Why do so many digital transformations fail?

Michael Graber – Innovation Excellence

This short post asks a question which falls to be answered all too often. The answer it gives is that failure comes from the misperception that the most important thing about digital transformation is that it is digital:

Digital transformations are actually transformations of mindset, business model, culture, and operations. These are people problems, in the main, not technology issues.

Clearing the fog: Using outcomes to focus organisations

Kate Tarling and Matti Keltanen – Medium

This post is a deep and thoughtful essay on why large organisations struggle to find a clear direction and to sustain high quality delivery. At one level the solution is disarmingly simple: define what success looks like, work out how well the organisation is configured to deliver that success, and change the configuration if necessary – but in the meantime, since reconfiguration is slow and hard, be systematic and practical at developing and working through change.

If it were that easy, of course, everybody would have done it by now and all large organisations would be operating in a state of near perfection. Simple observation tells us that that is not the case, and simple experience tells us that it is not at all easy to fix. This post avoids the common trap of suggesting a simple – often simplistic – single answer, but instead acknowledges the need to find ways of moving forward despite the aspects of the organisational environment which hold things back. Even more usefully, it sets out an approach for doing that in practice based on real (and no doubt painful) experience.

If there were a weakness in this approach, it would be in appearing to underestimate some of the behavioural challenges, partly because the post notes, but doesn’t really address, the different powers and perspectives which come from different positions. The options – and frustrations – of a chief executive or board member are very different from those elsewhere in the organisation who may feel some of the problems more viscerally but find it harder to identify points of leverage to change things. The argument that in the absence of structures aligned to outcomes and goals we should fall back to alignment around purpose is a strong one, but the challenge of even achieving the fallback shouldn’t be underestimated.

It’s a pretty safe bet though that anybody struggling to find ways of helping large organisations to become fully effective will find ideas and insights here which are well worth reflecting on.

Why Futurism Has a Cultural Blindspot

Tom Vanderbilt – Nautilus

This post is more a string of examples than a fully constructed argument but is none the worse for that. The thread which holds the examples together is an important one: predicting the future goes wrong because we misunderstand behaviour, not because we misunderstand technology.

A couple of points stand out. One is the mismatch between social change and technology change: the shift of technology into the workplace turned out to be much easier to predict than the movement of women into the workplace. That’s a specific instance of the more general point that we both under- and over-predict the future. A second is that we over-weight the innovative in thinking about the future (and about the past and present); as Charlie Stross describes it, the near-future is comprised of three parts: 90% of it is just like the present, 9% is new but foreseeable developments and innovations, and 1% is utterly bizarre and unexpected.

None of that is a reason for abandoning attempts to think about the future. But the post is a strong – and necessary – reminder of the need to keep in mind the biases and distortions which all too easily skew the attempt.

The Ultimate Guide to Making Smart Decisions

Shane Parrish – Farnam Street

Who could not want not just any guide to making smart decisions, but the ultimate guide? That’s a big promise, but there is some substance to what is delivered. The post itself briskly covers categories of bad decisions before moving on to extensive sets of links to material on thinking in general and decision making in particular. I can’t imagined anyone wanting to work through all of that systematically, but if you need a way of homing in on an aspect of or approach to the subject, this could be a very good place to start.

The four types of strategy work you need for the digital revolution

Josef Oehmen – LSE Business Review

The world is probably not crying out for another 2×2 typology of strategy, but nevertheless still they come. This one is interesting less for it cells than for its axes. Degree of uncertainty is fairly standard, but degree of people impact is slightly more surprising. The people in question are those within the organisation being strategised about – is the relevant change marginal to business as usual, are jobs and careers at risk, how much emotional stress can be expected. All those are good questions, of course, and the approach is certainly a good counter to the tendency to see people as machine components in change, and then to be surprised when they turn out not to be. But it risks muddling up two rather different aspects of the people impact of strategy – those who conceive of the strategy and execute its projects on one hand, and those who are affected by it on the other – and raises the bigger question of whether an internal people focus is the best way of understanding strategy in the first place. And the answer to that feels more likely to be situational than universal.

