Digital Transformation Success is a Myth

I have been working for a while now as part of digital and data transformation teams in large traditional companies, both as a consultant and as a responsible manager. There are big plus sides of such a job. You are working on topics that are considered to be “hot” and there are usually some innovation budgets you can tap into in order to finance your new projects. Its easier to find new jobs and negotiate good salaries as headhunting firms are looking for digital skills and people with experience on digital topics.

The job has also a big downside that most mainstream media outlets involved in generating the hype seem to underestimate. It is a dilemma that nobody I met so far can truly escape.

In simple terms put, you either appear successful at digital transformation by focusing on digital showcases or you try to drive real change (which takes an awful amount of time to show results in the best case or does not show much effects even after years due to the difficulty to change company culture). In a way its a lose – lose situation, which leads me increasingly to believe that Digital Transformation Success is a pure myth, at least when you look at it from the perspective of the person tasked to do the digital transformation. The simple truth is that you cannot really succeed in digital transformation. Let me elaborate on that in a bit more detail and also tell you how I adjusted my tactics based on that simple realization.

Case 1: Happy Honeymoon

In the first case (focusing on digital showcases rather than transformation), you most likely get some recognition in the beginning but it will quickly evaporate as you are not able to deliver to the expectation after a while. This approach brings short term benefits that look good to your upper management. I saw many digital labs and departments tasked with digital transformation producing one digital prototype after the other while neglecting the need to make the rest of the organization ready to be able to absorb these innovations.

Hence, most of the innovative ideas never made it into production or roll out, where the real business benefits happen. And even if they get there, they are simply rejected by the business departments as their are not ready to use them. Inevitably, after a shorter or longer while, the honeymoon period ends. Due to pressure from your executives to work on productive roll outs and since that requires you to fix some basic underlying problems, you are naturally shifting your goals towards driving digital transformation at the business departments. This makes you focus on the underlying pain points that prohibit the success of your great digital innovations you produce. Which leads us to case number 2.

Case 2: The Endless Road

In the second case (trying the hard stuff: transforming the company at its core), its even worse! You and your team run 12 hours and more a day to transform the company. If you do a poor job, nothing happens. Other departments will start to point at you and will ask you to justify your existence. If you do a good job at it, most people hate you since you are changing the company that they know and love. There is most often a reason why people work for a company. It is because they feel attracted to the products and culture. And you are here to change probably both at the same time (Sidemark: this in itself is the very reason why it is so difficult to execute digital transformation as you need to push the company on these two axis simultaneously). As a result, competing departments will try to convince your board that you are a waste of money, time and resources to slow you down in making progress as they fear to lose power and influence in their kingdoms.

To make things even worse: Why the disruptive nature of change does not help at all

Well, we are not done yet. There is an additional difficulty that you need to deal with as somebody working in digital transformation. Digital disruption has an exponential curve, which mans that it comes slowly without being noticed, but then turns suddenly and brutally your entire industry upside down (as in the case of Nokia and Kodak). Considering that your company is a traditional company, the digital maturity of your company is probably extremely low and it takes years to see the first results. At the same time, the revenues and profits of your company are still very high since your products are in the “Cash Cow” phase of their product life cycle. So, your executives do not really feel the pain of the digital disruption that is entering your industry. Perhaps they believe you that it is coming, but that is very different to real pain. And even then, it takes years of digital catch up until first results are seen. There are not many executives that are willing to wait that long as most of them will move into new jobs by then or get retired. Why should they risk their big bonuses today for something that does not impact them immediately?

As a summary, when you choose to go the endless road, even if you are the smartest and most effective person in the world, digital transformation will probably take too long until the fruits can be reaped and there is currently not enough “real pain” to make what you do attractive to your current top leadership. For them, it is enough that you do “digital showcases” to prove to the investors that your company is making progress and is innovating. Then, we are back at case 1. Which means that at some point people will start saying that your showcases do not bring real benefits and will stop supporting you. Well, does that not sound like the perfect vicious cycle?

Here are a few tactics that I learned
It is worth to think about tactics to solve at least partially the dilemma, especially when you believe that digital transformation is the right way to go for your organization. As part of my work, I started to apply three simple tactics that might help you as well. They won´t make the dilemma go away, but they can help to soften it.

1. The Mixing Cases Strategy: Combine some elements of each “Happy Honeymoon” and “The Endless Road” in every project you do, right from the very beginning. This will keep people happy while buying you time to do the long-term stuff. It might sound simple, but it is effective. The trick is to find the right mix. E.g., when you run an analytics pilot, also work on the data quality or data collection in parallel.

2. The Expectation Story Strategy: When you are doing digital transformation, never just simply say you are doing this and that because of this and that. Always tell a story where we are today, what the steps in between are and what the end game looks like. Make sure that from the very beginning you raise the right expectations of what your top leadership can expect at which point of time. This way they see even small steps as the right step towards a bigger goal, which your top executives can then communicate to shareholders and stakeholders (whatever makes them look good will make your live easier).

3. The Evidence Collection Strategy: Once you applied the Expectation Story Strategy, you should start taking base measurements and then start to take further measurements during every step to provide regular evidence to your leadership that your company is on the right track based on the expectations you have raised as part of your storytelling. Having evidence to show that corresponds to the expectation level of your storytelling in the beginning is a prove point that your story is right (at least so far). It helps to increase the level of trust of your upper management in the digital transformation activities during the next phases as you move towards the defined target state. Even if business benefits are not high during the phase you are in right now, people will feel more asserted that the high business benefits that come later are in the process of being achieved.

Happily Forever After

In a way we can draw a comparison to our private lives. At which point would you consider a marriage to be successful? Is it after a glamorous wedding and a honeymoon with lots of beautiful pictures taken on the beach and posted on Facebook? Certainly not. Just because you mastered the honeymoon, it does not mean that your marriage will last happily ever after. So, is the point of success after 5 years of happy marriage? Or, perhaps, rather after 20, 30 or more years? We cannot properly define what success means in the case of marriage as long as the couple is still alive. Nevertheless, we can perceive a marriage to be successful when we meet a couple after they have been through many ups and downs in their many years of marriage and still appear to be reasonably happy. We never know for sure, some myth will always remain! Maybe, its the same with digital transformation.