It seems like no day goes by without me hearing the word “transformation” tossed around, usually with the prefix “digital.” At a deep level, I think everyone knows and understands that transformation of any kind is not only difficult but, in most cases, has an extremely low probability of success.
The term digital transformation is a misnomer that has quite a lot of people confused. It is first and foremost transformation enabled by digital technologies. But people confuse this by making “digital” the operating word rather than “transformation.” This is probably where most of the trouble starts with all digital transformation projects.
And yet, everyone talks about digital transformation as if they are pretty sure that their project will not only see the light of the day but also be very successful.
In the past, people used terms like “innovation” and “disruption” so much and in so many different contexts with so many meanings that they lost relevance. It looks like digital transformation is going the same way.
Acceptance
I believe that to have even a shot at success, all {digital} transformation projects need to start from accepting the current reality or state of affairs. And true acceptance can only happen if we own the role that we have played in creating and shaping the current reality.
The questions that need to be answered at this stage are:
- What is our current reality?
- What was our role in creating this?
- Are we happy with this reality?
If we are happy with our reality, there is nothing much to do except to continue doing what we have been doing. No transformation is needed. You can’t force-fit this onto a set of people who are happy with their reality.
If we are unhappy with our reality, the question then is: Does it hurt? And how much does it hurt? Does it hurt enough for the people to want to change? Change is difficult in and of itself, and it becomes a lot more difficult if it is done without wanting to change.
Vision
Once we decide that the current reality is hurting us enough and that we want to do something about it, we need to come up with a vision of what the future looks like. This is where taking on a leapfrog challenge would be a good start.
Leapfrog challenges, according to Porus Munshi, are challenges that force you to rethink the way you do things. This is your aspiration. The bigger and bolder the aspiration, the more you are talking about transformation.
A good example of digital transformation was the onset of ATM machines. They fundamentally changed how we interacted with banks. The same is happening now with peer-to-peer lending and the revolution that fintech firms are bringing.
The goal of any transformation project is to reimagine work, not to do the same thing faster or cheaper or better. There is a place for doing that; these projects are called continuous improvement projects.
Even if we are trying to make things better, faster, and cheaper, we need to look at the scale of impact. In his book Making Breakthrough Innovations Happen, Porus says it is better to take on 10x challenges rather than 20% or 30% challenges. When you are trying to do 20%, 30%, or even 40% improvement, you tend to do more of the same: work harder, reach out to more people, get more efficient, increase your sales conversion ratio, etc.
However, the moment you are attempting a 10x improvement, you know right away that doing more of the same is not going to help. You are forced to think differently, explore newer ways of working. You tend to look for completely new opportunities; you get permission to challenge the assumptions that the entire business or even industry is operating in, Therein lies the true opportunity to transform.
Alignment
Then comes the need to share this vision and get the teams rallying around the vision. This is not going to be easy. By definition, a 10x improvement project will sound too difficult. It will look improbable.
This will bring out all kinds of excuses from the team:
- This is just impossible
- No one has ever done this
- We don’t have the ability or the talent to do this
- We don’t have the budget for this
- Our partners will not agree
- Our margins don’t support this
- And many more
This should tell you, the leader, that you are on the right path. If you don’t get these kinds of responses, it means that you haven’t aimed high enough.
However, it is now your responsibility to get the teams aligned and agree to the vision you want to aim for. Two ways to do this are:
- Burning platform scenario: Show the team the grim reality of the present course of action and what that means for all. Make them feel the pain the team will have to endure if everything remains as-is, then show them that the only option is to burn your ships and march forward toward the new reality. The idea is to scare them enough about the current course that everyone wants to change and move toward the new vision.
- Garden of Eden scenario: Talk about all the great things that the new reality can bring. This is when you motivate the team with a vision that is so much better than their current reality that there is no doubt in everyone’s minds that the new reality is where their future lies. This is all about enticing them with the gifts that the new vision will bring them, once realized.
It’s easier to use the burning platform, as humans typically react much stronger to negative than positive emotions. However, leaders need to be careful about which strategy to use, as people are not dumb and can easily see through any kind of deception. So, if you are not on a burning platform, don’t use one, or find a way to create one that all can agree with, then use it to kickstart your transformation project.
In conclusion
Two of the most important success criteria of a transformation project – digital or otherwise – are the scale of transformation you’re aiming for and getting buy-in from the people who will be working on the project. These are necessary (but not sufficient) conditions for any transformation project to become successful.
Strong execution is another necessary (but not sufficient) condition for successful transformation projects. I will talk about execution in a future post.
Want To Transform Your Business? Transform Your People
This post first appeared on Musings of a Neo-Generalist and has been republished here with permission.
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