We are caught in a moment of time. All the hype, push, the argument for making the “digital transformation” is so badly stalled in many of our Corporations. We are running a marathon, mostly it seems fueled by “spent” energy and a growing sense of lowering our belief and confidence that we can finish this.
These digital transformations are like the deer, suddenly caught in the headlamp of a car that simply freezes, they seem immobilized, even for brief seconds, sometimes its reaction to flee is too late, it gets caught out by the oncoming car.
I feel many of our entities are caught in this moment of fear, bewilderment, rather paralyzed in how to tackle digital transformation. It is overwhelming. The advice available often does not help, it compounds that fear, they seem to be just staring at the size of the problem.
How can this be changed? McKinsey famously dubbed part of it as pilot purgatory and provided their study of this current phenomenon many manufacturers find themselves in “How digital manufacturing can escape pilot purgatory”
In the work undertaken by McKinsey in a collaboration with the World Economic Forum on the “future of production,” it has shown that many companies are experiencing “pilot purgatory” in which they have significant activity underway, but are not yet seeing meaningful bottom-line benefits from this.
The six symptoms of digital transformation purgatory.
The companies seemingly have enthusiasm and can understand the need to digitally transform but are stuck, in six essential parts to this.
I want to explore these six parts of digital transformation purgatory in coming posts.
-Simply getting started with a robust, clear vision and plan to begin the transformation is one. This lack of a clear “defining value” fails to secure senior management commitment, does not communicate the ambition behind the targets and most importantly begin to secure the levels of investment this is going to undertake.
-They are caught in starting multiple pilots but then get caught up in this “pilot purgatory” for multiple reasons or no clear plan or justification, to move forward. The lack of clarity on what the pilot is set out to achieve, the often lack of discipline in the learning, and documenting the issues of where a pilot takes you. You can easily drift off your roadmap you get lost or totally enamored by this and forget what the pilot was set up originally to achieve.
-Then there is this dawning recognition this digital transformation “initiative” is way beyond the team assigned to manage these own internal competencies and the growing realization of how fundamentally challenging this really is.
-Then you have the unbelievable amount of legacy issues to deal with, some so core to the business they really are frightening to change. Dealing with all the complexities of systems built up over years, layered with temporary fixes or systems that are multiple versions of an ERP system, Facing the task of bringing these all into line and the associated costs can be millions and that is before you make the transformational moves you had originally intended.
– Then you seem to find difficulties to see this transformation as fixed but one where the costs seem to multiply. With the results coming in as mediocre and the prospects of heavy investment becoming an even more looming reality, no wonder we are in digital purgatory. This makes the ROI highly suspect and tough to revisit without some very heavy questioning and evaluation. This validation, often of the untested is so hard to overcome.
-Then the one that in my view, transcends all the above, is this fundamental change is not just processes. It impacts systems, structures, the whole architecture of the enterprise, it draws in the whole organizations to achieve alignment to this, in culture, in commitment, and belief.
That belief when you still talk of growing uncertainty, trying to convince a skeptical board they will get a “sufficient” return on all of this disruption and at what cost and deflection away from the business is really hard to justify. There are so many staying trapped in this perpetual purgatory, looking for miracles. Technology becomes secondary as the organization grapples with such changes in the way it undergoes its business. People become central to working through the solutions of transformation. Let alone as the final issue is what these challenges in its present business model to challenge and change and the change in client engagement this demands.
It seems the advisors, the consultants, the guru’s, all arguing for digital transformation, are presently drowning the prospective client with all shapes and sizes of “use cases” doomsday scenario’s and optimistic outlooks to show that “just cause” to these clients that to make the moves necessary are totally necessary, not just to thrive but to survive.
Yet we are presently not moving the “needle” into large-scale roll-outs. The momentum of change is still being pushed, it is not on this acceptance slope.
Delusional or realistic?
