Building your future on digital sands


Digital

I’m sure most of you reading this thought piece are all too aware of the Gartner Hype Cycle that so neatly encapsulates the path many technologies take, from the froth and outlandish expectations that mark their early emergence to the inevitable failure to meet those expectations, and then their gradual adoption across society.

It seems at the moment that there are a whole bunch of technologies that prompt us to ponder just where on that hype cycle they sit, whether it’s artificial intelligence, big data, blockchain, 3D printing, drones, the Internet of Things or one of a whole bunch of other things that are set to take the world by storm.

The breadth of new innovations has been bracketed by the WEF as part of the fourth industrial revolution[1]. WEF chairman Klaus Schwab classifies the innovations incumbent in this period along three broad dimensions:

  • Physical changes, including new materials such as graphene, 3D printing, a new wave of robotics and of course driverless technology
  • Digital changes, including the cheap sensors that underpin the Internet of Things, blockchain, artificial intelligence and pervasive platforms
  • Biological changes, including rapid reductions in the cost of gene sequencing and manipulation technologies such as CRISPR

Whilst these cover a broad range of things, they all have one thing in common: digital technology.  It’s perhaps no surprise therefore that there is nary an organisation that isn’t undergoing some kind of digital transformation. The thing is, with research suggesting that anywhere from 66[2]-84%[3] of digital transformation efforts fail, it seems that most of these efforts are undertaken upon very shaky foundations.

It’s almost like the default response to uncertainty is to do digital something. It doesn’t really matter what, or often even why, but we must respond to a VUCA world by doing something digital, and it’s an approach that fails to work because it lacks the right foundations to build from.

Getting the foundation right

The June 2017 Capgemini report entitled The Digital Culture Challenge: Closing the Employee-Leadership Gap[4] underlines the importance of getting this right. The survey of 1,700 leaders and managers from eight countries revealed that culture issues (62%) were the number one hindrance to digital transformation. Perhaps unsurprisingly, archaic systems and lack of digital skills came in at numbers two and three; but rather damningly lack of clear leadership vision took fourth place in the list of reasons why digital transformation may not take hold.

The challenge of digital leadership was further highlighted by the finding that whilst 40% of executives surveyed believe their organisation had a digital culture, only 27% of employees agreed. Unfortunately, this disconnect also appeared across a range of statements covering areas including:

  • We easily collaborate across functions and business units – 85% v 41%
  • We have a culture of innovation, experimentation and risk-taking – 75% v 37%
  • My organisation has a culture of flexibility and agility – 56% v 40%

Digital may well be the way forward for your organisation and its customers but organisational transformation has to start with cultural alignment. When 75% of executives believe they have a culture of innovation and only 37% of employees agree then there is something far wrong with the way in which senior leaders have looked to structure and introduce culture change. When the same level of disconnect is seen in respect to collaboration, one of my key ‘Next Generation Organisation’ characteristics, then whatever the organisation thinks it is doing it may need to think again!

Changing an organisations’ culture starts with an understanding of where you are now, and the statistics in the Capgemini report (and others) show is that many leaders have little idea of what is actually happening on the ground within their own organisations. I would argue that until senior leaders take steps to rectify this, then any attempt at ‘digital culture transformation’ or innovation culture transformation is doomed from the outset.

The statistics in this report are on the whole pretty damning but statistics can only tell part of the story. The irony is that when we are looking to build a culture which embraces interconnectivity and big data, to build real understanding we have to be able to delve behind the figures. Why is there such a disconnect in understanding? Is it down to leadership or organisational structure, does the existing culture throw up barriers, or is external pressure forcing a less than ideal pathway?

There will be no one single answer but with understanding comes greater clarity as to the way forward. Make no mistake though, digital culture transformation will require a culture reset. Anything else is just leaving the future security of your organisation to the shifting sands of fate.

[1] https://www.weforum.org/agenda/2016/01/the-fourth-industrial-revolution-what-it-means-and-how-to-respond
[2] http://www.consultancy.uk/news/2656/two-thirds-of-digital-transformation-projects-fail
[3] https://www.forbes.com/sites/brucerogers/2016/01/07/why-84-of-companies-fail-at-digital-transformation/
[4] https://www.capgemini-consulting.com/resources/the-digital-culture-challenge
This article was written by Cris Beswick for The Future Shapers and previously posted on 22/06/2017.

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