Digital Leaders Blog

digital transformation (37)

The concept of Digital Operating Advantage is one of the key issues discussed during our ‘Leading Digital’ Masterclasses.

It refers to the way in which organisations can leverage the full potential of emerging technologies to streamline internal processes and systems, improve efficiency, reduce costs, building a more collaborative, cost efficient, agile, responsive, data driven organisation, ‘fit-for-purpose’ in a digital age.

The successful deployment of an Enterprise Social Media (ESM) platform is critical in this respect as highlighted in the video below.

 

The key term above is ‘successful deployment’. While ESM platforms have been adopted by many organisations as the cornerstone of their internal digital transformation, new research published in the MITSloan Management Review suggests that expected benefits in terms of knowledge sharing, collaboration and efficiency are seldom realised. The main reason for this is poor ESM implementation.

Key conclusions of the research are as follows:

  • Employees often ‘get lost’ during the implementation of ESM platforms because of the disconnect between technology and the cultural change required to leverage the full potential of these platforms.
  • ESM is too often introduced into workplaces as a siloed system. A more strategic approach is required with ESM becoming a core component of an organisation’s digital portfolio, fully integrated with and supportive of employees’ daily work.
  • Too often, ESM is added to an already tangled web of technologies meant to support communication and collaboration. The net outcome is that fewer than 30% of employees and only 8% of executives contribute to ESM on a regular basis.
  • As more organisations become attracted to the benefits of digital workplaces, IT departments are asked to equip employees with a rich and integrated digital portfolio including team collaboration software, project management tools, chat-based software, internal knowledge management systems, intranets and so on. However, in most cases, there is a failure to articulate and communicate to employees how they are expected to use these tools in their day-to-day, job-related tasks.
  • The failure to articulate and communicate runs the risk of employees becoming lost in the transition to a more social, collaborative way of working. Connecting to ESM platforms often requires employees to disconnect from existing patterns of communication and collaboration such as email. This is not easy to achieve and can create resistance to change unless managed properly. Weaning people away from their email comfort blanket is no easy task.
  • To increase adoption and improve efficiency, ESM should be established as the hub connecting multiple IT systems, business applications, collaborative tools and other digital platforms. With proper integration, using APIs, employees should be able to access all digital platforms such as the corporate intranet, email, directories, document-sharing tools, forums, blogs, wikis and third-party web applications seamlessly from the ESM platform. Most ESM platforms such as Salesforce Chatter, Microsoft Yammer and Teams, Facebook Workplace etc offer open APIs that enable interoperability between ESM and other information technologies.

In conclusion, the MITSloan research supports our own contention that successful digital transformation is not just about technology – it requires the effective integration of strategy, people, processes, systems, organisation, culture AND technology.

The failure to recognise these mutual dependencies is one of the main reasons why many attempted transformations will fail. The successful implementation of Enterprise Social Media within your own organisation is a cultural as well as a technology challenge.

Read the full article here.

As always, comment and feedback are very welcome.

Take care.

Jim H

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Following our recent post Charting the Digital Transformation Genome, a HBR paper examines the reasons why some high profile digital transformation programmes fail based on the experiences of compaies such as GE, Lego, Nike, Procter & Gamble, Burberry, Ford and others. All case examples of heavy commitments to digital capability development which failed to meeet basic financial performance objectives.

The authors present four main reasons for failure:

First, there are a very wide range of factors that impact on a company's performance as much or even more than digital. Managers, therefore, should not view digital as a panacea.

Second, digital is not just about technology. Successful digital transformation is an ongoing process of changing the way you do business. It requires investment in new skills, people, projects, infrastructure as well as IT systems. It involves the integration of people, technology and business processes, combined with digital leadership, continuous monitoring and intervention from the top.

Third, digital investments need to be calibrated to the readiness of your industry, both customers and competitors, have a clear strategic fit with overall corporate objectives and hardwired to value.

