Photo by Christine Schmidt

Digital Transformation is not simply the addition of new technology to existing business and operating models. It goes deeper than that, with implications for all aspects of how we organise the value chain, including the internal structure of the organisation itself. But the question of how to manage and measure Digital Transformation is still something many are struggling with. This posts details our approach to establishing a Digital Transformation programme, and you can find more details of our service here.

As Russell Davies recently observed, just adding online engagement to a broken service can actually be worse than no social engagement at all, because it creates false expectations. Better to fix the service itself. Whilst the first wave of Digital Transformation began with online social engagement to fill gaps left by old-fashioned process-dominated operating models, the next wave is about deeper change to improve the services and products themselves and how the organisation is set up to deliver them, as recent research from Altimeter highlights. Analyst Ray Wang warns that this deeper, more thorough approach to Digital Transformation is fast becoming a case of “Digital Darwinism” – i.e. do or die.

In the old world, Digital Transformation would be a change programme, run from the centre with its own budget and KPIs, and various actions would be cascaded down across the organisation in the hope that some of it sticks. Perhaps there would even be an element of consultation, and even an attempt to analyse and understand the needs of “users” in the business. But that was before we were all connected to each other, and before our networks produced real-time data that can give us a better picture of the organisation. It was also a time when everything connected with technology and organisational change was big and expensive.

A visionary technology leader, perhaps a Chief Digital Officer or CIO, might have some good ideas about tools and technologies the organisation needs to embrace, but how can these decisions avoid the pitfalls of the big technology bets we have seen in years gone by, where a company drops a large proportion of its budget on a new ERP system, intranet or Enterprise Social Network in one go, without the business having much say in the matter?

A visionary CEO, perhaps intrigued by the increasing interest in new ways of working, might suggest implementing a new flat management structure, a no-manager system or perhaps a whole-system approach like Holacracy. Sometimes these big acts of faith can work brilliantly, but sometimes they can resemble the kind of big technology bet mentioned above. Buffer recently switched to a completely flat, self-management model to see if it would work with their culture. It didn’t – at least not entirely – and they were brave and honest enough to admit the error and shift to a more mixed approach they describe as “actualised hierarchy” (as distinct from traditional hierarchy). Sharing lessons and experiences like this is so valuable and important for others considering similar changes, so we are grateful to them for doing so, but not all organisations can afford to make such mistakes.

So how can we take a more iterative, evolving approach to technology, org design, new practices and other aspects of Digital Transformation, rather than proceed on the basis of acts of faith? As Tom Loosemore wrote when announcing his departure from the UK Government Digital Service, “transformed digital services require transformed digital institutions,” and that requires a long-term approach, not just the implementation of new features.

 

Re-imagining Programme Management

First, when considering how organisations change, just as with technology, there is no silver bullet – no perfect one-size-fits-all system that can be taken off the shelf and implemented successfully. The needs of each organisation, and the people that make it up, will be different.

Second, however well resourced a central team or Digital Transformation lead might be, they will still be unable to transform the organisation on their own. Their most important role is to influence and encourage change, not to own it. Rather than just a diagnostic approach, which assumes the central team perfectly understand the organisation’s needs and just need to design interventions to address them, this also requires a dialogic approach that leaves more room for practitioners to feed into the goals.

Third, not all change actions need to be big, shiny and new. There are plenty of tweaks and adjustments that can be made to current practice that can help create the space for new ways of working and more effective structures and practices. So we need to look beyond commissioning or creating new ideas or technologies and also consider how we embrace the day-to-day efforts of the whole workforce.

We need to think about how we can use the energy and direction of the central Digital Transformation lead as a force multiplier for change throughout the organisation. Gary Hamel wrote a good piece for McKinsey about this, which talked about the need for a change platform rather than a conventional change programme, but how do we put it into practice?

Here is our basic approach, refined over time from our work with both central transformation leads and the business units whose work is impacted by change. We support this structure with our own tools and platforms, but it can equally be implemented using your own enterprise collaboration platform and simple data tools.

  • Define the particular ‘recipe’ your organisation needs (e.g. startup growth planning, large org reform, M&A integration, move towards more agile operations).
  • Express goals in terms of target organisational capabilities – don’t just implement new features. We think of these goals as being like agile user stories for the organisation.
  • Create measures based on real-time data (e.g. social network analysis mapping) and human feedback from the organisation. See our Quantified Organisation methodology for more details.
  • Communicate why these capabilities matter, and invite people to review or suggest additional goals.
  • Recruit a network of change agents across the business who are already motivated to explore new ways of working, and provide them with the tools they need to spread the word throughout the organisation.
  • Organise an ice box / backlog of actions, across various key areas of activity to organise proposed changes such as:
    • Org models: a toolkit of new structures, techniques and new ways of working
    • Tech platforms: service-oriented approach for distributed work, sharing & connecting
    • Leadership: guidelines for the new world of work; cultivating new leaders
    • Culture & practice: a conversation with the organisation about suitable methods
    • Process improvement: identifying and fixing processes that block new ways of working
  • Encourage every team or department to undertake informal capability reviews as part of their regular meeting schedules (how are we doing on this capability? what next actions can improve it?).
  • Automate the reporting of capability improvement within a data dashboard the whole organisation can access.
  • Encourage each team to select next actions every week or month based on available time and resources.
  • Measure, review, reflect. Rinse and repeat.

The goal here is to make transformation an agile and ongoing process involving the whole organisation, rather than just the central team, and to run a coordination and influence programme that not only brings together centrally-owned actions, but also encourages other parts of the business to improve their ways of working and contribute to a shared vision for organisational change.

>You may also be interested to read our research report on The Barriers to Digital Transformation which includes our latest thinking on organisational structures and agile attributes.

Even if the centre has little or no budget for this, and has just appointed somebody to a new Digital Transformation role, this framework can give them the ability to act as a force multiplier and influence change throughout the organisation.

We are constantly looking at ways we can simplify this approach and put more and more control in the hands of internal change agents, which is why we recently launched our change agents’ community and knowledgebase Shift*Groups recently, so we would love to hear more about your experiences running programmes for Digital Transformation and/or organisational change in the wider sense.

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