Last update: 13/07/2016 10:25

Digital Transformation

Every business that I see says it has started its Digital Transformation. What the heck is that, Digital Transformation?

According to Box, Digital Transformation is all about "embracing new ways of working and putting the customer at the centre of your business" (sponsored content). Really? Is that it or is this only a part of the picture? If I agree on the content presented in this article, I have a slightly different view on the combination of the factors at play. Let's see this briefly.

It is not that I think that refocusing on the real benefits of the customer is wrong, that would be folly, nor that new ways of working is not profitable (or essential) for all dudes. It is more that I think that the Digital Transformation has become another one of these meaningless buzzwords that have invaded the world of business and that Management is completely lost in front of the changes that are needed and that take the world by storm when they keep acting as pure command-and-control structures.

The Digital Transformation is more about understanding that software is eating the world quickly and, companies, if they want to survive, need to adapt to this reality. Accounting Bureaus, in their usual way of working, are no longer needed: software can do most of their work, and better. Taxi drivers are under the pressure of models like Uber. Automatic mowers replace gardeners. Translators are replaced by Automatic Translation Machines. Software robots write specialized articles for newspapers without humans noticing the difference. Many mortgages are no longer offered by banks: they're offered by IT startups that have found new ways to avert risk. Surgeons and doctors are helped by software capable to cross-check limitless data to provide detailed analysis and diagnosis in a much more accurate form than humans. Six-wheeled robots deliver groceries from supermarkets. Regular Parking ticket machines are outdated and can be replaced by automatic detection and automatic payment systems (and … automatic fine machines). Companies not offering AAA services (Anything, Anytime, Anywhere) are considered dinosaurs doomed to extinction. Companies not complementing their services with what their customer basis expects as simply normal are challenged in everything they do and if competitors appear that change the game they quickly disrupt the sector. Etc. Etc. This is the true sense of Digital Transformation. For a bank for example, it is essential to understand that it has become an IT Company; it must reinvent itself in the light of the current and moving state of technology, it must understand that it no longer attracts the best engineers, and that if customers had a true open market in banking, they would definitely go somewhere else (to go somewhere else is useless when all places offer the same undifferentiated services). What is true for banks is true for many other sectors of the economy, more and more, quicker and quicker.

Simultaneously, people who are capable to create the software companies desperately need — the good programmers, often young, the knowledge workers — do not want to work as most companies are organized today: they require new ways of working and want to have their say in the way their own work is organized. It goes far beyond the standard working hours, or having a daily standup every morning, possibly a sprint planning or a retrospective, funny couches or hammocks in a corner, etc. Actually, these developers don't get why it takes 10 minutes to have their own personal blog online in the cloud at 11pm whereas it takes weeks in the company they work for. They don't understand why it takes them half a day to buy and set up a brand new machine whereas it takes weeks and tons of red-tape to have it up and running at the place they work. They simply can't understand why it requires so many meetings with so many fake stakeholders to take a decision that impacts THEIR work for a simple tool, or a USB connection, or … They can't figure out why it takes them literally seconds to get a new database in the cloud whereas it takes weeks or even months from their cubicle at work. They do not accept the difference companies make between internals and externals (for example a difference in the price meals are offered at the dining hall, a difference in the number of working hours, a difference in the way remote work is applied, or simply a difference in the way remote connections are offered, …). They do not accept that backend systems get shielded the way they are, that nobody imposes some (basic) rewriting of such outdated software whereas they themselves must offer the best of what technology is capable of (and remember that organizations which design systems are constrained to produce designs which are copies of the communication structures of these organizations). They do not want to work FOR the Business: they want to work WITH the Business! They do not accept having no influence on the requirements of the software they must build and do not accept that the old-fashioned steerco meeting will tell them WHAT they must build and HOW it must be built (Imposing process drives away talentAdrian Cockcroft). And above all, they want purposeful jobs, they require MAP: Mastery, Autonomy and Purpose (Dan Pink). If their employer cannot satisfy them, here's exactly what they think: "Write it yourself stupid!", and this is not the reaction of only Millennials, people born who cannot even imagine the world in which their grandparents lived and into which their own parents were bornPeter Drucker in Post-Capitalist Society, 1993, ISBN 978-0-06-198596-6.

If companies are reluctant or even simply slow to adapt to this new paradigm, their verdict is immediate: such knowledge workers leave (knowledge workers own their knowledge and can take it with them wherever they goDrucker) with an ugly opinion which they communicate swiftly to friends and followers on the many social media they're active on, no matter how big the company they leave is, whatever its name. The word is quickly spread to hundreds or thousands of their peers who can/will relay the message and … too bad for you! Their speed largely surpasses the speed at which their companies operate, which is not the least of the challenges companies wanting a true Digital Transformation must face.

Again simultaneously and fully independently, customers want to be considered as the true treasure of any company. All companies of all sorts have understood it, which they used lavishly in all contexts. This "customer-centric" mantra I have heard for ages and yet haven't got the occasion to work for many companies that truly respect their most valuable asset (except for Nantucket and Viveo Cognitive Systems). Actually, my experience is that the more a company announces such a commitment towards customers the less it truly listens to them. Again, this has become a meaningless buzzword full of emptiness. Words may count but actions are the true measure. Companies must have a consistent communication in full sync with what the market can perceive.

This trilogy, all wrapped up in speed, is what crystallizes a divide as coined by Drucker, here the divide of Digital Transformation: (1) digitalization changes the nature of the services that are offered (software eats the world) (2) knowledge workers know they know better than most of their managers (which is often the case in companies whose managers haven't become knowledge executives yet – [1] ) and (3) customers want to be at the center of the preoccupation of the companies. Wherever we see this triangle forming, we see the "divide" of Digital Transformation forming. This is even aggravated when the legacy systems of the "mastodons" are no longer under control: when no one dares to touch it, when it is left undocumented, … Any Digital Transformation must embrace this triptych.

Footnotes

[1]The first obvious thing that erodes #trust – a leader who doesn’t know what [he is] talking about

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