Finally, companies should be careful that the investment in digital does not destroy traditional sources of comptitive advantage. The prospect of launching a sexy technology-based business can be tantalizing but can result in executives paying too much attention to the new and not enough to the old.

You can access the full article here - Why So Many High Profile Transformations Fail.

 Take care.

Jim H

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According to Anthony Abbatiello, principal, Deloitte Consulting and global leader of Deloitte Leadership, $400 billion is wasted every year in failed digital transformations. Even though many companies profess to have digital strategies, they don’t fully understand what it’s actually going to take or haven’t pinpointed what they want the business to look like.

There’s also an element of “executive tourism” as senior managers see things they like in Silicon Valley and seek to cut-and-paste them into their own organizations.

So, they embark on “random acts of digital” rather than create a cohesive strategy. They invest in digital technology and are disappointed when the expected massive change (and returns) don’t appear.

Despite such failure rates, digital transformation can be successful. But, it’s going to take a mind-set metamorphosis to put digital DNA at the organization’s core. HR has a critical role to play.

Read the full article here.

Jim H

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Digital native companies have captured value from established businesses because of their innovative use and development of technologies, business models and customer experiences.

According to a recent study by McKinsey, however, an overlooked element in the success of these companies has been their use of next-generation operating models defined as:

"The continual effort to improve end-to-end customer journeys and business processes by applying advanced technologies and sophisticated operational methods in an integrated manner. The combination typically results in, or is built around, a business model that is new to the industry and allows the company to move, adapt, and scale quickly."

By applying next-generation operating models, traditional companies can develop the agility and customer focus needed to fend off challenges from digital natives.

As shown in the Infographic below, there are three main components to a next-gen operating model:

  • Continually improving the end-to-end customer journey with a clean sheet approach.
  • Establishing agile ways of working through journey-focused teams.
  • Integrating technology with operations by testing and learning.

Accelerating the shift to a next-generation operating model involves taking three mutually reinforcing actions at once.

The full article can be found here.

Take care.

Jim H

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MIT have recently published their Top 20 Sloan Management Review articles of 2017.

Not surprisingly, articles on digital strategy, transformation, AI and data analytics dominate the most popular reads. 

The Top 20 are listed below (click link to access each article): 

The Jobs That Artificial Intelligence Will Create

Reshaping Business With Artificial Intelligence

Analytics as a Source of Business Innovation

The Smart Way to Respond to Negative Emotions at Work

Achieving Digital Maturity

The Most Underrated Skill in Management

How Big Data Is Empowering AI and Machine Learning at Scale

The End of Corporate Culture as We Know It

Why Design Thinking in Business Needs a Rethink

Turning Strategy Into Results

Your Company Doesn’t Need a Digital Strategy

Corporate Sustainability at a Crossroads

What to Expect From Artificial Intelligence

‘Digital Transformation’ Is a Misnomer

The Five Steps All Leaders Must Take in the Age of Uncertainty

Harnessing the Secret Structure of Innovation

Five Myths About Digital Transformation

12 Essential Innovation Insights

How to Monetize Your Data

How to Thrive — and Survive — in a World of AI Disruption

More details can be found here.

Take care.

Jim H

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The 8 Types of Company Culture


Our previous blog post argued that people, organisation and culture NOT technology have become the main barriers to successful digital transformation. Many digital change initiatives faiI because of an over-emphasis on technology at the expense of people.

In the interesting video below, researchers from Harvard Business School present eight types of organisational culture with implications for digital change. management. Please click on the image to view the video.

Source: The 8 Types of Company Culture

Take care.

Jim H

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The third annual State of Digital Transformation Report (2017), by Brian Solis, provides an interesting overview of the extent to which organisations are investing in digital strategies, initiatives and operational models.

While a growing number of businesses are currently investing in innovation strategies to uncover new growth opportunities, most companies are not responding fast enough to keep pace with the pervasive changes taking place in consumer buying behaviour.

