward thinker,” having leadership and collaboration skills and a “change-oriented mindset” were all placed in the top spot, instead. It turns out “digital leaders” all possess a similar set of character traits and skills: an ability to inspire others, a knack for making sense of the complex and the new, and a deep-seeded recognition of the fact that success in this new reality requires the building of new organisational cultures. The Survey found a troubling fact, however. While all but a few managers and executives “anticipate that their industries will be disrupted by digital trends”, fewer than half find that their organisations are “adequately preparing for the disruptions to come.”
It is impossible to say categorically whether this is a case of the majority of business leaders not doing enough to get ready for digital because they somehow do not see the magnitude of the coming earthquake, and this is a worry. There is hope, however. A follow up study by MIT Sloan / Deloitte University found that “digitally maturing organizations have organisational cultures that share common features,” and this is independent of industry, and agnostic of geography. Those features, as will not be a surprise to us by now, are: “an expanded appetite for risk, rapid experimentation, heavy investment in talent and recruits, and developing leaders who excel at ‘soft skills’.”