“Digitalization” and “Digital Transformation” are already focus topics on corporate strategic agendas for a while. A lot of investment happened, vast amounts of money and energy have been spent here.
Not always with success. Recent studies from BCG, BAIN, Mc Kinsey and others on success rates of digital transformations state that only 30% or even less of transformations succeed in achieving their objectives.
What you can hear everywhere is that “adoption” is a big concern, if not already a problem. Since the effectiveness of digitalization is the product of technical enablement times adoption, the focus starts to shift. Digital adoption gets into focus to make investments in technology effective and sustainably leverage process transformation.
“I expect Google and Amazon to be a disruptive distributor in our market soon. If we cannot answer their request in seconds, they will ping the next competitor. This means our entire information chain needs to be digitally integrated in a seamless way. This is very different from having a prominent e2e planning system implemented and the people bypassing it with their excel spreadsheets!” a CSCO in life science recently said to me. This hits the nail!
Digitalization changes the operational way of working fundamentally, not just incrementally! We are typically talking about new workflows where former sequential steps get consolidated and integrated, new responsibilities, new collaborations, new supporting functionality with much more supporting logic. Digitalization enforces a higher level of integration, less room for manual intervention, corrections, and amendments. The missing master data is a problem in the integrated world, while the less integrated was more tolerant since the missing information got augmented in the local excel sheet. And the high level of integration creates interdependency across the process: like a gear depends on all gearwheels doing their job in interplay, the rule “all or none” also applies to digitally integrated processes.
On the other hand, people – we all! – tend to retain our habitual way of working! We do it by nature. This is what we call “The force of habit”. We all have our long-practiced routines, procedures, automatisms, tools, and collaborations. Applying these – especially under pressure – is a question of speed and efficiency, also the feeling of controllability.
And when it comes to change in our domains, we often subconsciously also defend our domain. People typically find solid rational reasons, but the emotional part is the subsurface part of the iceberg.
Consequently, workflows often remain “tribal”. That means the digitalized to-be way of working gets just partially adopted, habitual ways are retained and the “local EXCEL sheet” – the most obvious symptom of tribal workflows – survive. Often even adherence KPIs get cheated. People know for example that their sign-in into the new system is monitored. So, they sign in before they open Excel, simple.
The result is quite disastrous: Tribal elements neutralize any effect of digitalization. The investment gains suboptimal return if any. Digitalization remains superficial without real transformation. This is what the title of my upcoming book expresses a bit more drastically: “Tribal f*cks up Digital”.
An experience that many organizations have painfully made is that digital transformation is much more than implementing digital technology. Throwing technology at vaguely known business processes is a waste of money and energy.
Don’t underestimate that your as-is processes are already “tribal” today. That means that the workflows do not necessarily correspond with your process description or the expected way.
Anyway: level 3 is by far not detailed enough, neither for as-is understanding nor for to-be!
Do you doubt that your digital adoption is sufficient and want to get more from your investment? Or you are approaching a digital transformation project and want to avoid the pitfalls that neutralize effectiveness? Anyway… contact me at www.klausimping.com
One strong piece of advice upfront: Independent from the money being spent, motivate your organization to uncover poor digital adoption! Better knowing and changing than building on sand…