If i had to sum-up in two sentences what I retain from the latest study conducted by the MIT Sloan Management Review in partnership with Deloitte and titled “Aligning the organization for its digital future“, I’d say :
• Good news : businesses understand that digital transformation is not about technology but transforming structure, business and operations through a cultural revolution.
• Bad news : not only businesses are still far from the goal but very few of them are providing themselves with the means to move forward.
No business ever transformed with technology. Technology is a transformation lever but is not transformative by itself. A first level of transformation is often required to make the most of the technology. It may sound obvious and be a basic, but experience shows that businesses usually overlook this need and choose the easy way before they take the problem by the right end after having lost a lot of time and spend money without any return meanwhile.
Digital transformation : tasks, structure, culture and human capital
On the the first lesson from the study is that digitally mature businesses follow this process :
It may look trivial but common sense is not what often prevails in most organizations and it took years for them understand that there are laws – such as gravity – no one can avoid.
Another interesting lesson is that there are not one hundred ways to achieve one’s digital transformation. While the authors of the study were expecting to find several cultural models they found that the process was the same everywhere. Digitally mature businesses all have a similar model, as well as those that are at the beginning of their journey. Each step on the road to digital maturity implies a specific cultural model, evidence that culture is what needs to be leveraged to move forward.
In short : don’t look for your roadmap anywhere else. It consists of aligning those 5 factors. That’s what the report calls “digital congruence”.
Bad news for the lazy ones or those who lack courage : technology is not a part of it.
Digital transformation is a vey long term project
Another lesson, more surprising, is that the most mature businesses have a very long term vision. Surprising because we’re told so often that long term is one year while digitally mature businesses think on a ten years range. That must be the effect of the learning curve but that shows how much work must be done and how urgent it is not to lose time at the start on along the journey.
As a matter of fact one of the dimensions of digital transformation that is highlighted by the study is talents. Businesses that achieve their digital transformation are those whose priority is to massively invest on people but we know that such investment need time to pay back (reason why many try to avoid it).
Digital is neither a department nor a discipline
Another major improvement in terms of maturity : in the most mature businesses, digital is not a department or a discipline by itself anymore but a cross-enterprise approach in charge of supporting strategy and business initiatives. Bad news is you were willing to appoint a “director of digital stuff”.
Moreover, digital leaders seldom are technology specialists but people with a business driven vision and, most of all, who excel at managing complexity and cultural change. You’ve been warned.
So it looks like good news : we can see that businesses that did the job properly have cleaned up the concept and really get what’s at stake. That said, is it the evidence of a global progress or just nice beautiful trees hiding a terrible forest ?
I won’t elaborate on the sens of urgency. The report says – but did we expect anything else – that businesses that don’t start their journey may be become marginalized soon because even if the road is long the gaps caused by a late start are more and more crippling.
Businesses under invest in talent development
75% of mature businesses provide their employees with the means to develop their digital acumen (vs 14% in less advanced organizations). 71% of the firsts say it it help them to be more appealing for new talents (vs 10% of the others).
No comment is needed : this gap speaks for itself. But I will elaborate on the “digital acumen” word that I find very sensemaking. Many businesses think about “training” their employees for digital while acumen means something totally different. It’s more empowering for employees and requires not only the acquisition of knowledge but of a new way to think, to reason, that go beyond what can be learn in a training. It also takes a lot of time because it changes people.
Even more worrying : 30% of senior leaders (top managers, directors) that are not given the means to develop in a digital environment are considering moving to another company.
Digital starts with culture
One more thing : 80% of mature businesses invest in risk taking, agility and collaboration vs. 14% for others. That’s, in my opinion, what causes a crippling gap between the ones and the others.
I hear this speech on culture in nearly every business but I seldom see it being translated into actions beyond incantations. “You must….”. I agree but how to make it happen in reality, how to make these new behaviors acceptable and then make them become the norm. Collaboration, agility and risk taking are often nothing more than values and their implementation limited to non-strategic operations and activities, locked into bubbles where people can work in “a new way”.
If it does not impact the entire organization in a very operational way, it will be hard to move forward.