Diving Deeper Into Digital Transformation

Category:Collaboration,Community,Context,Edges,Emotions,Exploration,Fear,Future,Growth,Institutional Innovation,Leadership,Learning,Opportunity,Passion,Potential,Small moves,Strategy,Transformation

Digital transformation has become a business buzzword. Everyone is talking about it, but there is a significant missed opportunity. To understand the missed opportunity, we first need to understand the context of the world we live in.

The Big Shift

Long-term forces are re-shaping our global economy and society in profound ways. I have done a lot of research on the Big Shift. It has many dimensions – one of them is the creation of exponentially expanding opportunities. We can create far more value with far less resources and far more quickly than would have been imaginable a few decades. But to do this, we will need to embrace broad business transformation.

From digital transformation to business transformation

Here’s the first problem. Virtually every large, traditional organization has a digital transformation program, but when you probe into what the program is doing, it turns out that virtually all of these programs are focused on applying digital technology so that the organization can do what it has always done, but just faster and cheaper.

Increased business efficiency may be helpful, but it is not business transformation. Business transformation starts with asking the most basic question of all – what fundamentally different business should we be seeking to become?

To answer this question, I strongly recommend that leaders adopt a very different approach to strategy, something I call the Zoom Out/Zoom In approach to strategy. This approach has many benefits, but one of them is that it takes leadership out of their comfort zone, and forces them to look for small moves, smartly made that they can pursue in the short-term to begin their journey to much more profound business transformation.

If we’re serious about pursuing exponentially expanding opportunities, everything in the business will need to change. We’ll need to shift from an institutional model of scalable efficiency to scalable learning. We’ll need to redefine work for everyone in the organization so that people are no longer performing tightly specified, highly standardized tasks and instead are focused on addressing unseen opportunities and problems to create more value. We’ll need to redesign our work environments so that they can support this new form of work. We’ll need to adopt different approaches to growth – rather than focusing on make versus buy as the two key growth options, we’ll need to embrace leveraged growth where the focus is on connecting our customers with a broader range of third parties that can help to address their unmet needs.

That’s profound change in all aspects of our current businesses. What are the barriers and obstacles to overcome? Based on my experience in helping leaders to pursue business transformation, I have only one piece of advice – never, ever under-estimate the power of the immune system and antibodies that exist in every large, traditional organization and which will mobilize at the slightest indication of change to resist that change.

These people are not evil people. They are very well-intentioned, but they are driven by the emotion of fear. They have become very risk averse and believe that the best way to succeed is to continue doing what has always been done to create value.

From business transformation to emotional transformation

To address this barrier and obstacle to business transformation, we need to dive deeper into another level of transformation – emotional transformation. How do we move beyond the emotion of fear to cultivate other emotions that will help us to have more impact that is meaningful to us? That’s the focus of my latest book – The Journey Beyond Fear. I wrote the book because I saw fear becoming more and more prevalent as an emotion around the world.

A key reason for the spread of fear is mounting performance pressure that is also generated by the Big Shift – competition intensifying on a global scale, pace of change accelerating and extreme, disruptive events emerging more frequently. While understandable, this emotion is also very limiting – people who are driven by fear can’t even see the exponential opportunities emerging in the future, much less have the motivation to pursue them.

How do we overcome this fear? We need to find and draw out a very specific form of passion – the passion of the explorer – that resides within all of us and is waiting to be drawn out.

It turns out that the Zoom Out/Zoom In approach to strategy can be very powerful in moving us beyond fear. It focuses people on a really big and inspiring opportunity 10-20 years from now and quickly provides evidence of progress towards that opportunity in the next 6-12 months to help overcome skepticism.

To make the journey beyond fear we also need to cultivate new leadership models – shifting from an expert model where the leader has the answer to all the questions to the explorer model where the leader is focused on sharing inspiring questions and asking for help in coming up with answers.

We also need to adopt different approaches to transformation. Rather than pursuing top down, big bang approaches that draw out the immune system, we should focus on scaling an edge that can become the new core of the business and will embrace all the changes required to pursue exponential opportunities.

Bottom line

Digital technology is a significant catalyst for the need for transformation, but we need to avoid becoming focused too narrowly on digital transformation. Instead, we need to dive deeper into business transformation and then recognize that will require an even deeper dive to a third level – emotional transformation.

This is a huge opportunity. It can help us to move from mounting performance pressure to exponentially expanding opportunity. It’s not just an opportunity – it’s an imperative given the rapidly changing world around us.

I am an optimist. I believe that we can and will move beyond the caterpillars that we are today, focused on just finding ways to move faster. Instead, we will all become butterflies in a thriving world.