Digital Economy Dispatch #061 -- Why Disciplined Change is Still at the Heart of Digital Transformation

Digital Economy Dispatch #0617th November 2021

Why Disciplined Change is Still at the Heart of Digital Transformation

I recently found myself sitting in my pyjamas on the sofa answering email and looking at my calendar for the next week. In what has become a normal working day for many people, I had completed my 20 metre commute from the kitchen to the living room and was settling back with tea and toast at the ready for a morning of online activity. To my shock and horror, I saw that the next week’s schedule included two face-to-face meetings. And what’s more, I would have to commute 2 hours on a train each way to get there. Some months ago, this was “business-as-usual”. Now, my immediate reaction was to ask: How can that be a good use of my time?

It’s interesting to see how quickly we have all become accustomed to new working patterns. Whether it is hybrid workplace schedules or walking your new your puppy every morning, at both an individual and an organizational level operational practices and the supporting infrastructure have shifted to adapt to our changing lifestyles. Our daily habits have adjusted to interact in new ways and a revised set of priorities now guide how we spend our time. For many people, it is impossible to imagine going back to pre-pandemic homelife and working practices.

It is curious then, that these experiences over the past few months are in stark contrast to the challenges organizations have traditionally faced introducing sustained changes to their ways of working to take advantage of digital technology. Surveys and reviews of barriers to digital transformation have highlighted how resistance to change is a major hurdle. In many situations, despite their aspirations to adopt digital technologies and adjust working practices to improve responsiveness to deliver greater value, organizations have struggled to go from early “quick wins” to more substantial sustained improvement across their teams. Yet here I am on the sofa in my pyjamas with laptop in hand. 

The Digital Change Paradox

While curious at first glance, there seem to be several ways to understand this paradox.

The first obvious comment is to recognize that we live in extraordinary times. Substantial change is often driven by one key factor: A compelling reason to act. Undoubtedly, the current pandemic has been a huge forcing function for change. A response has been essential. In well-accepted change models such as John Kotter’s 8-step leading change process, a clear focus for change activity is the initial step to create a sense of urgency.

In the current environment, the pandemic has forced a different perspective on the need to refocus efforts to adopt digital solutions already in place, to embrace additional digital technology deployment, and to transform operating approaches to be not just digitally-enabled but digital-first. The use of digital technology has been widely heralded as a cornerstone of our response and a substantial element of any post-pandemic recovery.

Support for this change has been an essential part of every organization’s reaction to the pandemic. Comments about the acceleration of digital technology adoption by Satcha Nadella and other industry experts are based on rapid acceptance of digital ways of working to support remote access to information, group collaboration, device monitoring, online commerce, and a great deal more. Without these, our ability to keep functioning would have been severely reduced. For example, a report from the European Intelligence Unit (EIU) found a strong correlation between digital maturity and an organization’s ability to weather the unprecedented disruption over the period of the pandemic.

A second observation concerns the technology-driven nature of many digital transformation initiatives. Experience indicates that managing change across an organization is critical for the success of its digital transformation. However, lessons from the agile software delivery domain have taught us that the focus is placed on the technology. Frequently, organization become overly obsessed with the new capabilities presented by digital technology and are carried away by the excitement of its use by a few experts in high performing teams. These early results are deceptive.

Too often we find that digital transformation programmes over emphasize technology acquisition and under emphasize the support required for broad adoption of new practices. To achieve sustained success, organizations need to have a disciplined approach to change, supported by innovation management practices that yield results, and grounded in techniques that address the most common failure points. Speed and flexibility of technology introduction without appropriate discipline leads to chaos.

Third, we may well be in an early “honeymoon period” for this current wave of digital delivery where the initial impact of digital technology deployment is obscuring longer term concerns. Providing digital support across the organization to aid business operations has required a great deal of effort. The immediate concerns facing organizations adjusting to the impact of the pandemic forced them into expensive and disruptive emergency initiatives. These have largely been successful in meeting the organization’s current needs. However, they have taken a high toll. In addition to the financial implications, there have been notable negative impacts on the stability and security of technology infrastructure, growing work backlogs, and increased levels of individual employee stress.

In fact, the near-term emergency actions essential to maintain business continuity may well be derailing more substantial in-flight digital transformation efforts. For example, a recent National Audit Office (NAO) review into IT spending in the UK’s HM Revenue and Customs (HMRC) concluded that its 10 year modernization plans are being delayed due to the need to deal with shorter term digital delivery obligations. One area highlighted by the NAO is the growing technical debt faced by HMRC as it has slowed down updates to aging systems. Pressure on IT teams has meant that previous plans to reduce this risk have had to be shelved. 

Elements of a Successful, Scalable, and Sustained Digital Change Process

Hence, success in digital transformation requires the right balance between seizing opportunities and applying discipline in managed change to align with the characteristics of the organization and its culture. A balance that is difficult to establish and harder to maintain. The experiences from many projects have highlighted that defining and executing a digital transformation strategy is neither straightforward nor without risk.

To mitigate this, many organizations take their first limited steps on this journey by adopting digital technologies for interacting with customers, engaging in pilot projects built with commercial or open technology stacks, and by updating parts of their back office with lighter weight technology infrastructure consumed as a service. Focused on technological shifts, these digitization efforts have yielded useful results, but they have had limited impact without significant attempts to manage the disruption they create to existing ways of working.

Through our experiences with organizations undergoing the trauma of digital transformation, we have found that the most successful, scalable, and sustained digital change processes adopt disciplined approaches in three areas:

• They encourage an innovation-focused mindset with support systems and mechanisms for accelerating the path from idea creation to action.

• They actively explore digital business model alternatives to experiment with new ways to create value, drive down costs, build partnerships, and respond to client-driven opportunities.

• They assist the organization and its people to become more adept at change by creating a culture where people feel motivated, engaged, and supported.

These areas of focus bring to the organization the agility and flexibility necessary to embrace digital transformation. Yet they surround the deployment of digital technology with the management structures and discipline essential to success in their use. 

Moving Forward

As organizations adopt digital technologies to improve their operating processes, they also look to make more fundamental changes across their business practices. Surrounded by the instability and uncertainty prevalent in many sectors of the digital economy, organizations are forced to accept that an ability to recognize and manage change is essential. By encouraging a more disciplined approach to digital transformation, they seek longer-term systemic change aimed at revolutionizing the organization’s structure, strategy, and execution.

Despite positive indications in recent months that digital transformation is accelerating, we need to be wary of short-term fixes. How change is managed across the organizing becomes a critical aspect in the success of any digital transformation. It requires careful attention to ensure the updates in technologies and working practices are not just appropriate for today’s extraordinary circumstances. Don’t be distracted. Disciplined change practices are essential to ensure your digital transformation is successful, scalable, and sustained.

Digital Economy Tidbits

The Lost Art of Data Modelling. Link.

Coming from a long tradition of data modelling, I have always worried that we have lost sight of some of the fundamental concepts that are essential to understanding and manipulating data. This short article takes an interesting perspective and captures many of my concerns quite well.

Data Modeling seems to have become a lost art amongst data engineers. What was once the primal part of the job of a data engineer seems to have been relegated to a secondary rank. Shaping the data by developing an understanding of the underlying data and the business process going along with it doesn’t seem nearly as important these days as the ability to move data around. In a large number of organizations, the role of a data engineer has been transformed from a data shaper to a data mover.

Gartner Top Strategic Technology Trends for 2022. Link.

Yup. Its getting to that time of year again. Mince pies are already in Sainsburys and Garter has published its top predictions for 2022.