Digital Myopia: Shift does not Happen.

I know the word “digital” gets thrown around these days as it means nothing, and I am not exaggerating writing that. Yet, I have not found a way around it. So, bear with me.

Amara's Law states that we tend to overestimate the impact of new technology in the short term and underestimate its effect in the long term. The non-millennials amongst us remember how the internet came into reality. Exuberant optimism whipped technology companies, VCs, start-ups, and the stock market into a frenzy. Wannabe investors and B-grade entrepreneurs were convinced they were uber-genius. And as usual with brash parties, the back-to-reality hangover hit hard. The shift from short-term hype to long-term reality was dreadful and sobering. Stocks sunk, fortunes were lost, companies folded, and many websites died. A full-blown recession ensued.

We know this was not the end of the story.

The internet evolved into a torrent of accelerating change, unpredictability, and surprise. In that evolution, “digital” became synonymous with a phase transition, like water turning into steam. At the tipping point, the structural changes happening were vast and almost instant. But while the subject of phase transition is titillating to physicists, its equivalent in business evokes debilitating dread.

The sucking sound of surrounding transformation evokes anxiety, siphoning the comfort of business-as-usual down the drain. This may be why so many corporate blogs on digital transformation read as a disguised Hail Mary. A telecom operator is waxing lyrically about their recently launched instant messenger, the white goods manufacturer installing a camera inside fridges to update shopping lists, and the fast-food chain launching Instagram campaigns. I remember the advertising executive rolling her eyes about the tobacco client considering VR game development to entice millennials to vape.

That is not “digital transformation”.

Many of these companies are the equivalent of grown-ups living at home with their parents because they have no clue how to monetize digitalization. They are working hard to convince themselves rather than anyone else. On the other hand, those that get transformation do not toot their horn. They keep things to themselves as they are too busy figuring out innovation, redefining their industry space, and how to move on. Their stories are written years later by management consultancies, who, like bees pollinating flowers, turn those successes into a handy template for clients to emulate.

What can be understood as “digital”?

Digital has so many motley connotations it became fiendishly difficult to summarize its meaning into a single sentence. It’s like untying a bowl of spaghetti. And as I stated already, “digital” became conversational confetti thrown around liberally, not contributing anything substantial. Today it is nothing but a faddish word wart. But we can agree on one thing. The common theme across a decade of books, forums, blog posts, and consultancy speak on IT, entrepreneurship, and transformation is how fast “digital” injects change in the lives of everyone.

Accelerating change is the constant.

Digital transformation is how traditional companies adapt to bewildering changes in customer behavior, shape-shifting competitive landscapes, and a heterogeneous talent universe. To cope with all those change vectors at once is hard and, for many, near impossible.

?危机 ?Wéijī

The Chinese two-character word 危机 for crisis supposedly represents the graphs representing danger and opportunity. It was a new-age business meme for a while, appearing on slides of consultancies high on buzz and low on vision. But the meme is wrong and misleading. A crisis in Chinese is also a crisis in English. Because when your roof is on fire you do not pause and meditate on the potential benefits of the situation. Instead of opportunity, the second Chinese character graph 机 or Ji means critical or critical point.

Which leads me to the “point” I want to get across. That point is a breakdown, or in other words, the truism of disruption. It is the moment when the light at the end of the tunnel is the freight train coming your way. It is the monster under the executive bed. It is the mirror that reveals you as your own worst enemy. It is the moment of the existential reality test forcing reflection on your business purpose.

Posthumous Intel CEO Andy Grove, who had his fair share of experience with the matter, wrote a bestseller about it. He called that reality test an inflection point. A strategic inflection point is a time in the life of a business when its fundamentals are about to be shaken to the core. His advice in dealing with it? Be paranoid.

How such a mind switch happens is through a gestalt switch.

