There are, in my view, two things that are a prerequisite to a successful digital transformation : a sense of urgency and the clear and non-ambiguous involvement of the C-Suite. Without these two elements, nothing is going to happen. Budget comes after. As a matter of fact even if you have millions to spent, if not one gets the urgency and/or if leaders don’t show the way in an explicit and exemplary way nothing will happen.
I’ve made a similar analysis regarding to enterprise social networks and the model applies here too with a slight difference. Here the scope is wider since it encompasses things like business models and customer relationship and it’s easier to perceive the urgency when it comes from competitors than when it’s internal. As a matter of fact it’s often the urgency caused by the external environment that leads to internal urgency.
Urgency is easier to perceive when it comes from outside
When one only looks at himself, it’s harder to be aware of the needed change than when one compares to competitors and draws the right consequences. It will be easier to work in a new way when new business models willÂ require new product, services and experiences that will need new production processes and ways to work.
Of course it’s possible for an internal sense of urgency to emerge because of the competition between departments or business units but it’s less likely to happen.
Recently, a quite brilliant person told me “there’s no urgency in our industry so it’s hard to set the company in motion”. In fact, what he meant is that urgency was poorly perceived and shared. As a matter of fact he continued : “when the CEO says we have 10 years to achieve our digital transformation and considering the money we make, how to you want people to mobilize ? According to our size and leadership on the market, employees expect us to pass any obstacle without effort”. However newcomers are disrupting this market every day and even if barriers to entry are huge and the sector very regulated, that’s only a matter of time before the storm sweeps anything in its path if no one is prepared. This person was aware of that but the sense was too weak and diffuse in the company.
Urgency is a change management tool
This is what made me think about the characteristics of an urgency that would drive a collective into a transformation process. Urgency is more than an external disturbing element, it’s also a change management tool.
As a matter of fact it makes change mandatory, establishes a cause everyone will mobilize for and legitimizes the company’s and leader’s words and plans.
Urgency must be actual, perceived and shared
First of all, urgency must be actual. Is it for any industry ? I think so. Look at the press, taxis, retail, car makers and hotels. In these cases the disruption mainly comes from the market and the emergence of new competitors that compete either frontally or by addressing customer needs in a brand new way.
What’s about heavy industry ? In this case the disruption is more technology-based (in my opinion). It’s about improving the production tool and the product. While the first sectors I mentioned will focus on the offer and the market first, these sectors will focus on data and embedded intelligence. For example it’s obvious that connected objects will play a major role in both the products and the production tool and that data are a major factor of disruption (new services, predictive maintenance…).
The main difference between market and technology driven disruptions is that one impacts the industry, the other the product. In the first case the risk is the extinction of an industry and all its businesses, in the second it’s the progressive loss of competitive advantage. It leads to extinction too but it takes much more time. Of course it’s a simplified view of a much more complex matter : any business is impacted by the two kinds of disruption but one is more impactful than the other.
It’s easier to perceive the urgency in the first case than in the second because it’s visible by anybody, even outsiders. What leads to the second point.
Disruption is here for anyone but is not equally perceived
To used urgency as a change management tool, it must be perceived. What is not always the case.
When it comes from the market of is about services, disruption is seen by anyone. Leaders, customers, employees. The media talk about it, employees fear for their future, their obsolescence and their company’s.
When it’s about technology, it’s visible by experts in the first place. It takes time to employees to be aware of what’s happening, so it his for customers and the general public. It happens at businesses where innovation is a strategic matter and is owned by experts. It’s their job to deal with such issues and the whole company relies on them. There are sectors where urgency is a more long-term concept…so less urgent.
There are also intermediate solutions. In very regulated industries or when the barrier to entry is high, businesses often think that their current leadership protects them as patents or major innovations would. That’s the case in the banking and insurance business where we’ve seen the same behaviors as in the heavy industry while the sector is much more likely to be disrupted.
When only the C-Suite and experts see the urgency it’s not enough to mobilize the entire company. Urgency needs to be shared.
Urgency is not always shared
So it’s important to communicate and share the sense of urgency. When urgency is perceivable by anyone it’s easy. In the case the role of leaders is to acknowledge and move to the next step : show they have a vision and know where they’re driving the business to. That’s not the easiest part of the job but it’s another matter.
When urgency is only perceived at the highest level, employees awareness must be raised in an educational way before talking of change and transformation. Change without a shared urgency leads to antagonisms, with a shared urgency it creates fears but also appears as the only way to pull through. It’s up to communication people and leaders to manage fears to build a positive consensus. But saying “it’s ok, we’re making money, we have time to transform” is not a good way to get change done.
Of course it’s a scary situation for leaders : no one likes to share bad news that, even unavoidable, are not visible by employees at this stage. They hope the solution will come by itself, that they won’t be in charge when the worse will happen and, anyway, don’t want to scare people. But avoiding the point and not making the slow educational job when it’s possible only leads to having to do crisis communication when time lacks.
Last case : when urgency is visible by employees and not by leaders. Yes it happens. I’m not dealing with this case here, I think you know where it leads.
Anyway, there is no way to set a company in collective motion without a collectively shared urgency.