You say you want a revolution
Well, you know
We all want to change the world
You tell me that it’s evolution
Well, you know
We all want to change the world
The Beatles (1968)
What makes a revolution?
At the end of the nineteenth century the advent of electricity as a technical innovation revolutionised industrial plant design, yet factory owners continued to build their places of work next to rivers.
Well they were simply blind to the affordances of the new technology, and failed to grasp the possibilities that it offered.
Some one hundred years later, it is equally clear we are now in the midst of what is a second industrial revolution; one that is severely challenging the integrity of the traditional hierarchical organisation – a way of structuring organisations for much of the 20th century.
New models are materialising and challenging traditional organisations substantially; and, rather like the factory owners of yesteryear, they are being forced to rethink their strategies in the light of changed conditions.
Yet this is not easy.
Digital transformation is a complex undertaking that means not only building digital and leadership capabilities to make it happen, but equally adopting new internal ways of working that reflect the new customer realities. With initiatives such as lean design, minimum viable products, continuous improvement and evidence-based decision making all being examples of new ways of doing things that now run counter to traditional hierarchical and process routines that simply aren’t valid any more.
Now for the first time in more than a century the management team of the traditional organisation is now being forced to seriously re-examine their assumptions of what constitutes the best way to work. In effect, they must be prepared to disrupt themselves internally.
The nature of change in digital transformation
So how can businesses successfully transform themselves in a world gone digital?
It is now clear that digital transformation often requires business change on a grand scale. It involves not just technology adoption but also change in business operations and processes, standard operating procedures, and even in the self-image of an organisation that employees consciously and unconsciously adopt.
To achieve radical change it appears that new “organisational patterns” are required for digital mastery, and that many organisations do, in fact, need adopt new ways of working.
In particular, they seem to need to evolve from being less hierarchical in their management practice to being far more empowering, and equally they need to adopt business practices that are more agile and flexible, all the while attending to the challenging cultural issues that such business change represents in any setting.
1. From 20th century efficiency to 21st century responsiveness
In the industrial age, organisations were built in such a way that aimed at the highest degree of efficiency possible; a Fordist model that was entirely valid in a business environment that was stable enough to plan ahead for a long period of time.
In the age of the customer, with its constantly changing opportunities, this organisational model has become increasingly obsolete.
Instead, companies need to become more “responsive”.
Put simply, responsiveness is about trusting and empowering the people who actually do the work without centralised command and control. In effect, it is about reducing hierarchy, establishing trust, and embracing collective responsibility.
Traditional, efficiency-focused organisations are centred around secrecy, planning, and control, which makes change and innovation hard as it tends to rigidly lock in roles, processes and practices.
Instead, Pisoni recommends that organisations foster and support transparency, experimentation, and empowerment to enable innovation. Being responsive means empowering your employees, experimentation against new products and services, and introducing an open and cross-functional working environment that enables collaboration and reduces hierarchical mindsets.
Yet this change cannot be made overnight:
As Pisoni says, “You have to move the sliders in concert — and it’s not about moving everything all the way to the right. It’s about gradually moving, bit by bit, finding what works, and accepting that it’s going to be really uncomfortable for everybody.”
2. Adopting organisational agility
Closely related to the idea of becoming a responsive organisation is the concept of organisational agility.
In particular, the much publicised but less practised agile methodologies essentially describe a different way of working – following the idea of experimenting and innovating within a build test, and learn model.
Moving away from the traditional waterfall delivery model, it looks to incremental development, including releasing and testing prototypes to continuously learn in an iterative way.
Through experimentation and testing, organisations are then able to adapt more flexibly to what their customers really need and equally deliver better and more customer-focused products and services.
Basically it allows self-organising teams to better align to the problem to be solved, involve clients directly in the process, and to develop a mindset that promotes organisational agility in a very way to that of traditional models.
3. A new leadership model
What’s more, in this brave new world organisations have to re-assess their management practices, or, rather, their leadership practices.
Instead of retaining old ways of command and control with its emphasis on relatively inflexible structures, business leaders have to behave in ways that are far more agile themselves: trusting their employees to do the right thing and empowering them to reach their full potential.
Their business focus should be centred more on seizing opportunities at an organisational level rather than supposedly directing their employees at an operational level. Thereby acknowledging the fact that new realities require the organisation to constantly innovate and re-create new sources of business advantage.
4. And finally … a note on culture
So far in this post we have looked at the new organisational practices that companies ideally need to adopt to meet the changed realities of a digital world. Yet another key factor which can determine the failure or success of digital transformation is an organisation’s culture.
In order to effect significant business change – which is after all part and parcel of digital transformation – it is clearly important to understand something of how to analyse and shape an organisational culture that is conducive to the new realities. After all, it is obvious that an organisation’s culture should support the new ways of working required to achieve digital transformation rather than actually hindering it.
Yet changing organisational culture is not an easy thing to do (important disclosure: there are, in fact, people that doubt this to be possible at all). Nevertheless it is clear that achieving a culture that supports change rather than impedes it is of paramount importance to make sure digital transformation can succeed in any organisational setting.
Is your organisation ready to transform?
Every organisation is facing different challenges when trying to adapt to our new, digital reality. As outlined in this article, digital transformation implies a change in mind-set and processes, which affects various areas of an organisation.
To help you assess your organisation’s unique strengths and weaknesses and to formulate a strategy for your change process, we have created a tool kit that lists all aspects you have to examine when going digital.
Download our free tool kit and prepare your organisation for a digital transformation today.