In many of the companies surveyed, there is a lack of digital leadership and purpose with most struggling with the technological and human challenges of Digital Transformation (DT).

The pace of innovation, in response to the rising expectations of constantly connected customers, is being held back by poor digital literacy, together with a short-term focus on costs rather than the long-term investment required to remain competitive.

Risk-averse company cultures, lack of urgency, politics, egos and fear have also emerged as major barriers to successful digital transformation.

Please see The 2017 State of Digital Transformation Report for a more detailed summary of key findings, with the full report being available as a pdf download.

Take care.

Jim H

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Interesting from the Harvard Business Review.

"Across industries and across countries, a small number of superstar firms are pulling away from the competition. They’re more productive, more profitable, more innovative, and they pay better.

But why are these companies doing so well? Are they out-competing their rivals, or are they using their size and influence to avoid competition altogether?

One answer to that first question shows up in study after study: superstar firms are succeeding in large part due to information technology."

Read more here.

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A useful reading list addition for the Digital Leadership workshops we run.

The Digital Transformation Playbook: Rethink Your Business for the Digital Age (Columbia Business School Publishing) 5 Apr 2016 by David L. Rogers.

The book is structure around 'Five Domains of Digital Transformation' as summarised in the extracts below: 

Customers - Digital technologies change how we connect and create value with our customers. We may have grown up in a world in which companies broadcast messages and shipped products to customers. But today the relationship is much more two-way. Buying behaviour, whether B2C or B2B, is now heavily influenced by customer-to-customer communication and reviews. Dynamic participation by and engagement with customers have become a critical driver of business success.

Competition - Digital technologies transform how we think about competition. Increasingly, we are competing with companies from outside as well as inside our industry, stealing our customers with new digital offerings. Competitive collaboration through a strong network of partners is becoming critical to sustained growth and profitability.

Data - In traditional businesses, data was expensive to obtain, difficult to store, and utilised in organisational silos. Today, data is being generated at an unprecedented rate with cloud-based systems for data storing becoming cheaper, readily available and easy to use. The biggest challenge today is turning the enormous amount of data we have into actionable insight.

Innovation - Digital technologies are transforming the way businesses innovate. Traditionally, innovation was expensive, high stakes and insular. Testing new ideas was difficult and costly, so businesses relied on their managers to guess what to build into a product before launching it in the market. Today, digital technologies enable continuous testing and experimentation, processes that were inconceivable in the past. Prototypes can be built for pennies and ideas tested quickly with user communities. Constant learning and the rapid iteration of products, before and after their launch date, are becoming the norm.

Value - Digital technologies force us to think differently about how we understand and create value for the customer. What customers value can change very quickly. Our competitors may be uncovering new opportunities that our customers value more. All too often, when a business hits upon success in the marketplace, a dangerous complacency sets in. As Andy Grove warned years ago, in the digital age, “only the paranoid survive.” Constantly pushing the envelope to find our next source of customer value is now an imperative.

Figure 1: Five Key Domains of Digital Transformation

 Take care

Jim H

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Does your Board of Directors grasp how disruptive technologies are reshaping your industry?

Are they driving and supporting your CEO in achieving digital transformation, leveraging the full potential of emerging technologies for building an efficient, agile, fast moving and responsive organisation fit-for-purpose in a digital era?  

Alternatively, is your Board sitting back watching as born-digital companies reinvent your industry? Are they playing safe, watching your organisation's slow decline into obsolescence?

A recent Harvard Business Review article argues that Boards must recognise the unstoppable digital forces at play in your industry, driving your CEO to reinvent the business while you still have the resources to do so.

To avoid becoming the Kodak of your industry, five key actions your Board should be taking now are identified.

Is you Board showing digital leadership in the following areas? I would guess NOT.