Perhaps though it is the matrix itself which gets slightly in the way of understanding. This is not an argument that organisations choose or discover which cell to be in or by what route to move between them. Instead:

Our impression was that the most successful companies had learned to execute activities in all four quadrants, all the time, and had robust processes for managing the transition of an activity from one quadrant to the other.

How to be Strategic

Julie Zhuo – Medium

This is a post which earns itself a place here just by its title, though that’s not all that can be said in its favour. It doesn’t start very promisingly, setting up the shakiest of straw men in order to knock them down – does anybody really think that ‘writing long documents’ is a good test of being strategic? – but it improves after the first third, to focus much more usefully on doing three things which actually make for good strategy. As the post acknowledges, the suggestions are very much in the spirit of Richard Rumelt’s good and bad strategy approach. So you can read the book, read Rumelt’s HBR article which is an excellent summary of the book, or read this post. Rumelt’s article is probably the best of the three, but this shorter and simpler post isn’t a bad alternative starting point.

Too Many Projects

Rose Hollister and Michael Watkins – Harvard Business Review

The hardest bit of strategy is not thinking up the goal and direction in the first place. It’s not even identifying the set of activities which will move things in the desired direction. The hardest bit is stopping all the things which aren’t heading in that direction or are a distraction of attention or energy from the most valuable activities. Stopping things is hard. Stopping things which aren’t necessarily failing to do the thing they were set up to do, but are nevertheless not the most important things to be doing, is harder. In principle, it’s easier to stop things before they have started than to rein them in once they have got going, but even that is pretty hard.

In all of that, ‘hard’ doesn’t mean hard in principle: the need, and often the intention, is clear enough. It means instead that observation of organisations, and particularly larger and older organisation, provides strong reason to think that it’s hard in practice. Finding ways of doing it better is important for many organisations.

This article clearly and systematically sets out what underlies the problem, what doesn’t work in trying to solve it – and offers some very practical suggestions for what does. Practical does not, of course, mean easy. But if we don’t start somewhere, project sclerosis will only get worse.

All design is strategic

Ben Holliday – Medium

In this post, Ben take the approach to strategy set out in Lingjing Yin’s post and applies it to design, making the argument that from that perspective, all design is strategic (though not only strategic), because it should always be in pursuit of the overall objective. That sounds right – though it does bring a risk of circularity (like any other word, as soon as it means everything, it means nothing).

The strong part of the argument is that no one aspect of design should be singled out as being strategic or not strategic. That’s a useful thought in part because it applies to more than just design: in a sense, the very point of strategy is to create something which provides a basis for decision makers of any kind to test their approach. The existence of a strategy is what allows all the individual decisions to be strategic without being regimented. And once that’s in place, it also becomes possible to zoom between levels of detail and perspective, as Matt Edgar observed, prompted by Ben’s post:

It is not possible in any kind of complex system to use strategy as a detailed control system; psychohistory is not real. It is possible to set principles which allow autonomous decisions and decision makers to converge on strategic goals. In that sense, at least, all design can be strategic.

What is strategy and the importance of strategic thinking

Lingjing Yin – Leading Service Design

This is a neat and simple exposition of what strategy is and why it matters. It earns a place here not so much for the description of what strategy is as for the reminder – too often missing from such descriptions – that strategy should have an impact, and that that impact should include driving choices about priorities and activities.

Ben Holliday has now used that post as a prompt for one of his own, which is picked up in the next post here.

Need a strategy? Let them grow like weeds in the garden

Henry Mintzberg

What counts as good strategy – and good strategy making – is a subject of endless debate, up to and including the limit argument that having a strategy at all is a sign of failure. This post is a good reminder to people with strategy in their job titles (and blog titles) that clarity and direction are not the only characteristics of a good strategy. It’s always possible to write a pithy description of an organisation’s future, but being easy doesn’t necessarily make it the best approach. Strategies can emerge from below, they don’t have to be imposed from above.

