The delusion of digital transformation

Is there a project in your company around digital transformation? I’m guessing that most of you are involved in, have heard of, or have been in a digital transformation program by now. If you haven’t, then your company is probably going to loose in the short term. At least, that is what people tell you. But if you take a good look at digital transformation then you’ll see that it might just be a delusion.

Digital native or immigrant

Some companies were born in the digital age. They have a digital product or service and they are successful in selling it to the masses. These companies show rapid growths and it hardly seems to cost them any effort to be successful. They are not going through any type of digital transformation, they just are digital.

Most other companies that are not digitally native look envious at them. And that is when they decide to launch a digital transformation initiative to catch up and be as successful as those new entrants into the market. And very often, they argue, they have a note worthy heritage, a lot of capital and will therefor beat the newcomers if they just fix this digital transformation thing. So they implement new software, start using SAAS-products, launch new things into the market, start collecting piles of data and get themselves trained in a digital mindset. But that is not what really matters.

Digital as a distraction for what matters

Digital transformation very often is just a distraction from what really matters and what transformation should be about. Yes, the world is changing rapidly and technology is an important driver for change, but merely digitizing is not a winning strategy. Incumbent companies seem to forget what they were great at and investigate and design how the thing they are great at can be sustainable in the future. Instead, they launch an innovation lab to embrace the digital and start experimenting and doing without reflecting on their past and asking what it is they really believe in (or believed in).

I’m not arguing that the world hasn’t changed. It has. And (digital) technology might have set it off exponentially. But that is just a starting point. The real change comes when people apply these technologies in daily life. Then you see that we’ve moved from delivering just a product at at single point in time, to delivering a continuous stream of value and building long-term relationships with clients. Businesses are no longer structured hierarchically. There is no longer a single product owner, but an entire team is in charge of product development. The way companies run has changed, but not what companies are about! It is still about the products and services that people want to pay for; the services they care for and that are valuable to them. Every (design) question for any company wanting to innovate (or transform) should be: how might I change a customer’s life?

What are you willing to struggle for?

If you believe that ‘digital transformation’ is a magic bullet that will solve all your challenges, then you are fighting a delusional battle. As soon as you’re done with digitizing the really disruptive change kicks in. You’ll realize that this digital transformation means that your systems should change, that behaviors of everyone involved should change and that your company structure is incapable of doing all of that at once. And before you know it you are going to argue to stop transforming: the projects are not making real money, it is taking too long, etc.

This happens because you haven’t identified the things that could come in the way of change: you’ve dreamed of an outcome and haven’t wondered about the process. Because transformation is a painful process. It is not just about what you want to be in the future, but also what you are willing to struggle for in getting it done.

Designing a cone of possibility

Yes, companies should transform to become more sustainable for their future, but digital is only a means to an end. Start by asking why you as an organization matter? Then explore what you want to achieve in doing that in the future; confront yourself with what is holding you and your company back and then start working (or perhaps I should say: struggle) towards it.

It is what we at Minkowski call ’the design of a cone of possibility’. It has a strong grounding in your past and focuses on the future. It will allow you to take action (but not before you’ve confronted your limiting beliefs and have started to think differently). As a result of that process you will wake up to what really matters (what matters to your clients) and you can then begin to transform.

The future is not about digital transformation, the future is about transforming your organization to the possibilities that are in front of you.