  • Get into high gear in understanding how digitisation affects the business.
  • Be sure you have the right CEO in place, someone with the knowledge and personal empathy to be a digital change leader.
  • Encourage the CEO to enlist whatever expertise he or she needs to re-imagine how the company could be rebuilt around a digital platform.
  • Prepare to defend the CEO against backlash from inside, outside and the investment community.
  • Beware of cold feet when implementing radical change to 'the way things have always been done around here'.

You can access the full article here.

Take care.

Jim H

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An interesting article, by Don Hinchcliffe, summarises the radical changes taking place in the 'learning' industry as a consequence of the digital and social media revolutions.

Digital, according to the author, can take learning in powerful, new and unexpected directions, fundamentally changing how we find knowledge and share information.  

The traditional approach to learning is still the norm in many cases, including the world of corporate education, with passive learners sitting in a classroom consuming pre-packaged content in bulk presented formally by an educator.

However, with the typical person today being far more likely to reach for their mobile phone to learn something, the digital and social media revolutions open up exciting new opportunities for learning to become more social, informal, self-service and enjoyable.

"Perhaps the single most valuable asset an organization has is its workforce. New forms of digital learning are making it possible to invest continuously in those workers to help them stay relevant, build skills, and be retained by their organizations."

The core theme of the article is summarised in the Infographic below.

The Digital Transformation of Learning: Community, Microlearning, Situated, On-Demand, Self-Service

The full article, well worth reading, can be found here.

Take care

Jim H

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In preparation for the MBA Digital Leadership workshops in Abu Dhabi and Bahrain, the following links will be useful.

Background

How Digital Disrupts Operations, Business Processes and Customer Experiences

Worldwide Spend on Digital Transformation Technologies to Reach $1.2 Trillion in 2017; $2 Trillion by 2020

The Utility Industry: Top Ten Transformation Technologies (Infographic)

Which Countries are Leading Digital?

Teaching Digital Leadership to the Digital Leaders

Digital Leadership and Performance

Digital Leaders Outperform Digital Laggards

The Case for Digital Reinvention

What the Companies on the Right Side of the Digital Business Divide Have in Common

Digital Leadership

Two Years On, Who’s Leading Digital? Probably Not Your Board

Business Leaders Are Losing Ground In 'Digital IQ,' New PwC Study Finds

Three Meaningful Strategies for Managing Rapid Change

Enabling Transformation: Technology AND Organisation are Key

Redefining Leadership for a Digital Age: The Four 'Must Have' Competencies of Successful Digital Leaders

The Next Generation Operating Model for the Digital World

How to Start Building your Next Generation Operating Model

Keeping Transformations on Target

Building a More Intelligent Enterprise

Business Transformation Starts with Leadership Transformation

Misc

Data Analytics and the Future of North Sea Oil Part 1

Data Analytics and the Future of North Sea Oil Part 2 Power BI

Do Oil and Gas Boardrooms Lack Digital Focus?

I look forward to meeting everyone.

Take care.

Jim H

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In our last post (Which Countries are Leading Digital), we highlighted evidence from several studies showing that the UK was falling behind many of our international competitors in a number of key measures of digital readiness.

One of these studies was the 2016 Digital Economy and Society Index (DESI) published by the EU. While the UK remained above the EU average in key measures such as connectivity, digital skills and the integration of digital technology, we were growing at a slower rate than the average. The Nordic countries of Denmark, Sweden and Finland, together with the Netherlands were leading the way, while Estonia, Germany, the Netherlands, Malta, Austria and Portugal were the fastest growing.

DESI 2017, published last week, confirms this deteriorating position.

While the UK continued to improve its digital performance across most key indicators, its relative position has declined from an overall ranking of 6th position in 2016 to 7th position currently.

The decline was accounted for by two main indicators – ‘Integration of Digital Technology’, a drop in the UK’s ranking from 14th to 15th position; and ‘Digital Public Services', where the UK experienced a substantial decline from 15th to 18th position.

Contrary to much public sector spin, the UK is not a world leading digital nation. We are very much positioned in the ‘Lagging Ahead’ category – a group of countries with good digital performance but whose current rate of development is now slow. As such, we are lagging in comparison to the progress of the EU as a whole.