Strategies grow initially like weeds in a garden; they don’t need to be cultivated like tomatoes in a hothouse

Designing public services for Mars

Eddie Copeland – FutureFest

This is a session pitch for an event which has not yet happened, so it’s a tantalising paragraph rather than a developed argument. But it’s getting a mention because of the power of the thought experiment which lies behind it. Maybe the day will come when the design of public services for Mars will be an immediate and necessary question demanding answers. But we don’t need to wait for that day to ask what it would be like to design public services if we were not constrained by everything which has gone before – which ends up being very similar to Ben Hammersley’s provocation. Down here on old Earth we can’t wish away the installed base, which makes things harder (though we do have a breathable atmosphere, which balances things out a bit), but we don’t have to let our goals be constrained by it.

Diversity and Inclusion in the Civil Service – You’re Welcome

Cat Macaulay – Swimming in Stormy Weather

The questions you didn't know existed are the ones you most need to answerStrategy can easily be seen as a grand and abstract thing, considering people as components of a system if it considers them at all. Strategic change, on that view, involves doing big things, which typically take a long time.

That’s not the only way of thinking about strategy, of course. Human-level strategy can result in many small things being done – but which may eventually result in a degree and depth of change greater than any big change can produce (though it may well still take a long time).

That reflection is prompted by this post, which is both a very personal story and a description of the modern civil service. Nobody would pretend that the civil service is a paragon of every organisational virtue, but it is striking how far it has changed in composition, attitudes and priorities. That all matters a lot. It matters obviously because it shows an organisation at least striving to respect the diversity of the people who make it up. It matters less obviously – but very importantly – because strategic questions understood in the traditional grand way are answered by people who unavoidably bring the experience of their lives to doing so. Diversity is not a soft-edged slogan. It is not even just about respect for individuals. It is a dimension of strategic competence.

Why digital strategies fail

Jacques Bughin, Tanguy Catlin, Martin Hirt, and Paul Willmott – McKinsey

This article will inform and irritate, with the balance between the two being a matter of individual taste. It’s good of its kind, but its kind is putting organisations to right through the perspective of high consultancy, and nobody does it higher than McKinsey. It is taken as a self-evident truth that

Few of us get around without the help of ridesharing and navigation apps such as Lyft and Waze. On vacation, novel marine-transport apps enable us to hitch a ride from local boat owners to reach an island.

The few of us who survive without novel marine-transport apps may find that veering on self-parody – or perhaps being unintentionally precise about who is intended to be encompassed by ‘us’ – but it is worth persisting. The five pitfalls which the article describes do cover some useful ground and there is recognition that different circumstances demand different responses.

But as we have seen in other contexts, there is a sense of breathlessness about the word ‘digital’ itself. Their definition isn’t a bad one, ‘the nearly instant, free, and flawless ability to connect people, devices, and physical objects anywhere,’ but the more the article goes one, the less adequate it seems in relation to the scope of what is being asserted for it. In the end, ‘digital’ becomes irrelevant – this is about strategy in the broadest and deepest organisational sense.

One telling point is the use of Tesla as an example of the power of first mover advantage. While it’s clear that they do have real advantages in electric power, it’s also increasingly clear that they have failed to establish such an advantage in autonomous driving and failed even to reach incumbent standards of vehicle mass manufacturing. Where that leaves its overall strategic position has still to play out, but it is far from clear that it is less vulnerable to incumbents than they are to it. In a very concrete sense, there is more to strategy than digital.

Contradictions of government and its impossible standards

Martin Stewart-Weeks – The Mandarin

If it is hard to think and act systemically about the long term, it’s also worth reflecting on patterns of behaviour which get in the way even of the attempt. The rhetoric of innovation, of openness, of fearless honesty runs into a reality which seems designed to punish and constrain precisely those behaviours. And of course ‘design’ is precisely the wrong word here: these characteristics are emergent rather than intended (which does not, of course, mean that it would be impossible to design them to be different). There are many reasons why that is an unfortunate state of affairs, one which is rightly given some emphasis is that it risks crowding out the strategic and the systemic:

The real dilemma is that we’re so busy honing the efficiency of the pieces that we’ve failed to work out how to put the puzzle together or work out what the puzzle is or should be.

