Two mindsets are required to succeed in Digital Transformation: an overview of the Project Mindset

Nowadays, everybody talks about Digital Transformation, Industry 4.0, Innovation, you name it, as buzz words in all kinds of technology and non-technology events, but the reality is that very few companies are working seriously on it. I want to believe that companies are not doing it, not because they are not serious, but because they don’t know how to take the bull by its horns. And to be fair, not an easy task at all.

"All this must be accompanied by a high sense of urgency that will equip companies to keep up and seize the right opportunities".

In my opinion, there are two mindsets that companies need to sharpen or develop to thrive in the Digital Era, a new Business Mindset and a Project Mindset. I will describe briefly the former to delve thereafter into the Project Mindset. There are many companies willing to embrace technological changes, yet they are still stuck with obsolete management models that will make changes even more painful. Let’s not forget the Hamer et at. framework of People, Process, and Technology. Technology cannot act magically when the processes of good management are absent, and people are acculturated to a certain way of working. At least at the two highest levels, executives and managers must embrace a desire for value creation & innovation which will enable the company to transition from a reactive mood to a proactive approach. This change will be cascaded down to the rest of the organization as part of a cultural and business revolution, where at a later stage innovation will come from the ground up. All this must be accompanied by a high sense of urgency that will equip companies to keep up and seize the right opportunities.

To make matters worse, technology is not the only one responsible for change; there are also different business acquisitions, mergers, outsourcing, and global relocations that compound the level of change that companies must handle currently.

Now, let’s focus on the Project Mindset:

Change is the only constant these days since technology is disrupting the whole business environment. While some companies are spearheading the change, others are struggling to cope. To make matters worse, technology is not the only one responsible for change; there are also different business acquisitions, mergers, outsourcing, and global relocations that compound the level of change that companies must handle currently. Not surprisingly, executives are under intense pressure given by customers, shareholders, and employees. To put things into perspective, financial means are not the only concern that executives need to address. The limited capacity of execution is something that is mostly overlooked, as though it were of minor importance. As a matter of fact, once a project budget is approved, the actual successful outcome lies miles ahead with low odds for those companies that did not take into consideration their capacity to execute. Here is clear that money is not the answer to everything when it comes to Digital Transformation.  

With so many changes and projects at hand, the first thing that comes to executives’ minds is the need for a Project Manager (PM). Decades have passed by talking about Project Management with still a lot of gray areas in its understanding. Nevertheless, with the new trend of Digital Transformation, many companies have started off by implementing project methodologies and hiring project managers. Even though, competent PMs will join the organizations, that will only soften the symptoms but will not cure illness. To eradicate the problem, the corporation needs to understand clearly its Project Portfolio and its relevance to the continuity of the enterprise. Let’s face reality, the bigger the organization is, the higher the number of brilliant ideas and creative solutions for problems - that sometimes are not even real -. Everyone believes their idea is the best and the most important, as a totally understandable human behavior. So, how to juggle with so many terrific ideas and projects? The answer seems logical, prioritization; yet that is easier said than done. Here, I will do reference to the concept of “Hierarchy of Purpose” by Antonio Nieto-Rodriguez (that I like to call the 5Ps of Project Portfolio), including my own notes.

·        Purpose: companies need a clear strategic vision on how they create value for their customers or what is the new value they want to create for their existing or future customers. With Digital Transformation, companies could also decide what new markets/industries they want to develop.

·        Priorities: what are the priorities now, and two to five years down the road that will get the organization closer to its purpose.

·        Projects: which projects will get a go and which project should be stopped or even scrapped. Stopping or scrapping a project could sound frightening to many, but it is required since, as mentioned above, the budget and the capacity to execute are limited. It is worth mentioning that some projects seem less obvious, yet its dependencies could be too high that without those the purpose is not possible or simply will come much later.

·        People: although Peter Drucker’s term for the knowledge worker has been always accurate and very in-tune with our present reality, these times of big changes require daring doers rather than static experts. Thus, I coin here the term the make-it-happen worker, as one of the most serious needs that corporations face today. The discipline or background is now less relevant, provided that this new type of worker can achieve and deliver the expected outcomes by integrating different expertise and knowledge within and without the organization.

Companies need to assign their best executors to the most challenging projects, while at the same time setting a culture of a Team of Teams rather than mal-functional workgroups (from the book Team of Teams by General Stanley McChrystal). The working culture within the small teams must be agile and less or non-hierarchical, and the pertaining information must circulate freely within the team. The team has the ultimate responsibility for the challenge at hand. Work Packages or Deliverables of a project can be handled by different teams with clear expectations and challenges to overcome.

·        Performance: outcomes must prevail over inputs in a Project Portfolio. Companies need to focus on their goals, benefits, and the impacts of their initiatives rather than the budget and timeline, which are sure-fire ways of monitoring the project throughout its execution, but not during the project prioritization. We have a natural, or learned, tendency to gravitate towards project budgets, as though we would be measured by the amount of money spent rather than the amount of money generated. Let’s make no mistake, companies are business entities meant to create profit by constant value creation and risk-taking within certain exposure. Conversely, government institutions and Non-for-profit organization are meant to spend a budget in a certain way.

The project mindset is crucial to succeeding in the Digital Era, simply because of the overwhelming number of changes that translate into more internal projects with different pressures and demands. Operations processes will be frequently transformed due to technological advancements and business efficiency decisions, which requires less rigid workflows and a flexible team open to adapt to new circumstances.

The combination of these two mindsets, Business & Project, will generate a conducive environment for companies to succeed in reaping the benefits that bring the Digital Era for all who want to get on board.

Best regards,

Juan J. Gil

To ponder: “We have moved from data-poor but fairly predictable settings to data-rich, uncertain ones” General S. McChrystal (Author of Team of Teams).