Digitisation is not Transformation: Lesson Seven

This is part of a LinkedIn series by?Dr Keith Dear, Director of Artificial Intelligence Innovation at?Fujitsu Defence. The series covers seven lessons we can learn from transformations that fail. Click to view the previous six lessons. This is the final lesson and summary of the series.

Lesson 7: Manage Expectations.

A recent book by two MIT researchers finds that, on average, companies that have undergone successful digital transformation – such as Audi, DBS Bank, LEGO, Toyota, and many others - are drawing just 5% of revenue from new digital value propositions after 5-years. How they work might be transformed, but the results are taking time to follow.

This does not mean that transformation, with its 70% risk of failure, is not worth it. It is non-discretionary in any competitive environment.

But those leading it should understand that what they are doing is the minimum required to keep-up. This is clearly true in the commercial sector. But so too in the public.

Summary:

In these seven lessons are the keys to successful digital transformation. The vision of the future of the organisation and the strategy to achieve it must drive the technology, not the other way around.

1. Digitisation is not Transformation. Definitions matter: they are compass bearing that sets the direction your people will follow, if they are not clear, they will go in many different directions.
2. Business Strategy must lead. You don’t have machine learning, or digital ends – you have strategic ends, and digitals ways. The organisation transforms and digitisation follows, not the other way around.
3. Design from the outside in. Design and deliver digital transformation, measure its success, around customer and stakeholder outcomes; in planning and evaluation you must hear what you need to hear independently, from outside, not tell yourself what you want to be told.
4. Consider a Chief Incentives Officer. Understand why past efforts to transform have failed, not just what they have failed to do. Deliberately and carefully ensure incentives are aligned at all levels around successful delivery. Systemic integrity, not individual is key.
5. # Staff ≠ Status. Give leaders something else to boast about. Perhaps finding a measure of ‘human hours or people power’ as a cognitive equivalent of an engine’s ‘horsepower’ to describe the organisation you lead.
6. Adopt a flat structure, and emergent strategy as complement to the planned strategy; to surface problems quickly, to sense, adapt and respond to changes you didn’t anticipate when writing your planned strategy.
7. Manage expectations. Transformation is the minimum you need to do to continue to compete, it will not provide you a decisive, sustainable strategic edge.