Digital Confusion

This contribution has first appeared in the 25 years anniversary newsletter of the Project Consult some weeks ago.

Expected surprise

During my professional career I came across many new terms and buzzwords, sold by clever representatives of the huge consulting machineries. Most were short lived, some made it to the top of the charts for a decent period, few survived.

As we don’t yet experience the end of all times, there is no reason, why this continuous stream of verbal invention should finally run dry. So a few years ago the inevitable happened and first "digitisation" arrived, followed by "digital transformation".

Plenty of literature suddenly popped up, urging the frightened public, not to fall behind but in a way make use of these new imperatives and aggressively disrupt the market. No one however dared to do the hard dirty work of explaining what it means, how it differs from things done in the past and why it suddenly became important.

What the hell was going on here?

So eventually I went to an event where the agenda promised to provide some insight. Well, I was able to gain some understanding, however other than expected. Let me take just three random examples:

Customer orientation

“Forget about technology”, one speaker proclaimed in an emphatic provocative manner. “It’s all about serving the customer.” The latter certainly has never been more true. In fact it has been true all the time. And didn’t I ride that wave myself, some 25 years ago? An eternal truth can hardly be considered the new driving force.

But isn’t there indeed some new enabling technology at hand, making a further automation possible, which was hard to achieve before? Even if we leave leading edge technologies like deep learning, Internet of Things (IoT), autonomous robotics and the like aside, steady development gave us predictive analytics, in-process operational data warehouses, cheap sensors combined with big data technologies. Rigorously applied to even existing business models they may unfold dramatic effects already – well, and should be harnessed to serve good old customer orientation.

Salvation by superman

Another speaker outlined the characteristics of the fashionable new function of the CDO, The chief digital officer. After summing up all the desirable characteristics of this multifaceted personality he had described some kind of superhero not to be found among us mortal muggles – certainly not for the salary of a middle to upper management position.

For those, who are not familiar with tribal rites of large corporations, I like to explain a common habit. If new and challenging problems arise on corporate level, which could neither be ignored nor annihilated through a onetime bold & swift strike by top management, but needs long and tedious work on several levels of the hierarchy, we use to assign this task to a new responsibility. By this mechanism special corporate functions like e.g. the Quality Manager (although “quality is everybody’s job”), the Risk Manager (although conscious risk taking is the prime entrepreneurial task of top management) or finally the digital Officer was born.

This doesn’t mean that such new role is per se useless. If part of a corporate wide campaign he figuratively can be seen as the figurehead of the ongoing transformation coordinating the various activities and driving the transformation program forward. Backed by C-level power and support, even success can be achieved.

More often than not however, he just impersonates C-Levels excuse, its unwillingness to take serious steps but instead position a well-paid incarnation of false promises as a scapegoat on a prominent position.

The innovators dilemma

Permanently reinventing your business a third speaker vigorously demanded of those in power. Hey great, that’s the right spirit, exciting! But shortly review the typical behaviour of the C-suite members of the dinosaur corporations, the alpha males, those vain egomaniac rulers, who run their empires by fear. Will notorious creativity suppressors employ creative destruction to reinvent themselves? Will they start with a blank sheet of paper to escape the innovators dilemma? History however tells us otherwise.

As management Guru Gary Hamel once pointedly put it, implementing radical innovation in large corporation reminded him to “teaching dogs to stand on their hind legs. The moment you turn your back, the dog is on all fours again because it has quadruped DNA, not biped DNA.” Obviously it rarely works like that; rather the attackers come from below. Once they emerge from the dark as tiny flickering points on your radar screen it may probably be too late already. Then you are encircled already and may face a stiff uphill battle – just to be defeated. Not creative, but just plain destruction.

The fatal lapsus

In a weary moment I dared to ask a question: “How does this all differ from the past? Haven’t we done this all before already?” And then hell broke loose – I bitterly regretted outing myself being so naïve. I really shouldn’t have said that.

