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What is Digital Transformation?

What is Digital Transformation?

Everyone wants to talk about the digital transformation efforts that their organizations are doing.  They’re leading the way into the new digital age.  The problem is that what they mean by “digital transformation” isn’t clear, and it’s equally unclear how that helps organizations.

Agility and Resilience

If you were to pick two characteristics that organizations need today, agility and resilience are likely to top the list.  The pace of change has continued to accelerate in the last half-century, and it’s showing no signs of slowing.  Instead, it’s showing exponential growth rates, which means we must get better at adapting to change.  That is agility.

We also know that complex adaptive systems have very odd and unanticipated results.  Steel axe heads can lead to prostitution.  (See Diffusion of Innovations for more.)  As a result, organizations must find ways of being resilient when their business models are suddenly invalidated by the constant change in the market.  We’ve seen entire industries transformed by rapid changes.  Brick and mortar stores struggle for relevancy in an electronic commerce world.  Taxi companies – and car rental companies – are adapting to ride share applications like Lyft and Uber.  Commercial real estate is poised to struggle as the COVID-19 pandemic forced organizations to become more work-from-home friendly.

What’s the How?

The digital transformation is more than taking the existing processes and approaches to work and converting them from atoms to electrons.  It’s more than taking a facsimile (fax) based process and replacing it with a fax server and multi-function copier-scanner-printer devices.  It’s transforming how the organization works together.

Luminaries like Richard Hackman in Collaborative Intelligence explained decades ago that the measures of collaboration aren’t just the immediate output, it’s about how teams work together and their ability to learn and adapt.  He explained that it’s about changing the thinking and processes about how they work in Work Redesign.

In most organizations, digital transformation amounts to little more than converting paper-based processes into electronic processes – the same thing that we’ve been doing for three decades.  However, in some organizations, digital transformation is correctly formed as changing the way that people work together.

Social Knowledge

One of the ways that digital transformation can be effective is by unlocking the knowledge of the organization from the confines of personal email boxes – or in people’s heads – into social networking platforms that support the broad sharing of information.  The move is from the locked, “need to know” approach of security to open sharing, and it’s transforming the way that the businesses work, making it easier to get the knowledge resources necessary to be successful.

Exposed and searchable to everyone, knowledge and information makes it easier to mash up – or connect – multiple pieces of knowledge to solve a problem.  For many organizations, this is a radical change from the siloed and protected information that only a few people had.  People in large organizations attempted to leverage their personal networks to gather the knowledge they needed.

Social platforms and social network analysis on productivity platforms provide easier access to the information and knowledge necessary and, more importantly, break down the barriers that prevent people from adapting to changing market conditions.

Transformation and Change

The good news about good digital transformation is that it’s both possible and probable if you’re able to focus on developing the business characteristics of agility and resilience.  If you’re focused on the enabling factors like making the sharing of information easier, then you’re creating the soul of digital transformation in your organization.  You still must eliminate paper processes and things that require people to be in the same place – but that’s the how not the why.