Denmark, Finland, Sweden and the Netherlands have the most advanced digital economies in the EU followed by Luxembourg, Belgium, the UK and Ireland. Romania, Bulgaria, Greece and Italy have the lowest scores on the DESI.

As we become preoccupied with BITs (Brexit, Immigration and Trump), rather than BYTES, i would fully expect a further decline in our DESI ranking in 2018.

As always, comment and feedback are very welcome.

Jim H

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Yesterday, i read an article which appeared to leak a preview of the long-awaited National Digital Strategy for Scotland (updated).

I really do hope that i am 'jumping the gun' here but the article did raise alarm bells for me.

Based on comments from a Government spokesperson, it appears that the updated strategy will focus on four main areas - a commitment to data sharing; collaboration across the public sector; the appointment of a Digital Leader; and industry, academia, government collaboration on the digital agenda.  

Is that it? Is that our National Digital Strategy? 

For the sake of the Scottish economy, employment and future competitveness, i really do hope that i am wrong here.

Developing story.......

Take care.

Jim H

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Managing Digital Transformation

A recent article in the MITSloan Management Review has warned against looking for quick fixes when it comes to managing digital transformation.

In particular, three ‘superficial’ fixes should be avoided at all costs:

  • Avoid creating a transformation office unconnected to the rest of the organization: This will only create a culture of “cool kids” isolated from the rest of the workforce; as well as dismissing individuals already doing valuable transformation work elsewhere in the organization.
  • Avoid digitizing processes without rethinking the organization’s business model: Focusing solely on IT misses the point. A rapidly changing world requires new business models. Meaningful improvement must include transforming how the organization operates not just digitizing existing processes.
  • Avoid just hiring a lone “chief ________officer”: This pins the entire hopes of the organization on one individual. The reality is that organizational transformation is everyone’s responsibility.

Rather than looking for ‘quick fixes’, the article argues that there are three meaningful strategies that will deliver results:

  • Reward delivering results differently and better: Instead of striving to change organizational cultures head-on (an impossible task), the C-suite should actively support and reward those parts of the existing organization already delivering results differently and better. This will act as a catalyst for change.
  • Adapt organizational values and goals to the changing world, don’t just change mission statements: Focus on being nimble and adaptive to achieve agreed outcomes. Delivering results differently and better will ultimately transform organizational cultures.
  • Champion everyone across the organization to be positive change agents: Meaningful change happens across an organization when everyone realizes that anyone can become a change agent. There should be no need to be formally approved as an agent of change.

The six bullet points raised above have major implications for digital transformation initiatives across a broad range of sectors, including the public sector.

You can access the full article here.

Take care.

Jim H

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A fascinating new report has just been published looking at digital transformation at HMRC, the UK tax authority.

The report catalogues a series of errors which, it is claimed, have resulted in near meltdown of the UK tax system. There are very important lessons to be learned here for other public sector transformation projects; indeed for the private sector too.

Keynote Summary

  • HMRC launch a 'Building our Future (BoF)' programme to become the most ‘digitally advanced’ revenue service in the world. The core ‘vision’ is to replace phone and postal enquiries from members of the public and small businesses with automated online services. This will release staff from boring administrative tasks, processing forms or speaking with taxpayers. As a result staff will be freed up to work on more complex issues and retrained to tackle tax avoidance and evasion.
  • At least that was the 'spin'. The reality was thousands of redundancies and the closure of 170 HMRC offices located around the country.
  • Unfortunately the forecasts were wrong. The public kept calling and mail kept arriving. The reductions in staff numbers meant that the department became overwhelmed and standards of service to taxpayers collapsed.
  • To compensate for these failures management responded by heaping yet more pressure on staff, introducing a system of staff appraisals called performance management review. This and other management initiatives have simply led to more time lost to form filling and administration, further damaging the department's capacity to tackle tax evasion.
  • As a consequence of the above, the report argues that HMRC is at breaking point.
  • One of the main reasons for project failure is that improvements in service quality have never been at the heart of HMRC’s transformation programme. The primary driver of change has been to cut costs.
  • The report concludes that failure of 'Building our Future' poses a serious risk to tax collection in the UK, and with it, our public services.