Magic transformation

And then it came: transformation, where suddenly all the magic happens. Here the usual suspects paraded before our inner eyes: AirBnB, Uber, Amazon … Impressive indeed. But didn’t these enterprises start new digital business models from scratch in a seemingly well settled industry sector, rather than re-inventing a traditional business, maybe even with material goods to be shippedat the end of the value chain?

And didn’t the elite of the top level advisors throughout all these years promise to transform your business in order to cope with current, past and future challenges? I remember my own exiting time at Nolan, Norton & Co., some 30 years ago, where we crafted elaborate processes for the transformation of businesses by the proper use of the then latest information technology. But, what a pity, we did not call it digital transformation. Otherwise, who knows, I could even claim copyright on the term 😥

Cargo cult

Well, eventually I had to understand that if digital transformation ought to be the Holy Grail of strategy, management, information technology … and of course, consulting, it simply must not be the same old story from 20 years ago, which we just cleverly or reluctantly managed to avoid in favour of the short term bottom line and with less headache involved. No CIO will stimulate enthusiasm by proclaiming that he plans to finally do his homework. The old smelly stuff has to be repackaged, rebranded, labelled new and – well – perfumed to overcome its musty odour. To make the task complete the new shiny gift is embedded into an aura of an all-disrupting next big thing, something like the “Great Leap Forward” (which by the way failed miserably). There is always the temptation to celebrate some cargo cult around new promising terms.

The book

Eventually I came across a preview of my old friend Wolfgang Keller’s and co-authors’s  Michael Kunz and Hermann Ladner brand new book, not surprisingly called “digital transformation”. As they are brave men, they took up the fight with the monster, trying to shed some light on his dark matter, bringing some order to the crude. Did they succeed? Hard to say. The rise of buzzwords is a collectively emerging phenomenon, best understood in the light of complexity theory – if at all. There is no owner, no author, no final senior authority to for all time settle the dispute.

Wolfgang and his co-authors at least approached the topic systematically, came up with some decent and plausible definitions and classifications and covered some related side topics like business models, ecosystems and the like.

Of course he too could not withstand to discuss one or the other posterchild of the scene like those mentioned above. It wouldn’t be Wolfgang however, if it didn’t reveal some interesting and maybe lesser known facts about those corporations. Regarding the assumed mission to create a positive attitude towards the topic, these examples rather backfired. Quite the opposite, I took it as discouraging for established players in traditional businesses.

So, not surprisingly, among the more interesting passages is his foray on technical debts as a very common barrier to any bold and swift strategic action, be it (digital) transformation, mergers or acquisitions. Here he touches an often neglected however nevertheless essential aspect of the discussion.

Besides that it is a nice book, conveying tons of information, worth reading, even if you were exposed to all that before.

The insight

As an essential takeaway of this intellectual ramble tacitly the conclusion matured in my mind about what digital transformation is in essence. Digital Transformation is first and foremost a transformation. It should be a bit more than just doing the anyway necessary homework, i.e. not piling up technical debts. It can even end up in re-inventing your whole business. Of course, as in any strategic change activity contemporary technology should be employed. The technology is constantly evolving, appears in new shape each year at an even accelerating pace. The transformation process hasn’t changed at all.

Aside

During a short coffee break, while attending the above mentioned event, I had a discussion with one of the attendees about my heretical contribution.

“You are right”, he said “It might not be all new. However what did not exist in the past is the new challenge by technology literate consumers. They demand business processes as seamless and easy as a post on Facebook. They don’t feel the least compassion with the obvious difficulties of the large market incumbents, to keep up with the pace of technology. 

If the user Experience does not live up to expectation set by the daily iPhone use, consumers will eventually abandon the whole product. 

The world became consumer driven. Agile consumers now chase the complacent corporate world – and some may go over the cliff soon.”

“This is what’s new.”

Thus he spoke – hmmm, food for thought.