Digital Transformation And New Technology Platforms
If you’re about to launch a digital transformation project you should probably read this. It may spare you a lot of pain
The marketplace gets more competitive, more global, everyday. It’s increasingly difficult to keep up with that raft of unlikely competitors that appear from the sidelines in an increasingly global market.
There is no doubt that your company needs to evolve to survive, let alone thrive. So, you’ve identified an enterprise software “solution” that will help your company keep up with the rapidly changing needs and expectations of increasingly sophisticated and vocal customers. The software sales team sold you a brighter, faster, more efficient vision. Lots of companies just like yours have already bought it. The impact, according to the software company, will be enormous. Convinced, you have invested a ton of effort persuading other board members that the cost of the license is justified. . . This platform will allow your company to spring into the 21st Century. . .
Sure, the last one you deployed wasn’t as impactful as expected. But this is different. This new improved version will provide the 360 integrated solution you need.
Or will it?
What happened last time? You may have done everything right. The platform was delivered on time and to budget. Tick. But stop or a second and think back. Even though the stats, information, communications pointed out the need for improved efficiency, your workforce resisted. A big percentage continued to work off- platform.
Frustrating. . . But don’t feel bad. You’re not alone. Depending on whose stats you’re looking at, anywhere between 60 and 75 percent of digital transformation projects fail to hit targets.
But why is embedding new technology platforms so difficult?
Because to adopt a new technology, people have to change their behaviours, and unfortunately people are hard-wired to resist change.
Let me outline an improved metaphor that might help you view your organisation through a different lens. . . and give you more chance of getting bang for your bucks.
Companies as machines
The operating model most companies still use was designed during the industrial revolution. Companies grew around new manufacturing methods, and were designed as machines. The mechanistic view of companies led to the widespread use of org charts (blueprints), departments (components) and job specs (functions). People were hired to keep machines running. Low skilled workers could be switched in and out like widgets.
Lets explore the machine metaphor and I’ll explain why it is no longer useful in the connected age.
Machines are controlled by operators. They are built to operate in a particular way and to deliver a specific product. Purpose is built into structure. Machines require regular maintenance. When they break they get fixed. Rigid engineered components fit together perfectly.
As needs change, machines become obsolete. The are replaced with new ones that can deliver better, faster, more efficiently in new environments. Machines are perfectly suited to stable environments.
An Unstable Market Environment
Today, the business landscape is anything but stable and the industrial age is long gone. Customer needs, wants and behaviours are changing at an unprecedented rate. In a search for simplicity and efficiency, companies have been organised as a collection of isolated parts. Separate departments specialise in people, communications, marketing, business, IT as if they are unrelated. One department is tasked with keeping costs down and maximising profitability while the others are left to clean up the resulting mess.
Adapting a “mechanical” company to an ever-shifting market requires constant and often concurrent change initiatives: reorganisation, reengineering, rebuilding, redesigning. The whole time these never ending projects are happening, the machine has to keep running. The faster the environment changes, the more challenging this constant retrofit becomes.
The truth is that companies are intricate, complex, vast organisms that rest on a fragile fabric of people, whose behaviours and decisions are driven by unconscious, and deeply irrational, cognitive biases. This endless uncoordinated tsunami of change makes people uneasy. We are not widgets. We cannot be switched in and out without the entire system being effected, nor does it make sense to assume we will comply with every new change that is launched upon us from on high.
We need to shift the way our companies operate if we are to survive in the digital age and that shift needs to be based on a deep understanding of complexity of the human psyche.
Companies as Living Organisms
A more useful metaphor for companies is organisation-as-animal. Animals are designed for survival and adaptation. To survive environmental shifts, organisms are able to flex and adapt. Each organism defines its own purpose.
To be able to adapt to its environment, an organism needs to be able to analyse the results of a new behaviour, learn from what works and what doesn’t. It needs a centralised memory and the ability to respond to coordinated memories. Survival depends on rapid reflexes triggered by threatening situations. Animals wouldn’t last very long if every decision, at every extremity, had to be routed through slow and complex decision-making processes. The brain needs to ability to relinquish command and control in favour of instinctive, fast response.
Learn And Act Fast
To thrive in the digital age, companies have to be flexible enough to adapt to the constant, accelerating shifting market needs and expectations. Successful companies are adaptive, they are on a journey of continuous learning and improvement. Learning is not a mechanical process; it is achieved through experimentation. Failure is a necessary part of learning. You can try to force behaviour change but that doesn’t work. It just leads to resentment and resistance. Lasting behaviour change is driven by nurturing conditions in which people feel trusted, connected, rewarded and recognised, empowered to make decisions.
The most successful companies don’t operate across disconnected silos. They have refocused from departmental navels to the collective finishing line. Employees are empowered and autonomous, teams are interdependent and self-directed, departments communicate seamlessly. Rather than working individually on problems, every part is incentivised to share knowledge and find solutions to complex challenges collaboratively.
In successful companies, progress is more important than process. Smart leaders relinquish command and control to allow direct and timely responses. Local outposts are empowered to react to situations as and when they happen, and incentivised to share learnings across the whole organisation.
Feedback mechanisms are crucial so everyone across the organisation can reflect on what is working, what needs tweaking, to make sure each part of the connected system is working in the best interest of the whole. It should come as no surprise that the companies that last longest operate more like organisms than machines. One thing’s for sure: in an increasingly turbulent environment, only the fittest and most agile will survive.
Animals Need Doctors, Not Mechanics
Machines are controlled by operators. They are fixed by mechanics who know exactly where each widget fits into the rigid blueprint. Too many C-level leaders still fall into this camp: the command and controllers. But agile digital organisations need doctors, rather than mechanics. Doctors learn to listen, they understand that the words only tell part of the story, and take into account the patient’s environmental and emotional context. Only when all of these things are fully understood will she diagnose and prescribe appropriate therapies. Once a therapy has been prescribed, the patient is called in for regular check ups. What’s working well? Is the prescription causing problems elsewhere. Is the dosage optimal? Has anything changed?
The best leaders zoom out to explore the complexity of the entire picture. They listen and respond to what is being said and try to understand the unspoken. They look at which areas will be affected before, during and after the deployment of a new technology platform. They uncover scarring from previous change initiatives, and interrogate data to fully understand the complexity of the challenge.
Only then does a good leader prescribe an effective strategy to ensure a project gets maximum traction. Once a solution has been applied, they interrogate data to continuously improve it, and keep a keen eye on any environmental shifts that might need a slight shift in the way a strategy is delivered.
Enterprise Software as Systemic Change
So here you are. . . About to launch a new enterprise platform across your organisation.
If we rethink company as organism, this is a bit like transplanting a venal system, a neural system. Think about it. Such a major systemic change would have complex and wide reaching impact across multiple organs and systems. A successful surgeon would work with a team of complementary experts to assess where the change would have biggest impact and design a holistic solution to mitigate against rejection across all of the affected points.
The same goes for global companies. By reframing how we see the complexities of our organisations, we can start to understand why new enterprise technologies, which are essentially foreign bodies, are resisted and fail to deliver ROI.
So. . . before you launch into your next digital transformation project. Zoom out. Look at the full picture. Remember technology is not a solution, it is only an enabler. Take time to listen and understand what matters to your people. Analyse the data and figure out how each node in your complex system will be impacted. Then, and only then, design a people centric strategy to support the technology roll out as integrated part of a holistic organisation redesign.