Who doesn’t like a good buzzword? We love buzzwords. We love buzzwords as they communicate complicated ideas between stakeholders, so everyone can move forward on their action plans. Digital Transformation is a doozie. It is all the rage in the technology sector, second only to disruption. The hidden danger with buzzwords is when they are dropped into the conversation without clear context, it is easy to just go along without really understanding the implications of what was just spoken. But what does digital transformation mean? Let’s break it down into a couple components.
Your organization is composed of competencies, which are defining capabilities or advantages that distinguish an enterprise from its competitors. Transformation begins at the conception stage in competency development.
Your organization’s competencies (processes, resources, human talent) were developed with the skills and technologies of the day. For organizations greater than five years old, the tools available today are radically different than 10, 20, or 50 years ago. Yet the competencies that make your organization great were likely developed very early in the organization’s history, and probably have remained the same since that development period. Where transformation becomes relevant is when you look at the tools available today and reimagine your organization’s competencies. This is a different approach to incremental improvement, whereby small changes are phased into a core process that remains relatively static. In practice it is important to keep in mind that overnight transformation is nearly impossible; therefore, transformation is dependent on a transformational vision, but is executed incrementally.
Innovation is typically not a product of brute force creativity, but rather combinatorial. The smartphone is an excellent example, microwave technology, LCD screens, transistors, and Li-ion batteries have enabled us all to carry the totality of human knowledge in our pockets. Your digital transformation journey begins with considering the tools of the day, but these tools should not be considered in isolation. Adding cloud, mobile, machine learning, block chain to any process as isolated solutions will not yield beneficial results. Blockchain is a great example of a technology of the day being injected into a yesterday process, yielding little value for most implementations.1 2 We are not looking for a better mousetrap, but questioning the idea, is a trap the best tool for the desired outcome we want to achieve?
In the last blog, technology as a differentiator, I argued that technology can be used to redefine the customer experience or supercharge creativity. A vision for a home decor retailer using augmented reality to transform a customer’s own home into a showroom speaks to a vision that would transform the face of retail if successfully implemented. Transformation begins with determining a clear vision for your organization, then establishing the competencies required to fulfill that vision. Transformation is not instantaneous, like the name suggests, it is incremental, but to stay in the game, the vision must be transformational.