What’s next for digital transformation?

Digital transformation isn’t new. Indeed, it has been on the CIO’s agenda for at least 35 years.

I assisted in designing and stage-managing my first symposium on digital transformation in 1987. The keynote speakers were the CEO at the emerging technology supplier and the Chairman/CEO at one of the world’s largest and most technologically sophisticated financial institutions.

The messages delivered from both the supply and demand sides of the tech industry back then were not terribly different from those currently pulsing through podcasts, webinars, zoom calls, and analyst whitepapers today.

This doesn’t mean there has been no progress.

Despite the term itself having been relegated to buzzword status, a result of decades of overuse and misuse, the fact is digital transformation is THE thing great CIOs do, every day.

6 truths about digital transformation

After over three decades of hard work, we’ve learned a lot about what digital transformation is and what it is not. Here’s a summary:

Digital transformation is not digitalization—digitalization is applying new technologies to existing business processes.

Digital transformation is not a strategy—a strategy has an end point, a set of tactics designed to achieve that end point, and a timeline.

Digital transformation is not a fixed duration project—digital transformation isn’t achieved in three months, six months or 18 months; it never ends.  

Digital transformation is hard—BCG data indicates that only about 30% of transformation initiatives succeed.

Digital transformation is important—indeed it is existential; the future is digital. As fellow futurist Gerd Leonhard pithily proclaims, “Real-life is out.”

Digital transformation is less about upgrading the at-scale technology stack and more about upgrading your strategic thinking.

IT strategy in the digital age

From a macro standpoint, everything that the internet did to the music industry is now happening to every other industry. The path forward begins with strategy and strategy begins with conversations—conversations with customers, employees, suppliers, and stakeholders.

We need to stop talking about digital transformation and start paying more attention to the conversations taking place throughout (and outside) the enterprise.

Dr. Karen Stephenson, one of the great seminal thinkers of this century advocates identifying, analyzing, and augmenting these conversations to create maps showing the “ropes” of the institution (i.e., how things really work), as compared to the org chart, which describes an institution’s “rules.”

Anthropologists and sociologists will tell you that humans pathologically sort themselves (and others) into categories. It is via conversations that such categorizations reveal themselves. Rendering these categorizations explicitly is the starting point of the path to the future.

4 steps for leading through transformation

Thirty-plus years of digital transformation has provided a rich data set of how workplace populations react to technology change. We know there is a digital ethnography of sorts. There are digital natives, workers who grew up with digital tools; digital immigrants, workers who are open to learning and changing; and digital refugees, workers who aggressively avoid digital tools. Each group needs tailored leadership.

Spend more time on strategy. A compendium of academic research regarding where work time is spent indicates that executives currently spend roughly one hour of every five on strategy. Executives need to spend more time on strategy. The Center for Management and Organization Effectiveness estimates that the average leader spends 25 minutes per day on strategy and planning.

Beware the compliance trap. In the U.S., roughly 12% of GDP is spent on regulatory compliance. Faced with massive uncertainties, many organizations have essentially given up on crafting strategy, deciding instead that regulatory compliance will be a surrogate for strategy. Does anyone really want to work in a company whose core skill is compliance?

Embrace uncertainty. Honest futurists will admit that modern forecasts are no more accurate than the auguries generated by ancient gizzard squeezers seeking to advise Roman generals when and where the Visigoths might attack. The future cannot be predicted, but it can be prepared for. It is possible to be on the right side of major trends.

The path forward requires setting in place processes for identifying early signals of change (some call this Pivot Hunting.) Upon recognizing inflection points, one needs to take advantage of them. The owner of a set of underground parking facilities in Paris, recognizing that parking spots were not required when workers were not commuting into work, pivoted and converted the lightless underground facilities into organic mushroom farms.

Tell a story. We live in a confusing world. Employees and customers need a personalized message explaining where you were, where you are now, and where you are going.