Digital Transformation Failures Part 4: Faith, Cliches, and Other Mistakes
In this final installment in the Digital Transformation Failures series, I tackle faith, cliches, and a few other mistakes that organizations make on their way from a traditional IT organization to one that is vibrant and responsive to change.
Some reading this series may argue that digital transformation is itself a cliche. I would agree. I use the term as an entry point for the conversation, a phrase that evokes the essence of the problem—big enough to contain it but not so big that it includes everything. Digital Transformation had issues at its inception because, in many ways, it discounts the investments and changes that organizations adopted since the 1970s. Doing anything with a computer digitally transforms a process from its starting state. All things done with or through computers do those things digitally.
The problem, though, is that pundits, analysts, and marketers need a way to differentiate phases of evolution, a demarcation of a state change that, before a certain point, something is one thing and then it is something else. I am currently reading Otherlands: A Journey Through Earth’s Extinct Worlds by Thomas Hallida. He makes the same point about the evolution of animals, most particularly humans. We talk of the “earliest humans” or the “emergence of humans.” There is no there to be had. The populations that became human lived with indistinguishable contemporaries. Isolated populations diverged slightly, but if looked at during that time, scientists would be hard-pressed to find differences, let alone forecast a trajectory for a species.
Digital Transformation attempts to create a vision of a world facilitated by technology as distinguished by a world of manual processes, perhaps captured in computers but not elegantly orchestrated. The difference is subtle. ATMs have been around for a long time, offering digital experiences to customers—workflows and other internal automation makes back offices more efficient.
If Digital Transformation has a real meaning, it is one of a mindset in which the business thinks creatively, perhaps using design thinking, to develop customer-centric solutions—another minor branching of the journey. Customers drive the use of tools for experiences rather than the tools driving changed experiences. Tools in service of what customers want rather than in service to those who package them based on a perceived need.
Regardless of how you arrived at an interest in Digital Transformation, this series has focused on fundamental issues facing those seeking to deliver digital solutions for customers and for the business. They maintain value no matter the name associated with the change. Holding too tightly to plans in a changing world, adopting cliches, and not realizing the value of story in selling an idea can be applied to many aspects of life because, in the end, we are all transforming all of the time, and these lessons can help make transitions from one state to another more enjoyable, more meaningful, and less stressful.
Sticking to the “plan” when the world changes
Plan too big or for too long a horizon, and the plan quickly becomes disconnected from the work. Agile approaches offer incremental activities aimed at delivering on near-term expectations (sprint by sprint), but they sacrifice long-term visibility on schedule and communicate a sense of scope.
The truth is long-term project visibility is a false security blanket. Digital transformations based on long horizons will find it challenging to refit should the world change—too many dependencies. The logic requires retooling, not just a rearrangement of tasks. With agile, the backlog and the vision remain. The next increment becomes a choice, not a mandate. Agile only succeeds when it reflects the reality on the ground. Tasks attach with loosely coupled dependencies. Sticking to the plan gives way to moving in the right direction.
A better approach to thinking about the future uses three tiers of planning: agile for execution, frameworks for visibility, and scenarios for monitoring uncertainty.
Agile and its backlog capture vision, context, and the work of the moment. Frameworks offer visibility into what comes next, informing decision-making without being mired in the details. Organizations executing an assessment phase know strategy design follows assessment. They won’t face strategy design without assessment data. If strategy begins without data, the incoming data might force massive changes to the uninformed strategic assumptions. The framework ensures that they won’t be facing the future with a blank sheet either.
Scenario planning expands the horizon for how uncertainties may play out, offering context for vision and ways of testing every design, from assessments to strategies, from user experiences to back-end technology investments.
One of the worst cliches is for businesses to consider emulating the Silicon Valley startup mentality. Silicon Valley is mythical to anyone who hasn’t worked there. For those that have worked in the Valley, constant churn and failure lead to anxiety—thrills certainly as well, such as when a startup lands funding or goes public—but more often, hard work that may lead to little more than a line on a resume, and hopefully some good personal learning experiences. If successful businesses sign on to the Silicon Valley model, they also sign on to the close to 90% failure rate.
Launching new ideas, testing them in the market, and mostly failing removes poor ideas, poor leaders, and poorly run companies from the landscape. The day you walk away from a one-story, sprawling lab building still brandishing a logo for a bankrupt firm (that is also on the polo shirt you are wearing) is pretty disconcerting for the people formerly associated with those companies.
Failing fast often fits as part of the perception of Silicon Valley. Test stuff, toss it into the market and move on to the next idea if it doesn’t work. It isn’t that simple. Some not-so-good ideas attract a lot of money, and they die over a long period of time. Sometimes they fail slowly. Sometimes they succeed slowly. Learning can also lead to the company failing, which is a very costly way to learn.
The better strategy employs failing thoughtfully, understanding what works and what doesn’t, and how to exit gracefully. Enterprises are not startups. Digital transformations gain nothing from slipshod approaches to implementation. While failure is inevitable, how failure gets realized in an enterprise is much more controllable than in an open market. Yes, some aspects of Digital Transformation will face the market, and some of those efforts will fail too, but they need not take down the company as startup failures often do. Enterprises can afford to design experiments. They should test hypotheses rather than implement risk-it-all maneuvers.
Misunderstanding important concepts
Disruptive technology and business models change assumptions about how the world works, what people are willing to accept, how people buy, and how products or services get delivered.
