Digital Economy Dispatch #122 -- The Digital Elephant in the Room

Digital Economy Dispatch #122 -- The Digital Elephant in the Room
12th March 2023

The UK government has made a good effort to refocus its digital transformation efforts recently, but still has many of the hard yards ahead of it to tackle the substantial challenges to reform government systems and operating approaches for the digital age. That is my summary from reading the latest report from the National Audit Office (NAO) entitled “Digital transformation in government: addressing the barriers to efficiency” published a few days ago.

Given the size and complexity of the UK government, perhaps this conclusion is no surprise to many of us working in digital transformation activities across different areas of the public and private sectors. However, in reviewing the report, its value many well be the examples and observations that bring a focus to an overriding question that must be addressed in all such digital transformation – how can we effectively deliver largescale change?

All Change Please!

Published as a follow up to the NAO’s earlier work on “The challenges in implementing digital change”, the 2 reports offer important insights into the struggles that all large established organizations (LEOs) must face as they reorient their processes, procedures, systems, and structures for today’s digital world.

Almost half a million people work in the UK Civil Service to support service delivery for the UK government. With a budget of £8B committed to digital reform in the 2021 spending review, they are involved in substantial efforts to adopt digital technologies and its ways of working to improve services, deliver better outcomes, and increase value for money. Much has been achieved over the past 30 years to introduce digital approaches. The latest NAO report reflects on these experiences and considers next steps.

Given the scale of the undertaking in digital reform, much of the report hones in on whether the investment is having the broad impacts required to revise operating practices across UK government and if the digital delivery activities are penetrating the large base of legacy systems and solutions in place. The report argues that previous government digital reforms have hit a roadblock:

“Government accepts that, although there have been some technological improvements, its previous attempts at large-scale digital change have had little success and is now trying to address the underlying problems.”

Similar to many largescale digital programmes, the UK government’s efforts are now fully focused on addressing the scale and depth of the adjustments that will be needed for widescale success. As seen in many public and private sector situations, the scale of digital transformation can be overwhelming. Delivery approaches must adjust to a variety of risks specific to each situation, and find ways to make progress when faced with legacy systems, entrenched existing ways of working, and impenetrable interconnected components that have evolved over many years.

Something that many organizations now recognize as the ”elephant in the room” for digital transformation. Best efforts at digital technology adoption can be derailed when attempting confront the levels of complexity, volatility, uncertainty, and ambiguity typical of many domains. The NAO report states the problem very clearly:

“We believe government does not yet fully understand the depth of change required for this.”

Three Visions for Digital Change

The problems of understanding and delivering change in large, complex organizations is nothing new. It is at the heart of many aspects of management. Some go as far as to say all management is change management. There is no doubt that for many organizations a large number of the procedures, practices, and systems in place are devoted to encouraging, supporting, controlling, or avoiding change.

But as in many cases, theory and practice in change management rarely align. Formal approaches to change management are all well and good. The reality is that motivating and driving sustained change in large organizations is often expensive and exhausting. While the impact of those efforts can be seen in the formal aspects of the business such as balance sheets and business plans. Just as importantly it is found in the informal effects on people, systems, processes, and partnerships. Meetings become more stressful. Tensions are raised in board discussions. Communications between teams diminish. Absenteeism and resignations start to climb.

To understand change and its impacts, it is helpful to maintain a strong vision for the way change is being addressed in any specific scenario. In my experiences, this helps to organize, orient, and focus efforts when guiding a significant shift in the organization. I have found 3 visions of digital change to be helpful. Each has the advantages, but also their limitations.

The Stepping Stones to Change

One approach is to view meaningful, substantial change programme as a set of stepping stones you must take to cross to the far side of the river. Each step builds momentum and demonstrates progress. Teams are organized and managed to ensure that they follow the prescribed path and receive the support they need at each stage.

Following a set of steps to change is best exemplified in John Kotter’s 8 step change model. This well known approach was first applied in the 1990s and has been frequently reused because of its programmatic view of change. From “creating a sense of urgency” thought to “institutionalizing the change”, the aim of Kotter’s 8 step process is to galvanize the organization to focus efforts and coordinate actions. It employs a small, powerful core group to initiate change and uses traditional hierarchical management structures to drive change across all levels.

