Digital transformation has moved beyond a mere buzzword and is getting harder and harder to dismiss as just another fad. As it is becoming accepted as a business imperative, however, organizations are struggling to understand what it actually means to execute a digital transformation effort.
For most people, digital transformation is an abstract concept – an idealized rallying cry, but not much more. One purpose of Intellyx’s Agile Digital Transformation Roadmap is to represent what transformation actually looks like.
But as you can see when you download it, simple and linear it ain’t. So the question remains, how do you actually execute against this thing?
One of the reasons I was so excited to join Intellyx was because I share so many of the beliefs and approaches Jason Bloomberg has been espousing. Still, what fun would it be if we agreed on everything?
One of his points I take issue with (although I’m sure not the last) is this idea that digital transformation has no end (as he described most recently in the Cortex Digital Transformation: Moving Deck Chairs on the Titanic?).
I agree that far too many digital transformation efforts are of the “small,” finite variety that Jason describes, and that as a result they will dangerously leave their organizations no better off in the long run than when they started.
By the same token, however, I believe that it is equally as dangerous to attempt to execute a true, large transformational effort without an end-state goal.
Beware, however, of considering digital transformation to be an end unto itself. Simply stating that you are executing a digital transformation may now be sufficient to bolster your standing in the industry, with your peers and your board, to be sure – but the idea that “it’s the process that counts” will limit your ability to actually execute a meaningful business transformation.
The Goal of Transformation: Becoming a Digital Enterprise
The reason I believe digital transformation is not only more than a fad, but is actually a life-or-death imperative for every business and IT executive on the planet is simple: there will be no place for an “industrial enterprise” in a digital world.
Transformation, by definition, is a metamorphosis from one state to another, wholly new state. As such, a true digital transformation must be the act of transforming an industrial-era organization into something wholly different – the Digital Enterprise.
The problem is not the act of setting a goal, thereby establishing a digital transformation as a finite change. The problem with the small transformations that Jason describes are that they are not, in fact, transformative. They are driven by a change in state rather than in a change in fundamental capability and orientation – which Jason describes as making change a core competency in the organization.
This problem is akin to claiming that you’ve “transformed” your military bomber by adding new navigational instruments, versus undergoing a metamorphosis which changes that bomber into a fighter jet – something altogether different with a fundamentally different set of operating capabilities and attributes.
When a true transformation occurs, it becomes almost impossible to compare the new to the old. But that doesn’t mean there is no end state. While I do agree that one of the capabilities of the digital enterprise is its ability to remain in a constant state of change, it is still a capability that organizations must explicitly develop.
Designing for Digital: The Roadmap
Establishing a goal of becoming a Digital Enterprise and requiring that it develops a fundamentally different set of capabilities and orientations is critically important, because these steps lay the foundation for how to execute the transformational effort.
The Digital Enterprise is not simply an industrial-era organization with a new layer of technology laid on top of it, but enterprises generally don’t have the luxury of starting from scratch either. The reality of executing a transformation requires that the new emerges out of the old.
As a result, your team must come along for the ride, as they must transform their sure and steady bomber into a fast and agile fighter jet – while it’s in flight.
Having a goal as transformative as becoming a Digital Enterprise is both important and powerful, because it helps overcome the inevitable resistance to this audacious demand.
Yet, while it is true that defining capabilities of the digital enterprise include its agility and constant adaptability (and in that sense, the constant state of transformation that Jason describes), from a very human perspective the entire endeavor simply sounds overwhelming.
Dealing with the overwhelming nature of digital transformation is why it’s so critical to develop a compelling vision of the future that we can break down into digestible morsels. Those morsels may, in fact, be a set of small, finite transformations.
The trick is that we must design them to deliberately create an organization with the specific capabilities we require – to transform the bomber into the fighter jet.
Our Agile Digital Transformation Roadmap helps to map out these capabilities. It shows the transformation from an enterprise suffering under the burden of a siloed operating model and inflexible, legacy applications that poorly align with customer needs.
In its place: an enterprise in which horizontal self-organization is the predominant operating model, where the core principles of velocity and scale drive the business, and intelligent, on-demand software power its business processes – all aligning with the fundamental goal of meeting customer needs and desires.
The Three Dimensions of Transformation
To accomplish these audacious goals, business and IT executives must recognize that digital transformation occurs across three distinct, yet intertwined dimensions: organizational structure, technology, and culture. They must then create an environment which will allow the metamorphosis to occur.
One of the great misconceptions about digital transformation is that it is all about technology. Even when someone refutes that point and proclaims that their digital transformation is really a business transformation, they almost never describe any fundamental change to their business or operating model other than to the technology-centric processes that power it.
In contrast, true transformation into a Digital Enterprise occurs simultaneously across all three dimensions of the organizational model: organizational structure, technology, and culture.
Put another way, you must simultaneously transform the structural (the physical makeup of the plane), the mechanical (how everything is connected and operates together) and the mission (the shared vision of how to operate the plane and to what end).
This three-dimensional change, of course, is much harder than merely transforming any single dimension. It requires that no one part of the transformational process proceed faster than the other dimensions can support, which requires massive amounts of coordination and communication.
But can you imagine the transformation of a bomber into a fighter jet while in flight happening any other way?
The true danger of executing small, finite transformations outside the context of a grander, bolder, strategic transformational effort is having one dimension moving too far ahead of another. The end result: corporate inertia kicks in, and the elements of the organization left behind will claw the transformed dimension back into its “rightful place,” ensuring that no permanent business transformation ever occurs.
The Intellyx Take
Digital transformation represents a fundamental shift in how business is done and how technology is leveraged to create competitive advantage. However, such transformation is enormously difficult, and most organizations that believe that they have already transformed are almost certainly mistaken.
Digital transformation, after all, is not an end unto itself. It’s not a convenient way to get funding for a pet project, and it’s certainly not something to check off the list and then continue with business as usual.
The one and only purpose of a digital transformation effort is to change your organization into something fundamentally different: an organization that moves at velocity, scaling on-demand to meet the ever-changing needs of its customers.
Copyright © Intellyx LLC. Intellyx publishes the Agile Digital Transformation Roadmap poster, advises companies on their digital transformation initiatives, and helps vendors communicate their agility stories. As of the time of writing, none of the organizations mentioned in this article are Intellyx customers. Image credit: Milan Nykodym.
About the Author:
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.