Disruptive technology and business models exist parallel to organizations that put those ideas into practice and disrupt markets. However, there is a significant strategic difference between becoming a disruptor and leveraging disruptive technology to change how a business works or interacts with its customers (or both).
The leaders funding Digital Transformation, and managing it, need to be precise. Applying either disruption is hard. Disruptive technology may prove immature and buggy—perhaps untrustworthy as a tool to rely on for essential functions. Being a disruptor means embracing a disruptive technology (or more than one) to become a disruptor. Tesla creates vehicles with drive trains and batteries very different from other manufacturers. Their go-to-market approach also differs significantly from traditional auto sales. Purple employs advanced materials to disrupt the mattress market.
Grammarly applies AI to deliver grammar checking as a service across PCs, Mac, and Chromebooks, even to Microsoft 365, which already includes a grammar engine. Other notable disruptors include Uber, Airbnb, Aldi, and Netflix. Disruptors aren’t new. Look at the history of McDonald’s as it created world domination for hamburgers, a sandwich once found only in local diners across the United States, creating fast food as a category.
Innovation and disruption get overused and overplayed. What most businesses want to do is continue to grow. That means creating a strategy that first doesn’t abandon profitable market segments through complacency and seeks adjacent markets where it can leverage its expertise, supply chain or distribution to grow. Serving those goals will likely call on disruptive technology and perturb some markets a bit.
For organizations attempting to disrupt at the level of an Apple, a Tesla, or a Netflix, you likely aren’t interested in Digital Transformation; you are probably laying the foundations for whatever replaces it.
Thinking of Digital Transformation as a project is another concept that Digital Transformation leaders often misconceive. In this 4-part series, I have attempted to be consistent with terminology, especially initiative and project. Those have special meanings in agile, and I take my queue from that methodology. But I’m not sure the initiative is even big enough. Digital Transformation never stops. Change never stops. It is unrelenting and unforgiving for those who let off the gas hoping that a momentary lull equates to stability.
I collect books, and I keep interesting artifacts from recent technology. Digital antiques like an iMac G4, a Britney Spears HitClip, a Timex smartwatch that synchronized from flashing lines on a CRT, and an early Apple Newton sit on shelves alongside books that cover old business models, and management fads like the One Minute Manager, Business Process Reengineering, and Total Quality Management that once dominated discussions in Harvard Business Review and now rarely appear even as footnotes.
Whatever you implement today will be replaced. You may even plan for a resilient design that evolves more fluidly than one requiring rip-and-replace. History, however, tells us that few technologies implemented today will remain top of mind in a decade unless they become so ingrained they prove impossible to replace. For example, at the start of the COVID pandemic, Cobol made a resurgence as old employment support systems failed under the onslaught of displaced workers.
Digital transformation is not a project; it is a career.
Underinvesting money or time
There are only two pools to draw from when executing a Digital Transformation initiative: money and time. Money can buy resources, from people to technology. It cannot buy more time. If something will positively absolutely take a certain amount of time, throwing more money at it won’t speed it up.
Time is also a crucial element of attention. You need to budget time to pay attention to people on the project, to customer reactions, and to measures of success. If you spend your time only doing things (being busy) and not examining if your work contributes value or how it affects people, processes or practices, then you may continue down an incorrect path. Success requires taking the time to pay attention.
Insufficient budgeting and planning
Digital Transformation requires significant investment. While every business will be different, likely, early budgets won’t reflect the final spend. Internal issues, more than external issues, may keep goals from arriving on time, but black swans like a pandemic shake up everything. Though I can’t give you a good number to write in a ledger, I recommend that you cost your backlog and do so with several people, including partners, to get a sense of what delivering on the vision will cost. Have them give you a range that includes the factors that will drive toward the higher end of the scale.
IT marketing that sucks
Digital transformation is not a battle against the business or its customers; it isn’t a fight to dredge through entrenched technology—Digital Transformation happens when an organization accepts a new vision, and new visions require marketing.
I point to IT’s marketing issues because most IT departments aren’t built for marketing. IT leaders may announce new apps, policies or services, share the names and backgrounds of new hires, or report on a conference—but they usually don’t implement branding programs to establish their credibility to deliver on a business vision. The business vision belongs to executives—to directors—to the board. IT has a role in implementing the vision, and it needs to learn how to sell the value of its role and the technologies, policies, and practices that will help the organization realize its vision.
With so many technological possibilities, a vision often acts as a filter, keeping people focused on what will be rather than what could be. IT and its partners need to successfully market their Digital Transformation vision or find the organization making up its own stories.
IT departments need to build up their marketing street cred and sell transformation visions, not technologies, not individual projects.
Underestimating the time it takes to change
Change, be it the abstract culture change, or a way to organize your workday, takes time. Ask anyone who has ever quit smoking or something even harder to stop. Incredibly, no one has yet developed interventions for messy desks, the inability to let go of e-mail, or posting slips of paper with passwords on displays under laptop pads.
Be clear: technology running in IT is not a Digital Transformation. Front-end technology serving customers without a clean adoption of supporting back-end is also not transformation.
A good vision will include waypoints. A good initiative will measure progress, including gauging the maturity of the organization’s attitudes toward the conceptual portions of the vision and adoption, not just deployment. The design of the measurement framework needs to reflect the effectiveness of changes, not just whether they occur or not.
Organizations successful at Digital Transformation may well find “patience” as a word that increasingly finds its way into job descriptions.
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