Fact: 99.5 per cent of instances of the term ‘digital transformation’ are misnomers (source: me).
Don’t get me wrong; digital transformation is a very good thing, it’s just very hard to do. It requires people to change and the more senior they are, the harder it is. Joke: the first thing to do in any transformation is sack the leadership team. Unsurprisingly, this doesn’t sell well.
McKinsey claims 70 pe cent of transformations fail due to an under-ambitious vision, disengaged teams and a lack of investment in capabilities. In my experience, it’s mainly due to failing to understand the ‘transformation’ bit and assuming that it’s about adding digital technologies; ‘digital paint’, so to speak.
‘Transformation’ really means changing the way you deliver value, not simply updating the toolset. Digital technology is an enabler, not the transformation itself. In practice ‘digital’ means ‘software’, which is pervasive in our lives, whether or not we acknowledge it. It controls communications, power, commerce, logistics and pretty much everything we need daily.
Digital transformation implies agility
For decades, it’s been standard practice in the software sector to use agile working practices. In essence, this means the ability to respond rapidly to changes in your business environment. Software developers can do this relatively easily because they use modular platforms which enable changes to be broken down into small, swappable components. Changes can be made without affecting a large number of dependencies in the broader architecture.
Sadly, agile is often misinterpreted as a magic makeover that speeds up delivery teams. The senior leadership team embarks on a transformation programme, expecting everyone else in the organisation to do the same things as before, but faster, cheaper and cooler. They’ve heard about scrum, sprints, points and so on, which leads them to think of agility as something to be delivered by the IT team.
First of all, rebadge things with cool-sounding terms such as ‘product approach’, ‘UX’ or ‘DevOps’. Secondly, select a technology platform and identify some ‘quick win’ processes to digitise. Despite these taking much longer than expected, eventually they go live. Thirdly, once all of the low-hanging fruit has been picked (and assuming some enthusiasm remains), grasp the nettle and try to engage the more intransigent business teams. Unfortunately, everyone is too busy doing things the way they’ve always done them, there’s a deadline next week, everyone is on holiday and so on.
You keep your technology delivery team busy by delivering non-strategic ‘nice to haves’. Soon, you find yourself supporting a new legacy IT system of your own making, and everyone wonders what all that transformation stuff was supposed to be about. The senior leadership becomes increasingly disengaged and moves onto other priorities, and the executive who was leading the charge leaves the organisation to try again somewhere else.
It’s the organisation that transforms, not the ‘digital’
It’s easy to poke fun at the ‘agile theatre’ described above. Seriously, transforming an organisation is difficult because it’s counter-intuitive. Most of us go to work motivated to deliver something worthwhile, and improving our performance means doing it faster, cheaper and with less waste. We can’t visualise a completely different way of working. Consultants and transformation-enabling suppliers are needed because they bring an outside perspective, so here’s mine.
Transformation is highly risky. Done badly, it could seriously damage your organisation’s performance.
It’s inadvisable to adopt a ‘big bang’ approach involving lots of change all at once. A classic trope of agility is to change things iteratively in small increments, to create short feedback loops and enable course correction should you misstep. The mistake in the approach illustrated above is to see the iterations as incremental deliveries of new technologies to the business, but constrained by traditional project thinking (big scope and a deadline), now with added scrum meetings.
Your mission will be unchanged, say, “to provide the people of Someshire with affordable, decent places to live in a safe, supportive community”. However, you will need to create a new vision, an aspirational and inspirational statement of your ‘North Star’, an unattainable but alluring destination providing unwavering orientation. This describes a future that may look very unlike your existing operating model, acknowledging the changing needs and expectations of your customers and leveraging emerging resources and opportunities.
Your strategic goals may outline new ways of financing, developing and acquiring property, more flexible delivery models and customer-centric engagement patterns. However, this is as far as it should go. To avoid becoming yet another failed public-sector IT project, the details of the execution should be delegated to digital delivery teams, and measured against outcomes.
No idea of the challenges and risks
This is the bit that most housing providers struggle with. They fall back into demanding a timebound roadmap of delivery commitments (a.k.a. a project plan) despite having no idea whatsoever of the challenges and risks involved. At Housing Technology’s conference last March, a housing IT leader told me that their Dynamics supplier had promised a delivery from a one-month ‘sprint’, but that this was now in its tenth month. They had promised an outcome without actively managing the client’s expectations and their role in the delivery; the scope didn’t creep, it leapt.
This is what’s behind my provocative joke at the start of this article. To transform an organisation, you need a vision of the future, clear but leaving room for strategic and tactical decisions on how to get there because no organisation ever knows precisely how it will do so.
Commitments must be made only in terms of measurable benefits, not specific deliverables (outcome, not output). Delivery requires participation from the whole value chain, with the ability to course-correct. Embracing this uncertainty requires strong, visionary leadership and a move away from top-down, command-and-control management towards leadership of empowered teams by vision, inspiration, example and outcomes.
Aidan Dunphy is the chief product officer at Esuasive.
