Most digital transformation strategies are neither strategic nor transformational.
Michael Porter, the famous Harvard Strategy Professor said “If we’re satisfied with vague strengths and weakness lists, we’re not thinking very clearly about strategy”. “There’s a distinction between operational effectiveness and strategic positioning”.
“Should we be on the cloud or have our own servers? That’s an operational effectiveness question. What we understand is that operational effectiveness is not strategy”.
Yet when we look at most digital transformation strategies, especially those posed by technology providers, they all focus on operational improvement. Saving money. And so they should, just don’t call them strategies and it’s a real stretch to call them transformational as most of the time they are simply digitising analogue processes.
Strategy is about making choices that change your business to create a differentiated proposition in the marketplace. If what you’re doing doesn’t affect your stated value proposition, it’s not strategic. Moreover, if it’s not changing your business culture, it’s not transformational.
This mistaken belief that what we have is a transformation “strategy” is caused because we often rely on old school analogue frameworks and thinking. A checklist isn’t a digital transformation framework. Nor is a set of processes, power statements, arrow diagrams or subjective quadrants. A digital transformation framework must be digital, powered by living, changing data that informs decisions and changes actions based on evolving evidence. The Ionology digital transformation framework is one such data driven strategy framework.
So when is a strategy a ‘digital transformation strategy’?
When it’s a deliberate plan of action around making an organisation that is built to change, innovate and reinvent rather than simply enhance and support the traditional methods.
Digitising the existing methods, whilst admirable and advisable, is not transformational. If the very culture of the organisation is unaffected, if people aren’t thinking digital, then the organisation is simply a digital version of its former self and will struggle to compete when faced with new changing competitive threats.
Digital Transformation starts with the leadership mindset. Alan Murray in his book The Wall Street Journal Essential Guide to Management, says that when it comes to culture change, “Start the change process with people who have disproportionate influence in the organization.”
If the business leaders haven’t upgraded their thinking by taking some sort of digital transformation course for leaders, then they stand less chance of creating the culture required to power their short term strategies and drive their long term relevance and success.
