Five years ago, digital transformation was in fashion. Now it is declared to have been achieved, or to be well on the way. And the trend is artificial intelligence. And in three years’ time? Beyond these fashions that fuel discussion and help sell technological – and sometimes intellectual – services, what is really happening with these “transformations”?
One of the benefits of social media is that ideas can be multiplied rapidly. What used to be published in specialist magazines and debated among experts now spreads quickly through the new digital media, then, on the rebound, through traditional media gone digital (print and broadcast “press”) and finally, thanks to these complementary channels, to the general public, professional or not.
Four or five years ago, the big fashion was “digital transformation”. Large companies claimed to be adopting “start-up mode”; they gradually appointed CDOs (chief digital officers), who had to find their place between general management, IT, marketing or communication in the broadest sense. And sometimes with a more innovative role as a facilitator for a limited mission.
This fashion was essentially due to three factors.
First, financial fantasies, with the image of global start-ups valued ten or a hundred times more than traditional companies after only a few years in existence (while carefully forgetting, or denying, the thousands of aborted attempts and the lost investments that went with them).
Next, ego-driven fantasies, with the image of a purely “intellectual” business creation and therefore of a necessarily “intelligent” founder – in keeping with our times’ disaffection for the “dirty” jobs of manufacturing, which is nonetheless necessary and often takes place in clean rooms.
And finally, the opportunities seen by suppliers of information systems and related services who, faced with the repeated failure of a mythical perfect integration of all information (with ERP systems), saw in this “digital transformation” a promising new market. These opportunities were also occasions for the companies being courted to show shareholders, staff and customers – through the level of investment involved – how “modern” they were; the choice in French of the word “digital” rather than “numérique” served the same purpose, an anglicism being necessarily “modern”.
The modernity proclaimed through this “digital transformation” aimed to respond to the threats of “disruption” posed by new entrants – digital “pure players”, hyper-growth start-ups. Direct threats to certain services, for which these newcomers were faster, more expert and cheaper. Indirect threats, by capturing the investment and talent needed for any value creation.
But what enabled the new entrants to achieve “disruption” was not the modernity of their tools – since the economic power of existing players would have allowed them to win the investment battle. It was, and still is, organisational and human in nature, with qualities and practices that conventional companies had sought, experimented with and sometimes implemented, but which new digital tools and social change (the link between the two being like that between the chicken and the egg) now make possible.
These changes are, broadly speaking, what characterises the abandonment of Taylorism and its developments, which still see people as machines to be optimised (but necessarily less efficient and therefore, eventually, replaceable): mechanisation, scientific management, roll-out of an ideally designed solution, lean management…
The limits of this scientistic, rationalist utopia have been shown since the beginning of the industrial era by accidents and sometimes disasters, including in the digital world; but the fantasy of hyper-reliability or zero risk still has its believers, although it is now fortunately being challenged by resilience approaches.
The practices of the new digital entrants have been described by many authors in recent years, with more or less talent and success. But beyond the fashions, they also go by fairly classic names: the extended enterprise (a network of contributors rather than a monopoly, APIs rather than ERP, the platform rather than vertical integration…), customer orientation and collaborative practices, project mode (design thinking being one combination of these), or experimentation combined with responsiveness (today’s agility, but also the “pivot” or the “minimum viable product”).
What these new practices have in common, when they succeed, is that they take into account both sides of information theory – since digital is above all information: a technological, engineering side, and a human side, with an organisational and functional dimension that makes it possible to better bring out talent.
The cultural “disruption” of moving to these two dimensions of digital transformation, if it is intended, is an extremely brutal shock for any organisation. Because it involves deep, complex changes, both technological and human. The question is indeed whether, honestly, one wants to – and can – move from a rationalised organisation born of the manufacturing era to “start-up mode”. Which means parting with long-standing talent to recruit others, deeply transforming one’s organisations, vocations and cultures – in short, entering a long and costly “valley of tears”, when speed is of the essence against an agile competition that is now powerful through its multiplicity, its resources and its skills.
Out of intellectual honesty, or out of awareness of the terror – and therefore the inevitable dysfunctions – that such massive changes, even merely announced, cause among most stakeholders (leaders, staff, investors, institutions, regulators…), some large companies have openly dropped the slogan of “digital transformation” and adopted terms that better describe their own transformations: technological acceleration, new management practices, fostering a partnership ecosystem…
These challenges, more limited a priori, are real transformation challenges in themselves. More reasonable, they offer no guarantee against competition (or even “disruption”) from new entrants. But they nonetheless demand real effort. Introducing cross-functional management practices, or post-heroic leadership, takes real courage and often a deep questioning of everyone. Working with more innovative, more effective external partners – and resisting the temptation to absorb them, and therefore kill them – takes humility and a constant struggle against bureaucratic reflexes. Accepting an incomplete design of one’s products and services, quickly improvable thanks to the contributions of the multitude (“crowd culture”), challenges the dogmas of infallible engineering.
But these transformations, openly embraced beyond the ego-flattering words, guarantee a certain stability conducive to business continuity, with significant improvements if the changes are genuinely implemented.
So, before embarking on a “digital transformation”, ask yourself what you really want.
Originally published in Le Cercle – Les Echos, 01/02/2018
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