A more detailed summary of the report can be found here.

You can download the full report entitled 'HMRC, Building an Uncertain Future' here.

As always, comment and feedback most welcome.

Take care.

Jim H

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Five key propositions emerge from the growing volume of publications on digital disruption and digital transformation.

1. In an era of pervasive digital change, no industry, no organisation, no individual is immune from the threat of being disrupted. Our FSB Digital Disruption Report from December 2015 listed a broad range of sectors under threat. The question is no longer whether your industry will be affected.  The only pertinent questions to ask now are how severe will the impact be (‘bang’) and over what time scale will this take place (‘fuse’) - see our previous post Will Your Industry Be Disrupted, also the Deloitte report entitled Short Fuse: Big Bang.

2. Most organisations remain woefully ill-prepared for the coming digital tsunami. The pace of digital change is taking place at a much faster rate than our ability to adapt. Various reports have warned of a growing ‘strategic gap’ between the digital progress being made by most organisations and where they should be to remain competitive. The challenge is not just a technology one. A wide range of internal barriers need to be overcome before successful digital transformation can take place - especially organisational, people and cultural barriers.

3. There is a growing need for a new breed of senior executive - Digital Business Leaders. Senior executives who can combine high level business knowledge, experience and understanding with the ability to develop digital transformation strategies fully aligned with and supportive of agreed business goals and objectives. Executives with the personal skills and confidence to drive organisational change. Almost every report on digital disruption published over the last three years has pointed to the lack of digital leadership and skills being major barriers to change.

4. The days of the business leader who knows nothing about technology (often proudly claiming that they know nothing about it) are numbered. In an era of rapid digital change and digital disruption, how can anyone claim to be ‘leading’ without understanding how technology is impacting on their industry, their organisation? Is it time to call time on non-digital leaders unwilling to adapt.

5. The growing need for Digital Business Leaders raises important implications for our education, skills development and executive education systems. While there is a growing recognition of the need for digital transformation, current industry leaders (with a few exceptions) lack the digital knowledge, understanding and confidence to drive change. Younger managers (digital natives) may have the technology skills and confidence required but lack the high level strategic understanding of how to fully align digital technology to support core business goals. Technologists, CIOs and others may be very good at what they do but may lack the leadership skills to drive change.

The core challenge facing all of our organisations is this - how do we prepare future leaders for the twin demands of management and digital technology?

Does our management development and education system require a complete reboot?

As always, feedback and comments are very welcome.

Dr Jim Hamill

Full details of our next Digital Leaders Masterclass in association with the University of Edinburgh Business School can be found here. You can register an interest in attending here.

 

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Digital leaders in the public sector need to address top-down, rigid management hierarchies that stifle innovation according to a recent briefing note from Socitm, the organisation for public sector IT professionals.

For digital transformation to be effective, Councils need to embrace new ways of working. The 'status quo' is not an option. Digital leaders need to embrace new thinking and quickly.

The briefing note argues that traditional top-down management hierarchies are unlikely to work well in the digital age and stifle innovation. Digital leaders need to establish a culture of change and improvement, managing teams by outcomes rather than inputs.

Old constraints about when and where work should be done are often inconsistent with new digital thinking and ways of working. They are born of rigid hierarchies and top-down command and control. Employees should be treated as valued, responsible and well-motivated adults.

The note also argues that digital leaders need to develop the skills to 'sell' digital ideas to relevant service managers and to advise leaders to embrace agile working.

Socitm acknowledges that many of their recommendations do not fit easily with the 'conservative' public sector. However, this needs to change if local authorities are to provide services that can cope with increasing demand.

