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Digital transformation – Are some people starting to get it?

How does the digital transformation of your organization go? According to the global study DIGITAL TRANSFORMATION: A ROADMAP FOR BILLION-DOLLAR ORGANIZATIONS from CapGemini just 50 of 157 executives say that they have an effective approach. Not an easy task it seems...

But why is this so hard? The report states that

Successful digital transformation comes not from implementing new technologies but from transforming your organization to take advantage of the possibilities that new technologies provide. Major digital transformation initiatives are centered on re-envisioning customer experience, operational processes and business models. Companies are changing how functions work, redefining how functions interact, and even evolving the boundaries of the firm.

I couldn't agree more. But isn't this difficult? Yes, really! What makes it even more difficult is further described in another conclusion:

Successful DT comes not from creating a new organization, but from reshaping the organization to take advantage of valuable existing strategic assets in new ways.

This means that in order to succeed you have to understand what your valuable existing strategic assets really are and transform your business to leverage them in a digital approach.

I think these statements are correct, are really important and points in the right direction. But judging from my 10+ year experience in working with intelligence, strategy and change in a global company, I see is that this is incredibly difficult to do in practice. Is it really so that as much as 1 in 3 are successful in this process? And to what extent are they successful?

From a historical perspective from other technology driven transformations, there are extremely few companies that have been successful in transforming themselves across societal and technological shifts. How many companies are e g older than 100 years? 100 years ago there was another, albeit a magnitude smaller, technological and societal shift that also required transformation and how many organizations survived that?

We must correlate these insight with other findings e g John Hagel's analysis of the performance of today's companies:

Firms in the Standard & Poor's 500 in 1937 had an average life expectancy of 75 years; a more recent analysis of the S&P 500 showed that the number had dropped to just 15 years.

I think it is time that people reread the former Shell executive Arie de Geus' book The Living Company, Clayton Christensen's The Innovator's Dilemma: The Revolutionary Book That Will Change the Way You Do Business and Alan Deutchman's Change or Die: The Three Keys to Change at Work and in Life.

In the end of the executive summary the CapGemini reports correctly states that:

Despite the hype around innovative digital technologies, most companies still have a long way to go in their digital transformation journeys. Leadership is essential. Whether using new or traditional technologies, the key to digital transformation is re-envisioning and driving change in how the company operates. That’s a management and people challenge, not just a technology one.

From my view from the outside I still wonder if change really is happening to the extent that people think it does. Because if it does it is against all historical odds. Or are we creating an illusion of change, when in fact organizations are failing more dramatically than ever?

The good thing with this report is that they are starting to formulating the difficulties in a much more realistic way than I have seen before from IT-consultants. And that is a good thing... If they show the correct picture of the reality, I am not at all sure.

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