Prerequisite for Digital Transformation

The business today is crazy about Digital Transformation. Everybody is seeking how his business will look like in the future. The world is focusing even more on Information Technology. Internet of things, block chain, big data, cloud computing and all kind of digital services and devices are fancy.

Do we not forget about something?

Just more IT does not make a revolution

We got used that IT drives innovations over the past decades. Hence, we expect that this is the case for Digital Transformation as well. Consequently, it would not be a revolution, but just more of that what we have already. The same error in thinking is behind Industry 4.0, where just more automation and IT should lead to a revolution.

What all experts agree is, that the complexity will increase dramatically and cross-functional knowledge is a major success-factor.  Therefore, the solution in our current world is to introduce new roles like the Chief Digital Officer (CDO), just to cannibalize the current CIO. We often hear that the CDO will become the future CEO. He/she is mastering the complexity and brings the cross-functional knowledge to transform the company to the new digital age.

However Digital Transformation has much to do with decentralising of today’s central authorities allowing completely new business models. This means that it is much less about IT problems but more about innovation in business models – supported by IT. Building a parallel IT department to the IT operations department may not be a promising step forward.

The real success factors for a Digital Transformation

What currently all forget about is the readiness of the society and the organisations themselves. Actual studies show that IT is not even on the list of challenges the organisations will face. The core challenges for Digital Transformation are:

  • Complex structures of multiple silos with competing interest have to be reorganized as interdisciplinary work will become crucial
  • Inappropriate company and management culture — where everyone has a different, even personal agenda — led to an inside-out view. This has to be replaced by a leadership culture that allows real innovation with an outside-in view
  • Driving innovation is only possible with the access to talents and the use of all employees’ knowledge.  Commitment to empowerment — the new source of innovation — replaces top-down approaches. This means allowing learning of new skills and adaption of cultural, social and generational perspective
  • Too heavy business processes and long-standing development methods are ill-suited. The performance has to increase dramatically as the speed of change will be much higher.

I found the sentence: “… the organisations have to become more agile and responsive in its ability to identify opportunities and threats“. I think a lot of managers read this sentence. That is why I hear a lot of them saying that they and the whole organisation are now agile. This is the same as in the last century when all companies tried to introduce high-performance teams. They were not successful as they did not understand the underlying principles.

Read more in the post the Mother of Principles in next-level-organisations.

The real revolution behind the digital transformation

Especially interesting is the research on management models from Frederic Laloux (next level organisations). He discovered that all major “revolutions”, like the industrial revolution, were going together with a major change in the management. Our current management style and the belief in hierarchical organisations was born in the industrial revolution. A real revolution — like the digital transformation — calls for the change of our understanding of management and organisation. These proposed changes perfectly fit to the above challenges:

  • High complexity cannot be mastered by an elite
  • Cross-functional knowledge demands efficient team skills
  • Teams cannot perform and be effective if they are not empowered
  • Disengaged employees are not performant if they are overruled by hierarchical management in today’s bureaucracies

As a conclusion, it is not the employees or the managers that have to get agile. It is the organisation that need first to transform to a next level. And here we found the real prerequisite for digitalisation. Even more, it is the main blocking point in most of today’s organisations to move forward.

Vision, revolution or reality?

It sounds of course unrealistic to change our hierarchical organisations. We would need to change the roles, responsibilities and importance (including the salaries) of the management. This looks like a visionary dream – a naive illusion.

But is it not exactly this what is happening in a real revolution that something new, absolutely unexpected is happening?

I can reassure you: the revolution already arrived. There are organisations that work completely without order and command — in fact without managers — but not without management. They work with self-management.

Read more about this in the post about organisations of the next level – coming soon. Go and subscribe to the blog and get informed when it is published





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