Digital transformation is more than just a technology initiative. It means ensuring our organisations are ready for the challenges and opportunities of digitisation in terms of products and services, but also the organisation that produces them and the business models it operates. It impacts structures, culture, practices, and leadership, which means it is as much about people as it is about technology.
Given so many organisations are connected only vertically, at the top, rather than laterally, some initiatives fall back into the old model of top-down change management, which no longer works in a complex world. Instead, as we have written before, organisational improvement and maintenance needs to be an ongoing priority at every level – we need to make change routine. It is imperative to involve the wider organisation in the discussion about the ‘why’ and the ‘what’ of digital transformation, and also to get people involved in the ‘how’ rather than leave it to a single function that is the designated ‘owner’ of digital.
Over the past few years, we have used an agile, distributed approach with our clients, in which people at all levels of the organisation play a role in defining and enacting change. Along the way, we seek to apply the best elements of new thinking about the coordination of work — such as the study of swarm intelligence, which describes the collective behaviour of decentralised, self-organising groups (e.g. schools of fish, flocks of birds, and, as it turns out, humans in social or business groups).
Reflecting on the work we have done with clients from small professional services firms through to huge industrial groups, there are four foundational actions that we think underpin successful transformation initiatives:
- Health: Track organisational health through data and human feedback to steer digital transformation
- Goals: Align digital strategy around the new business capabilities needed to meet the challenges of a digital world
- Guides: Mobilise digital leaders to involve the whole firm in change and to spread new ways of working
- Skills: Provide a digital hub where people can learn the skills and develop the attributes that the future firm needs
Health: Track Your Quantified Organisation
In any business improvement or transformation effort, it makes sense to start with a baseline of how well your organisation’s structures and practices are working today and where changes are needed to become more adaptive. This helps you define the target operating model that steers your change actions.
While there is no “off-the-shelf” approach — your implementation must be tuned to your particular challenges, goals, and culture — there are still common attributes of adaptability. We have derived twenty across structure, practice, culture, and leadership, based upon our client work, as well as executive interviews and academic research.
Due to the pace of digital change, a higher frequency of measurement – faster, more pulse-like – is just as important as the measures themselves. When we want to improve our personal health, we often look to data and devices to help turn regular, small changes into big outcomes.
This feedback approach is the basis of the Quantified Self movement. We need a similar approach to organisational change, which we refer to as the Quantified Organisation.
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As more internal data feeds become available within your organisation, measuring organisational health will become a core feature of management. Social platforms not only provide a wealth of useful data that you can use for diagnostic purposes, but they also function as what Dave Snowden and others describe as a ‘human sensor network.’
Here, we see the power of swarm intelligence. A shoal of golden shiner fish sense and respond to light in water, detecting patterns as a group that are not evident to any individual fish on its own. In the same way, employees can collectively provide the most accurate feedback on organisational health, by each responding to the state of structures, processes, culture, and networks around them.
Goals: Align Digital Strategy To Develop New Capabilities
A distributed, agile transformation approach, by its very nature, puts ownership in the hands of individuals and managers who want to improve their area of the business. While the effect is empowering, the biggest danger is lack of alignment as various parts of the business move at their own pace to achieve their own goals.
Once we have a sense of the challenges and opportunities that lie ahead for the organisation, the next step is to ask what capabilities the organisation needs to respond to them. If you ask this question across different parts of the business, and at different levels of scale, you will surface useful capability goals as well as some ideas about how to pursue them. Some new capabilities might require the acquisition of a startup to bring in talent or technology you don’t have in-house, some might require a project to restructure part of the business, but most will be much simpler, involving the use of new digital tools, or perhaps just a tweak to decision-making or management techniques at the team level.
By pulling these capability goals together in a clear framework, using a common language that expresses digital transformation goals in terms of what they do for the business, you have a clear business roadmap for digital strategy and a distributed set of potential actions to be prioritised. You can then group actions together at different levels of scale (e.g. global, divisional, departmental, team level) and distribute ownership accordingly, to be run as an agile programme of activities, rather than a traditional top-down initiative.
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Guides: Mobilise Your Digital Guides
Any team involved in Digital Transformation will achieve more through networks of influence than it can through owned or managed projects. Partly, it’s just a matter of scale – there is just not enough of the central team to go around. But mostly, it’s a matter of psychology. People trust change when they are part of it, and it makes sense to them, rather than have change done to them.
A key feature of any distributed transformation is a network of digitally-confident employees who are passionate about new ways of working. Some firms call these Digital Guides, while others use terms like Change Agents or emerging Digital Leaders.
Digital guides can act as your eyes and ears throughout the organisation, spotting opportunities for solving problems using new ways of working. They can also help carry the message of change (both the ‘why’ and the ‘what’), and act as voluntary mentors or helpers for teams and leaders. Spontaneous and emergent leadership can drive and align the behaviours of a group better than a mandate from above. A strong network of people committed to business improvement is always more effective than top-down, communication-led change programmes.
This approach has been very successful in some large, traditional firms that acknowledge the need to change, and there is plenty of evidence that it is perhaps the most important accelerant for digital transformation.
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Skills: Create a Digital Hub for Learning and Sharing
Our recent interviews with senior digital and HR executives revealed that organisations currently have digital skills gaps that are holding back change. It is vital to communicate clearly what digital transformation means for everybody and give people an opportunity to learn these skills.
When an organisation starts talking about digital transformation and the need to change, it is vital that they communicate their own clear vision of what this means for their employees, and provides an opportunity for them to engage with the topic and learn more. Too often, leadership announce what seem like ambitious or visionary goals for change, but without the detail needed to create alignment on what it really means. This can lead to confusion and even fear (“is my job at risk?”), but when people are given the opportunity to learn and discuss, there is greater clarity and confidence to move forward.
We have an extensive knowledgebase of guides to what transformation means for different functions and roles, plus articles about how others have addressed similar challenges, summaries of relevant literature, plus courses and other learning content. Making this available in context and within an organisation’s own internal systems is a very practical way to get everybody started on the journey towards new and better ways of working, and can create a win-win between personal development and the culture change needed to make change work.
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What this means for our work
These foundational elements have always underpinned our client engagements, but we can now go further — using them as the structural elements for practical tools, frameworks, and insights that help digital leaders and change agents to de-mystify complex transformations. Our goal is to increase the success rate by enabling an agile, distributed approach that is an alternative to both top-down change management and technology-driven tactical interventions. Our hope is that this approach can provide the structure and measurement that boards and executive leadership require, while allowing the entire organisation to help define its future.
If you think one or more of these can help you with your digital transformation journey, please contact us to discuss.