Digital Economy Dispatch #0655th December 2021

Why You Should Believe in a Digital Revolution

It is November 1977 and I’m staring out of my bedroom window. There was a commotion in the street. Outside the house I could hear the neighbours shouting. Raised voices and yelling were nothing new at that time in inner city Liverpool. By 15 years old I had seen plenty of shouting and swearing. But this sounded different. I raced outside to take a look. In the middle of the street was a big bonfire. George, one of my school mates from across the street, had piled up wood and cardboard he’d found down the back alley. It was now well ablaze and on top of it he was piling his complete record collection. Everything he had bought (or stolen!) in his teenage years. Dozens of vinyl LPs, hundreds of singles, and a large box of cassette tapes were being added to the flames.

“George! George! What the hell are you doing?”, I yelled.

“The old world is gone. None of it matters any more. Time to wake up and move on!”, he said.

Punk had arrived. The Sex Pistols had just released their album “Never Mind the Bollocks…Here’s the Sex Pistols”. And for inner city teenagers, nothing would be the same again. From that day on, the old George was gone, and he insisted we only ever called him “Spike”.

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I’ve been spending a lot of time lately with organizations discussing their digital strategies. While the circumstances vary significantly, I am frequently surprised to find how many senior leaders stumble at the first key hurdle: They fail to see how much the world is changing around them and the impact this will have on their organization. As a result, I see one of my main jobs is to create a sense of urgency.

To achieve this, I often start my conversations by declaring that we’re living through a digital revolution. Admittedly, a good part of the reason I say that is a provocative attempt to get people’s attention and to challenge them to ask, “Is this a digital revolution? What would be the consequences if we are living though a such significant shift?”. But, more importantly, I also start with this perspective because I think it may well be true.

Talking About a Revolution

Why is it appropriate to declare a digital revolution? I believe that there are at least three reasons.

First, if you’re going through something that you believe is a revolution, you are saying that the previous ways we looked at our world are no longer relevant. That is, the applicable models and frames of reference we created to help us understand the current environment and predict its future state may now no longer be appropriate. In fact, our observations would indicate that they are not only ineffective ways to describe what is happening, but they may also be dangerously misleading. For example, think about how your organization describes progress across your key projects, defines the learning and development of teams to ensure the right skills are available, and measures your personal performance. Are they fit-for-purpose in a digitally transformed world?

The challenge in a revolution is to try to work out why these existing approaches do not fit, to define more useful perspectives for learning about the elements that matter to us, and to understand what new kinds of ways of looking at the world are going to be more helpful to us.

Second, we see the tension increasing across the organization as its digital maturity evolves. The reason behind this is due to a growing gap between the advanced digital state-of-the-art seen in a few parts of the organization and the lagging digital state-of-the-practice found commonly elsewhere. In small pockets, most organizations are experimenting with digital-first practices, or switching completely to digital product and service delivery. Their experiences indicate that traditional organizational forms and management styles do not fare well. New kinds of organizational structures and operating practices are required.

The simplest approach is to encourage the organization to become polarized into “digital-first” and “digitally-supported” factions. Unfortunately, a side-effect is that the change of culture, skills, and physical environment that surrounds “digital-first” delivery squads results in them becoming islands of more mature digital experiences. Rather than instigate a broad and rapid adoption of digital practices across the whole organization, the opposite effect is experienced. A so-called “two speed” strategy emerges. Operating in this ambidextrous style can be complex and confusing to many employees. Tensions grow and demand for alternative operational models increases.

Third, rather than being able to point to a single cause-effect axis, we are witnessing what commentators such as Eric Brynjolfsson, Andrew McAfee, and Thomas Friedman describe as a confluence of new digital technologies that are pushing us beyond any single advance that we’ve seen over the last few years. Their combination is delivering new insights impossible in isolation, powering innovation across a wide variety of domains, and enabling a recalibration of societal values in determining the balance across the triple bottom line of profit, people, and planet.

Furthermore, this digital acceleration shows no sign of slowing down. The pace of change and its significance will only increase as we learn more about how to tie together technology advances in artificial intelligence, leverage the growth of computing power accessible in an elastic way through pervasive cloud infrastructure, broaden deployment of Augmented Reality (AR) and Virtual Reality (VR) to provide new world views, and much more.

In addition, the recent covid-driven adoption of digital technologies has highlighted the essential nature of these solutions to our way of life. The “great acceleration” in digital technology use has been recognized as fundamental to ensure resilience, continuity, and adaptability in coping with today’s volatility and disruption. The resulting operational practices are both driven by the digital technology and supported by them. Consequently, for all organizations, continuing investment in digital transformation is at the top of their priorities.

Why This Matters

Highlighting the nature of this digital revolution is not just a point of principle. It has important practical implications. We will never challenge our thinking if we believe that organizational fundamentals remain undisturbed by digital disruption. We will not change the way we work if we see our actions evaluated and rewarded according to outdated values. Whether you are a local authority dealing with adult social care, recycling, and potholes, or a financial services organisation offering payment services, transaction management, and insights into people’s financial health, the digital disruption we face requires not just digitization of existing operations but significant changes to how we deliver the outcomes now demanded by stakeholders with new ways to interact, rapid adaptation to emerging circumstances, and quality of services levels unimaginable just a few years ago.

And that, my friends, is a revolution.

Digital Economy Tidbits

2021 CIO Study: The CIO Revolution. Link.

A very useful summary of the digital transformation issues facing CIOs. A detailed survey and study carried out by IBM’s Institute for Business Value.

The pressure on technology leaders has never been more intense. Technology was already at the center of modern society, but in 2020, the pandemic thrust digital capabilities into the forefront. COVID-19 accelerated the adoption of new tools and practices in ways previously unanticipated but now accepted as the norm. For many individuals, organizations, and communities, technology was more than a solution. It was the lifeline by which they sustained themselves.

Rapid adaptation has continued to accelerate during 2021. A “Virtual Enterprise” model is emerging, fueled by a new post-digital approach to business opportunity. This model is based on the speed and scale of cloud technologies—notably the flexibility and interoperability of hybrid cloud, and the rapid results generated by combining artificial intelligence (AI) and automation. Together, these technologies create synergies and unlock new value streams that are orders of magnitude greater than what each can enable individually.

The Tesla Model Y Review. Link.

A very interesting review of the latest Tesla. With a shocking conclusion. This review reminds us of all the pros/cons of thinking of vehicles as software wrapped in a car….not the other way around….

The Model Y is a phenomenal achievement in many ways, a great blend of range and practicality and even performance mixed with a suite of unique features that are as useful as they are distinct. But, as it stands, you absolutely should not buy one. Let me elaborate on the why.