She’s smart. He’s funny. They’re the ambitious ones. That company is an innovator. This technology is a game-changer.
As humans, we love labels. Consciously and unconsciously, we slap them on everything – and with good reason. The average human brain must process over 34GB of information each day. There is no way to do that and maintain our sanity unless we organize all that information in some way. And sticking labels on things is how our brain copes.
As a cognitive system, it works. But only when the things that we’re sticking labels on fit into the world as we know it.
When things are in a rapid state of change, however, that same labeling process becomes problematic. When we attempt to label things that do not adhere to the existing frame of reference, those labels go from helpful to dangerous.
As the great American philosopher, Will Rogers, put it: “It isn’t what we don’t know that gives us trouble. It’s what we know that ain’t so.”
I’m probably biased, but I don’t think that any industry can beat the technology sector when it comes to our love of labels, buzzwords, and acronyms. With a constant stream of disruptive technologies, new approaches to applying those technologies, and the desire to sell those technologies to willing enterprise buyers, there is a never-ending opportunity to create new labels.
Industry analysts may be the greatest offenders. The large analyst firms seem to specialize in creating new categories, slicing existing categories into ever more narrow ones and continually redefining and repurposing old labels into shiny new ones.
Theoretically, this slice-and-dice approach to labeling market categories helps IT and business executives make sense of changing markets. But make no mistake about it – analysts do it for their firms’ convenience as they try to make sense of things, not because such labels accurately represent emerging markets.
In fact, the desire to put labels on everything and organize the rapidly changing technology industry during this time of constant disruption serves mostly to obfuscate rather than clarify.
We don’t fall into the labeling death spiral as our larger competitors do, because we spend most of our time speaking to leaders at technology vendors that are disrupting the market. The universal challenge we hear from these entrepreneurs is that their companies don’t fit neatly into any of the existing boxes that the industry uses to classify them.
Almost by definition, these companies transcend and span the labels that define the world as it was, because they represent the world that will be.
The Real World, Without Labels
The problem with all of this labeling is that it draws enterprise decision makers away from their real challenges – and negatively affects how they approach the entire process of digital transformation – which has unfortunately becoming a clichéd buzzword itself.
As digital transformation has become the trend du jour, executives’ focus has shifted away from the underlying business imperative. Rather than talking about the overarching business challenges, risks, and opportunities – specifically, how organizations can leverage technology and transformative processes to create competitive advantage – enterprise executives are instead reducing the conversation to the need to implement some specific technology. Fill in your label here.
It’s a classic case of the tail wagging the dog. The industry slaps labels on technologies, forcing technology companies to relentlessly conform to those boxes (lest they risk being ignored).
The industry then dutifully communicates to enterprise leaders that they need this technology that they have so neatly labeled for them. Enterprise leaders play their part and start thinking in these terms because, after all, they will eventually need to justify a future purchase. They know it’s safer to align those purchasing decisions to the analysts’ labels, regardless of how poorly they represent the reality of emerging, disruptive technologies.
Like a spaceship slowly spinning out of orbit, this process almost imperceptibly takes enterprise organizations away from the business focus they must maintain if they are to actually transform anything.
It seems harmless to evaluate a labeled class of technologies as a group to make sure that they make a good decision. After all, that’s how they have always made technology purchasing decisions. But those were different and simpler times when labels better served their purpose.
Killing Your Digital Transformation Effort by Labeling It
If you’re an enterprise leader, you’re stuck right smack in the middle of this mess.
Your organization must attempt to navigate the most tumultuous time of disruption since the dawn of the industrial era. Everything is changing or under threat of change: customer purchasing behavior and experience expectations, the competitive landscape, and even the definition of your products themselves.
At both the customer-facing edge as well as within the core of your business, technology is powering each of these transformations. As a result, a barrage of new technologies is bombarding you and competing for your attention.
It is therefore tempting and understandable that you would seek the shelter of labels and categories to make this process easier, but that’s the surest way to kill your transformational effort. Don’t fall into this trap.
Digital transformation success requires that you transform your very culture and the way you operate. It is not about adopting, implementing, or using any particular technologies.
In fact, the unique way in which your organization seamlessly melds your culture, processes, and technology to create differentiated value for your customers is the only true measure of success.
Labeling your technology decisions – or your transformational program itself, for that matter – will focus your attention in the wrong place and only serve to limit your organizational imagination and ambition.
You must instead create an indefatigable focus on creating sustainable competitive value by reimagining everything. Technology will be a key part of that process, but you will only find the technology path forward by ignoring the labels and making technology decisions only in the context of delivering transformative business value.
We have been beating this drum relentlessly. We have continually discussed the fact that digital transformation is a process and not a destination. We have talked about how the transition from the industrial era to the digital era represents something altogether different. We have done it over, and over, and over.
There’s a reason for this repetition: many people simply aren’t getting it.
Read the industry press or attend an industry conference and you will hear triumphant tales of digital transformation gone well. In many cases, the subject of the story deserves their accolades. They have moved the ball forward and have led their organization through the early stages of the transformational journey.
But that’s what you rarely hear – that their story is not complete and, in fact, has only just begun.
People tell transformational stories from this perspective because there is one more label that is more alluring than all the rest: Completed.
Labels are attractive because they allow us to categorize what needs to be done and to claim victory when we have done it. But as much as we might like it to be true, that’s not the way of digital transformation. Instead, skip the labels, focus on the process, and just enjoy this once-in-a-generation journey.
Founder & Institute Fellow
Charles Araujo is a technology analyst and internationally recognized authority on the Digital Enterprise and Leadership in the Digital Era who advises technology companies and enterprise leaders on how to navigate the transition from the Industrial Age to the Digital Era. Having spent over thirty years in the technology industry, he has been researching Digital Transformation long before it became the uber-buzzword of today, and is now focused on helping Digital Era Leaders prepare themselves and their organizations as the macro trends of the primacy of the customer and the primacy of the algorithm collide, ushering us into what he calls The New Human Age.
Principal Analyst with Intellyx, founder of The Institute for Digital Transformation, author of three books, and most recently the co-founder (with his wife) of The MAPS Institute, he is a sought-after keynote speaker and has been quoted or published in CIO, Time, InformationWeek, CIO Insight, NetworkWorld, Computerworld, USA Today, and Forbes.