This approach has benefits in more traditional, constrained environments where objectives and outcomes can be well defined and controlled. This is both its strength, and ultimately, its weakness. In more dynamic, less rigorous environments, change management in this form can be slow and ponderous. Updates to this model are possible, as seen in Kotter’s XLR8 approach in which he encourages concurrent and continuous activities across the 8 steps and a more flexible approach to driving change across teams. However, fundamentally this vision for change is aimed at environments where consistency, rigour, and alignment are key.

Shifting the Change Force Field

An alternative view of change is to see each change activity as a battle to be fought. One side is aiming to move the organization to a new outcome, while the other is attempting to resist. This requires a focus on appropriate tactics to ensure change is successful.

This is an approach defined by Kurt Lewin in his descriptions of how change happens. From his perspective as a psychologist, he viewed change as primarily an intellectual exercise to encourage “unfreezing-change-refreezing”. In effect, change is a struggle between two opposing forces. From his perspective, change takes place when these two forces collide: One is the disruptive push to make adjustments in response to the evolving context; The other is the inertia that wants to avoid updates in favour of stability.

Change happens only when equilibrium is disrupted. In the case of defined changes, it is therefore possible to describe these forces and begin to outline the battleplan for how to influence them to ensure you reach the outcome you require. It means that an organization needs to overcome the opposing forces by strengthening the driving forces.

It is a view of change that can be helpful when a collection of change goals can be defined and activities can be initiated to support each of them. By winning each of these individual battles, the organization can move forward with increased momentum. While this can be helpful to break down change scenarios into smaller increments, critics point to 2 main flaws in this “force-field” model. The first is the difficulty of reducing complex change scenarios into small, identifiable “battles”. In many situations it is impossible to create and maintain this list. Second, the approach often builds up hostilities within the organization between those seen as “pro-change” and those “anti-change”. This can cause numerous issues in managing across the teams.

Riding The Elephant of Change

A third vision of change is to recognize that changing a large, complex organization requires a mixture of skills, incentives, and actions to address concerns at many levels. The success of a change initiative is not about having well defined plans and sticking to them. It is being flexible in guiding the organization to keep moving despite uncertainties and ambiguities that it faces.

Based on the writing of Chip Heath in his book on change management, the image that best describes this is referred to as “the elephant and the rider”. He views change as analogous to someone attempting to guide the actions of a stubborn, slow-moving beast. By sitting on top of the elephant and convincing it to take the next step, the rider must not only make use of reason and rational argument, but must also motivate, incentivize, and cajole it to keep heading in the right direction. This image of “riding the elephant” is certainly one that chimes with many people’s practical experiences in leading organizational change initiatives.

It is important to highlight that Heath views change as a relationship between rational and emotional issues. He argues that many change efforts spend a lot of time in an analytical process to construct rational arguments for making a change. It may involve benchmarking activities, borrowing ideas from the best journals, observing other organizations seen to be effective, and so on. Yet, the reality is that organizations are unique, have distinct histories and cultures, and require motivation based on their own specific purpose, experiences, and impact.

From this perspective, it is the job of “the rider” to align these needs. They must address the emotional case for change, not just an analytical one. Leaders must work with those around them to move from generalities to specific areas where people feel they can make a difference. Steps he summarizes as “direct the rider”, “motivate the elephant” and “shape the path”. This makes sense from a strong design-thinking background as advocated by companies such as IDEO. However, as Heath admits, managing “the elephant” can be exceedingly difficult when these motivations are much more complex and nuanced, as found in many organizations.

Take a Ride

In reviewing digital strategies from many large, complex organizations, the ambitions and aspirations are often overwhelmed by “the elephant in the room” – we don’t see how to change our organization to get there from here. Digital change is disruptive and difficult. To make progress, it is useful to consider 3 alternative visions for digital change: Taking the stepping stones, shifting the force field, and riding the elephant. Each may have value in guiding your organization on its digital journey.