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The peculiar thing about the gestalt switch is that logic and reasoning won’t do. It takes time to get your head around it. It’s the switch triggering a circuitry in that part of the brain processing the stuff of digestion, hair growth, sleep, and a bevy of other low-level physiological necessities you never need to think about. They happen. The switch demonstrates how much of our perception is theory-laden, self-selective, outside reason, and societal. Many, if not most, advances in science, medicine, and technology “happened” similarly. They lack a rational ground and evolve through gestalt switches or, on a collective level, borrowing from Thomas Kuhn , through paradigm switches.

The Hungarian doctor Ignaz Semmelweis discovered in 1847 that handwashing in a chlorine solution dramatically lowered fatal childbed fever. He was affectionally called “the savior of mothers” by his patients but not by the medical establishment. His peers hated him. He was ridiculed and harassed by those who tied their reputation and status to a long-held theory of disease. Semmelweis ended up in a Viennese asylum for the insane, was beaten, and died 2 weeks afterward of…. an infection. Years later, he was posthumously rehabilitated and had a museum and university in his native Budapest named after him.

The big US railroad companies, the first large modern enterprises ever to appear, went bust because they could not “see” themselves as transportation companies. They tried to compete on rails with cars, trucks, and airplanes and lost the battle. And if you are not Amish, you know Henry Ford said that if he asked his customers what they wanted, they would answer “faster horses.”

In hindsight, it all makes sense.

The above examples show how logic and reason only take you that far. A gestalt switch cannot be rationalized nor established through intention or sheer will. Hence, another concept from Thomas Kuhn is incommensurability , which describes the impossibility of understanding a paradigm or (science) practice from within another. Albert Einstein did not get the Nobel prize for his General Theory of Relativity, but years later for the Photo Voltaic effect. The collective dismissal of absolute (and intuitive) time and space could not happen overnight, even within the Physics community. It took years for Ph.D. boffins to cross the synapse gap and make the shift happen.

One could compare a business transformation through IT to the threat of an iceberg. Because most of the iceberg lurks under the water, the imagery evokes danger and raises a need for caution. Yet such rationalization is to patch your Titanic with a band-aid. The results are tweeting fridges, the umpteenth messenger app, or the hamburger chain launching a social media branding campaign.

We do not see the world as it is, but as we are.?

Nietzsche wrote that when staring into the abyss , the abyss will stare back at you. In other words, you become what you love and fear. Transformational change starts with authentic courage. It is the courage required to look at the point where business as usual becomes an albatross around the neck. It is the courage to question the fundamental assumptions that made your business so successful in the past. It is taking responsibility for decisions that chart a new course under high uncertainty.?

Facing and riding change is about leadership and purpose.?

Therefore, as often happens, contemplation of such fuse-blowing change evokes incredulity, scorn, and mockery in executive board rooms. No wonder psychology categorizes those reactions under defense mechanisms. They are called so because they suppress anxiety from unacceptable stimuli, such as uncompromising reflection on business identity, management models, and processes.

To fight disruption is to accelerate it.

In the end, it all boils down to self-inflicted myopia. A tragic yet entertaining textbook example was former Microsoft CEO Steve Ballmer’s reaction at the iPhone launch in 2007. Ballmer was blind to what Apple had done and what it showed off in Steve Job’s best keynote ever . I saw it, the audience saw it, and even my cat saw it. But Ballmer did not. The iPhone was the lamp he could not see.

Yet Ballmer did not make a mistake. He and his executives were myopic because Microsoft’s industry-defining successes, stellar financial performance, and culture had conditioned their perception in an iron grip. The shift didn’t happen because they were convinced their business model's fundamental assumptions were fine.

If you would bring up Apple, they would laugh at it ,

The lesson for leadership?

I quote Viktor Frankl: "When we are no longer able to change a situation, we are challenged to change ourselves." And to paraphrase Frankl: ?if you do not change, you are changed. When Satya Nadella was chosen in 2014 as the new CEO at Microsoft, the company underwent a profound culture change, dismissed a taboo by prioritizing cloud computing over Windows, and embraced open source, cross-platform compatibility of products and services… all while growing market capitalization to 3 trillion USD.

Nadella became the equivalent of a rock star.

Shift Happened.

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