Digital Transformation Is Hard and Existential
There is no large corporation on the planet which does not have digital transformation as one of the top three strategic priorities, and many have already deep-dived into it without necessarily understanding the meaning of success. Digital transformation is highly strategic, and many times existential due to the simple fact that technology changed everyone’s life forever and kept on doing that. A change that gave birth to a new breed of companies with technological DNA enabling them to create a superior substitute to the many services and products catered by the “old” world companies. Furthermore, these “new” companies catch up on customers’ changing preferences and adapt very efficiently. The agility of the new world puts a shining spotlight on the weaknesses and clumsiness of the incumbents; “Old” companies built with human processes as core DNA and far from even becoming a decent player in the new game. The obsoleteness of the incumbents is not apparent to the naked eye at first as large piles of cash are used to set up a theater play for posing as a new world company though the clock to their disappearance is not impressed by the show and continues ticking. Again, you see a huge investment and brainpower spent on “transforming” these companies, and I want to set some frame of thinking which can be useful to understand what does it mean to have a successful transformation.
When I think about companies, the metaphor of an organism always comes into my mind. Although it is not a perfect model for describing the whereabouts of a company in the long run, still the dynamics and actors at play are very much presenting an orchestrated long term behavior similar to the way organisms work. For example, I used the term DNA earlier to describe the core competence of a company, and it made a perfect sense. Another illustration of the difference between incumbents and upstarts is the amount of fat each group has, the ratio of muscles to fat and the type of muscles at play. In a world where running would be the essential criteria for survival, certain groups of muscles and capabilities matter the most. The magnitude of change by technology and mostly software is more about discussing a new specie and not a linear improvement in specific areas in a family of organisms.
Anyone that is overweight and nonathletic that needs to get on a strict diet and training routine; the change in life is dramatic. The path is like a roller coaster with many illusion and disillusion peeks and lows. Getting started is nearly impossible as the whole body is not ready for such a change. The urgency to lose weight and get in shape, where it is not just for the sake of aesthetics in the case of reviving company competitiveness, may lead someone to decide on an extreme diet – A start that usually ends with a shock, both to a body and to a company. As for the path itself, everyone is different and eventually need their own way to get there. A simple truth which is in contradiction to the consulting industry approach, which replicates formulas from one customer to another. And lastly, let’s say a company had a very successful transformation, and they are back in the game – the immediate questions that arise are: is it the same company at all? Do they serve the same customers with the same products and services? Which parts have died on the process, and what was born?
It seems that if a company is going through a successful transformation, it can not, by definition, work the same and provide the same output to the world. Successful transformation changes you profoundly, and this is a truth that has to be communicated internally and externally very clearly. Without it being openly out there, every participant in the process which is expected to play a role in the change, at a subconscious level, will oppose the idea of the change as it is an unknown existential threat. And eventually, they are right; this change can get some of them out of the game as part of a successful transformation.