You can read the full article here.

Hopefully these issues will be discussed further during the Socitm Scotland 2016 Conference taking place in November.

As always, comment and feedback are very welcome.

Jim H

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Genuine Digital Leaders Hard To Find

I have just read a very hard hitting article by Ben Rossi on Information Age entitled ‘Why these people need to be kept away from digital transformations’.

The article issues a strong warning about the growing power of Digital Emperors defined as ‘those in the public and private sectors who are exploiting the digital wave for all its worth in spite of having no real domain knowledge, leadership capabilities or strategic vision’. The list includes politicians, civil servants, corporate execs, trade show promoters (but not Scot-Tech in my view, these guys ‘get it’),digital start-ups and venture capitalists.

The reality, according to the author is quite different:

‘Most are complete phonies or digital posers, and all suffer from a common challenge: they are digital emperors without any clothes. Genuine digital leadership is hard to find these days in any sector, but those who believe that either by title or remit that they are true leaders can be found either at every trade show or digital event (TED, SXSW, etc.) espousing their well-rehearsed opinions on all things digital.’

Ben argues that very few of these Digital Emperors have anything of substance to say or actual accomplishments (other than spending billions on transformation projects and getting little in return). Nonetheless, 'they all seem to have a cult-like following of sycophants and others who fawn over everything they promise, say or do.’

Digital Emperors are frequently found in the public sector.

‘Across the globe there are major programmes in virtually every government to digitally transform services and capabilities provided internally and to their citizens. Many of these programmes portend to transform governments themselves using what I refer to as ‘digital transformation by magic’, a common thought process where a digital emperor can simply undo the past and, armed with a great PowerPoint and some funding, they can create a new digital future for everyone overnight. In reality, it turns out to be more of a digital love fest where everyone spends their time in endless self-promotion and glory seeking while the group squanders countless fortunes on technology that users want nothing to do with at the end of the journey.'

Ben concludes that transformation is hard and not for the weak of heart. Successful digital transformation is yet to be realised anywhere. Leaving transformation to the fatuous behaviour of digital emperors is clearly a formula for disaster.

WOW.

You can access the full article here.

As always, comment and feedback are very welcome.

Jim H

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If you’re not turning your company into a “math house” you’re headed for serious trouble. Every industry will soon be driven by digitization and every winning company will be using algorithms, or mathematical rules for processing information, to shape the end-to-end customer experience. Any advantages you have now will pale in comparison with a great set of algorithms that differentiates the customer experience. It is the algorithms that will create value for the business.

This is not guesswork. Sensors, the cloud, mobile and broadband wireless, and other such technologies are increasing the flow of digitized information exponentially. Algorithms, run on ever faster computers, can do amazing things with that information, from detecting patterns and making predictions to solving complex problems. They can even modify themselves as new information comes to light. 

More such catalysts are entering the fray every day. Venture capitalists have their radar out for and provide ample resources for the catalysts to scale up very quickly. The result is the reconstitution or destruction of industries, creation of new market spaces, and reshaping of old industry ecosystems.

Some leaders will ignore the trend, as happened at Nokia, or remain on the defensive, as reflected in Walmart’s delayed response to Amazon. But others know it is not going away and that they have no choice but to transform the company. That realization creates more anxiety than insight into what to do. CEOs are on the hunt to understand who has done what, and who has succeeded. They want to know, does a legacy company really have a chance of transforming itself into a math house? Can it do so at the speed of a start-up? Yes. On both counts.

The above quotation is taken from a recent article in the Harvard Business Review by Ram Charan entitled How To Transform a Traditional Giant Into a Digital One. The article examines the leadership lessons to be learned from the digital transformation of GE, the only surviving member of the original Dow Jones Index of 1896, showing that it is indeed possible to transform a large, traditional business despite the many obstacles and barriers to be overcome. 

There are important lessons to be learned here.

Jim H

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