The other part of the work undertaken by McKinsey states “more than 90% of surveyed companies believe that they are either at the forefront of Digital Manufacturing in their industry or, at least, on par with the competition” now is that disillusioned, nieve or actually right? No one ever wants to admit they have no plan, lack the talent or capability to transform so they beat their chests with the belief they are on the forefront; “I mean we must be, this is all new to us” as we monitor best practice told to us although this might just have a lagging position. No one likes to take the lead and offer emerging practice, I mean that gets our shareholders very jittery, as we all lack clear visibility. Are we all on par, tell me on what basis? Is it we all still have mediocre results?
Staying in the pack, jostling for position
So one of the reasons for the status quo ,perhaps goes simply like this: I am safely in the pack, moving along with the rest, possibly ready to make decisions but I am presently waiting for someone to make the break and start making the real, sustaining the effort to get ahead. Then I go too.
So for me it seems like we are watching a marathon race, all jostling for position, waiting for the break. As we see there is only one winner and a couple of consolation places, so why do we have this bunching in digital transformation at this time?
I liked specifically one point offered by McKinsey in their report. It is one report that is a must read on thinking through digital transformations for us all.
“A holistic approach to Digital Manufacturing – one that considers the fundamentals of the organization and the business as much as it focuses on the technology-related factors – can help manufacturers get over the hurdles that stand between pilot success and company-wide rollout”
This informs me while digital transformation is delegated mostly to the IT team or the IOT Chief officer and do they have the organizational authority, ideal enterprise oversight and the ability to make the real fundamental changes where many are not technology and digital, they are organizational and business (model) related and those are only found at decisions from the very top of organizations. They, the C-Level stay uncomfortable and remote with the advice they are getting from their experts (internal and external) on technology and the digitization and so we remain stuck in this purgatory place.
Yet it reminds me, just the same as trying to get innovation into the core of boards thinking, it mostly happens when there is a crisis. This was my trigger point to write this.
I receive a number of weekly inspiration pieces that just help give that “greater identification and connection. One such one is workfutures.org from Stowe Boyd and the article he was picking up on a couple of days back, was by Elizabeth Doty on “Want to change corporate culture? Focus on actions.” This was a great share. What I love are those moments when you, within yourself, are struggling on something tucked away in your brain and someone or some comment simply seems to unlock it. Actually, it was more in Stowe’s observations.
Two points made by Stowe helped me:
“There are many types of organizational change, and Doty’s essay focuses on the inside-out, top-down sorts of organizational change when management is attempting to reorient the business in some fundamental way, like digital transformation, or a need for higher performance”
“We’re living in a world where any significant organizational change involves outside-in, inside-out, top-down, and bottom-up changes all at once. Is it any wonder people are stressed, and so many change initiatives fail?”
What triggered my thinking was his opener from Elizabeth Doty and how she had reminded Stowe of Lou Gerstner‘s line:
‘No institution will go through fundamental change unless it believes it is in deep trouble and needs to do something different to survive’
So what will make the “something different” for digital transformation to finally take hold and scale accordingly? Is it the fear of missing out, the marathon runner realizing he is the one to make the break, not wait for someone else. Or is it the realization that the car with its full headlights is actually trained on you, do you freeze and then you simply become a footnote in history. You have a choice in these moments do you “kick-in” run into the trees for safety and that realization that you had a great escape but to do what, simply go back and graze or like the marathon runner you went to early and wait for the rest of the pack to catch you up? The answer is no, you need to push out on your own journey irrespective of others. You can win by your own efforts but they are committing all you have to make this move.
So digital transformation is that sudden realization you need to make it happen. You are moving away from the comfort of where you are, onto a journey of uncertainty but realizing it is mostly in your hands to work through, no one else’s and that means simply and purely “getting engaged and committed” to a reality. That reality that digital transformation is needed, necessary and positioning us all to meet the changes of this century. It is a realization for all of us, we must embrace it otherwise it overwhelms us and we get caught out., immobilized with self-doubt. This is a time and place for real leadership.
So are you the deer caught up in the oncoming headlights? Are you the marathon runner jostling in the pack waiting for someone to break. Each means you are in danger of being caught out. Can you afford to be?