Exploring change and how to scale it

Pia Waugh – Pipka

This is a characteristically excellent post, examining in some detail both what it takes for change to succeed and, perhaps even more importantly, how to scale it.

The short answer is that if you want to change the system, you have to change the system. And to do that on the fifty plus year scale which is the level of ambition behind this post, requires rigour and discipline. Five questions are set out, including the two which are the most critical: what future do you want? And what are you going to do today?

Scaling from an idea of the future to systematic government and national level change can’t be done by exhortation – and simple observation suggests can only with the greatest difficulty be done at all. The recommendations here are an intriguing mixture of the very slow burn (supporting long term varied career development, to reduce aversion to new thinking) to the much more immediate (mandating the use of user research in funding bids).

All that still leaves the question of how best to start this whole process, but this is a manifesto of what should be done, or rather how it should be done; it doesn’t purport to be a set of instructions for making it happen.

The perils of bad strategy

Richard Rumelt – McKinsey Quarterly

If we want to create a good strategy, there is some value in understanding what makeas a bad one. This paper sets out to do exactly that and ends even more helpfully by reversing that into three key characteristics of a good strategy – understanding the problem; describing a guiding approach to addressing it; and setting out a coherent set of actions to deliver the approach. This is a classic article – which is a way of saying both that it’s a few years old, while also being pretty timeless. It derives from a book, but as is not uncommon, the book is very much longer without adding value in proportion.

Are we still talking about digital transformation?

Gavin Beckett – Perform Green

Apparently we still are. Whether we should be is another matter. There is certainly a strong case against ‘digital’, my version of which was made in a blog post a couple of years ago, which stated firmly

Digital transformation is important. But it’s important because digital is a means of doing transformation, not because transformation enables digital.

That leaves us with ‘transformation’. Is that a word with enough problems of its own that we should avoid it as well? The case against is clear, and is well articulated in this post: transformation carries implications of one massive co-ordinated effort, of starting with stability, applying the intended change, and then returning to a new and better stability – and none of that happens in the real world. Instead, it’s better to see change from a more agile perspective, neatly summarised in a line quoted in the post

Approaching change in a more evolutionary way may be the best way of making effective progress.  Small steps towards a bigger picture, with wiggle room to alter the path.

Sometimes, though, that bigger picture is big enough to deserve being called transformational. Sometimes the first step is possible only when there is some sense of direction and of scale of ambition. Sometimes radical change is what’s needed – it’s not hard to look around and see systems and organisations crying our for transformation. We should be cautious about discarding the ambition just because, too often, the means deployed to achieve it have fallen short.

Indeed, perhaps the real problem with ‘transformation’ as word is that it has been applied to far too casually to things which haven’t been nearly transformational enough in their ambition. If digital transformation is to mean anything, it has to be more than technology supported process improvement.

Strategic thinking with blog posts and stickers

Giles Turnbull

Strategic thinking is best done by thinking out loud, on your blog, over a long period of time.

As someone clocking in with over a thousand blog posts of various shapes and sizes since 2005, that feels like a box well and truly ticked. Whether that makes up something which might be called strategic thinking is a rather different question – but that may be because all those blog posts have not yet generated a single sticker.

There’s an important point being made here. Even in a more traditional approach to strategy development, the final document is never the thing which carries the real value: it’s the process of development, and the engagement and debate that that entails which makes the difference. The test of a good strategy is that it helps solve problems, so as the problems change, so should the strategy. Whether that makes blog posts and stickers a sufficient approach to strategy development is a slightly different question. There might be a blog post in that.

Management vs managerialism

Chris Dillow – Stumbling and Mumbling

And along comes another one, on similar lines to the previous post on strategies, this time decrying managerialism. Management is good, managerialism tends to unjustified and unbounded faith in management as a generic skill, to imposing direction and targets from above – and to abstract concepts of strategy and vision. As ever, Chris Dillow hits his targets with gusto.

Another way of putting that is that there is good management and bad management, and that there is not enough of the former and too much of the latter. That sounds trivial, but it’s actually rather important: is there a Gresham’s law of management where bad displaces good, and if there is, what would it take to break it?