Despite billions of pounds of investment in technology and organisational change across the private and public sector, managers and employees can feel that ‘transformation’ is an unachievable ideal. By its very nature, transformation should be finite – with a beginning, middle and end. And both managers and employees should be able to see the progression at every stage.
I was speaking with a colleague recently and we were reminiscing about the first wave of ‘digital transformation’. It would have been late noughties when the term first started being tossed around, and before we knew it, it was the hot topic for every CEO and had become an industry in its own right. So what’s happened in the past decade? Well, according to McKinsey Global Institute's Industry Digitization Index, Europe is currently operating at only 12% of its digital potential while the US is a little further ahead at 18%.
Why is that? I would say that it’s because transformation programmes can sometimes struggle to achieve real transformation. My preferred definition of transformation is ,”a complete change in the appearance or character of something or someone, especially so that that thing or person is improved.” How many digital transformation programmes have reached that goal? I came across one public sector transformation programme recently that has been running for almost five years in different forms. Five years of taxpayer’s money being poured into a bottomless well of consultancy and technology. Has this organisation undergone a ‘complete change in appearance’ that has, ultimately, improved its service delivery and contribution to society?
The problem with digital transformation is the digital bit
Part of the issue with digital transformation is, well, the digital bit. Not in the sense of the technology itself, rather that it is born of the concepts of digitisation and digitalisation – that is, converting analog information to digital form and the process of doing this. Digitalisation is a tremendous enabler - big data, artificial intelligence and blockchain are powerfully transformative technologies - but, viewed in isolation, it ignores the role of process change and, critically, people.
It’s encouraging to see more recognition that people are at the centre of our digital future but I’m not sure we’ve quite cracked how to build people in to our transformation strategies and programmes. I frequently return to one of the most influential – and still, in my opinion, best – books on digital transformation, ‘Leading Digital: Turning Technology into Business Transformation’ by George Westerman, Didier Bonnet and Andrew McAfee. My spine-broken and heavily vandalised copy of this text is never far from hand.
First released in 2014, just as the first wave of digital transformation was coming to an end, it’s a 12-step guide to transforming organisations with technology. Despite the structure, it’s not didactic and is also a wonderful read, full of inspiring examples.
Where it stands out is the approach to people and understanding their criticality in business transformation. During my time at Scottish Government, working across public sector bodies, the most important point of any introductory meeting was getting an agreed understanding of digital as ‘user-centred service delivery enabled by technology’.
Orchestrate or unleash?
Fundamental to the role of people in transformation is understanding the ‘operational paradox’ of managers and employees, as outlined by Westerman, Bonnet and McAfee. Managers want to orchestrate, indeed some need to orchestrate or they don’t feel like they’ve done a good job. If they can’t see or hear employees, there’s a feeling they’ve somehow lost control.
Counterbalance this with the modern employee, who wants more than ever to be liberated from traditional management, which restricts their freedom. In some cases, technology has become an employee tracking device, allowing insecure leaders to micro-manage, when it should be an enabler, unleashing people to achieve their objectives.
This is keenly felt in shared service centres, so often seen as the goalkeepers of the corporate world – only being noticed when they make a mistake. IT functions in some organisations have become so obsessed with keeping the lights switched on, so to speak, that unleashing employees’ potential is not a priority.
Yet, employees yearn to be innovative, and take advantage of new technologies to improve service delivery and end user experience. It’s not as simple as having ‘personal development’ time or desultory innovation spaces – employees feel most valued when solving actual problems and genuinely contributing to business goals.
Technology makes it possible to both orchestrate and unleash – the two need not be mutually exclusive – and good transformation strategies should recognise this.
Of course, the challenge doesn’t begin and end with the approach to people management. The integration of people, process, new working methods and technology is both a structural and management challenge.
To build foundation capabilities, there is a clear need to invest in digital competence. Unleashing employees without a framework for behaviour or a safety net for the occasional failure is a dangerous business.