Transform, Yes, But It Must Be Deeper Than Digital
With big tech no longer the shining star, it’s time to change the playbook of digital transformation
What if you are in the middle of a digital transformation, and you realize the digital age has just ended?
It certainly looks like the thrill is gone, given the recent scandals and subsequent techlash(Uber, Theranos, Cambridge Analytica), the crash and burn of Facebook’s stock, and the mishaps of everybody’s ex-darling, Elon Musk, who has been struggling lately to maintain his visionary cool.
But make no mistake, Big Tech is here to stay, and it’s way too soon to write a swan song, as Farhad Manjoo just pointed out in the New York Times. On the other hand, however, some fundamental unease remains, most prominently expressed by Silicon Valley dissidents like Tristan Harris, Sean Parker, or Jaron Lanier, who all highlighted the shortcomings of the dopamine-fueled attention economics of digital platforms.
This shift in zeitgeist is also changing the playbook for companies undergoing a digital transformation (that is, the rest of the business world). How do you transform — often in direct response to the kind of actual or anticipated disruption represented by Silicon Valley — and emulate the best from tech while at the same time driving your organization towards a new form of relevance that already transcends it?
Many of the digital transformers had previously fallen back on mimicking qualities typical of Silicon Valley culture: risk-taking, open innovation, agility, speed, and performance-based metrics. While these are still desirable traits, smart leaders now prepare their organizations for an economy that will be more predictable (AI) and at the same time more elusive (humans). Purpose and values play a bigger role, and along with it, an appreciation for the bottom-of-the-iceberg invisibles that often make or break change in the long run: beliefs, relationships, emotions.
To achieve a Deep Transformation — a transformation that is profound; engages people intellectually, emotionally, morally, and spiritually; and enables organizations to create lasting value for and in partnership with their customers — you must look at new objectives and drivers of change:
Make data warm
Joe Schaeppi, co-founder and CEO of the startup 12 traits, believes that “our relationship with tech should be as warm and cozy as an evening with friends.” Ultimately, he argues, it comes down to our concept of data. “We’re moving away from an attention economy to an authenticity economy where we need to make data work to meet essential human needs rather than just triggering a quick burst of dopamine,” he told me.
His point is timely, against the background of GDPR, the new European data laws, heightened awareness and sensitivity around privacy, and calls for data sovereignty or even data labor unions. Using principles of clinical psychology, 12 traits aims to generate deep insights into user emotions, values, and personality. The company has focused so far on gaming experiences; it does not collect personal data and instead forms clusters of psychometric analytics, with the user retaining all data.
Experts have used the terms “warm” or “thick” data to describe this new paradigm: a combination of qualitative and quantitative data that serves humans better because it is more nuanced and rich on the one hand, and on the other hand gives them full ownership and control. Simply extracting personal data from customers is no longer good enough. As a company undergoing a digital transformation process, it is critical you develop your own theology of data: Which data do you believe in? How serious are you about using data primarily to meet human needs? What are the ethics guiding your data collection and use?
Make the change a change in the life of people
Rather than making a case for change based on competitive pressure or internal challenges, center your transformation narrative on how the desired change will help improve people’s lives.
In a recent brand strategy project for an innovation consultancy, for example, we often got stuck in analysis paralysis as were facing myriad positioning options. By bringing the conversation back to how the company’s new strategic positioning (“innovation as a craft anyone can learn”) would help its clients with their lives (“becoming more confident innovators with a much better chance to thrive in an age of AI and automation”), we suddenly had an effective tie-breaker that helped us get unstuck.
Finding higher ground is powerful: If your reason-to-be is your reason-to-change, if your cause is your change agent, chances are much higher your team will come on board. When Dutch caregiving organization Buurtzorg eliminated all job titles and instead empowered small teams of nurses to do whatever was in the best interest of the patient, staff, including former managers with senior titles, quickly embraced the change after recognizing that it would benefit the people they served. Indeed, cost per patient went down because nurses spent more time with them and made better decisions. Instead of abstract data sets, they relied on the intimacy of actual relationships.
Make culture your breakfast, lunch, and dinner
“Culture eats strategy for breakfast,” the famous adage goes. It’s become a cliché, but it’s oh-so-true. It’s your culture — that is, your values, stories, and rituals brought to life through an intricate web of human interactions every day — which attracts and retains talent and customers. If an employee leaves, they can take processes and IP with them, but not the culture. For competitors, too, it is much easier to copy a product or business model than the culture that created it. Deep transformation thus starts with taking symbolic action that only makes sense within your particular culture.
When online retailer Otto Group launched its digital transformation initiative (full disclosure, a client of mine), the management team introduced the concept of addressing colleagues on a first-name basis, which was nothing less than a revolution at this traditional German company in a country where colleagues refer to each other as Herr or Frau. But it worked: The new protocol signaled to every employee that Otto’s leadership was serious about change and that it started with them and would affect everybody.
Or take Google’s moonshot factory X, which breathed new life into Silicon Valley’s stereotypical “Fail Fast” meme by taking it a step further. X staff began to celebrate the teams that kill their projects. As a result, X encourages even more risk-taking and fosters a culture of psychological safety, which is a key characteristic of effective teams.
Deep transformation begins and ends with your culture.
Make the conflict visible
At an architecture firm I once worked at, there was a fundamental conflict between the traditionalists and the digerati: Was the firm an architectural design and planning firm or should it define itself as a strategic design firm and involve other disciplines, specifically AI and computational design? The transformation team externalized this hidden conflict as symbolic “cage matches” in which proponents of each camp fought a substantive, but playful rhetorical battle with each other. They then staged an event that resembled a marriage to reconcile opposing views while at the same time tolerating and celebrating the remaining differences.
Any transformation has a conflict at heart: the conflict between status quo and the new promised land, to begin with, as well as other (often hidden) agendas of various stakeholders. Naming and embodying the conflict enable you to absorb, embrace, or constructively resolve a deeper, underlying tension.
Make sure to have a plan A, B — and C
Plan A is to drive a carefully designed transformation from now to a future state, with precise check-in points along the way. Plan B is the messier divergent scenario and what is more likely to happen. Plan C is your own personal transformation. Research by the Altimeter Group asserts that change agents must undergo their own “hero’s journey” as part of a broader transformation process.
Dev Patnaik, co-founder and CEO of consultancy Jump Associates, once told me that at the outset of a long-term transformation initiative he had drafted a change plan for himself (“who do I want to be when the company has transformed?”) on a sheet of paper and put it in the top drawer of his desk. A couple years later, he pulled it out and read eagerly what had materialized — and what hadn’t: because of, well, Plan B. But recognizing his own need to change, in a symbiosis with the organization he led, had made Dev more receptive to the personal transformation demanded from his staff, and it helped him appreciate that the very act of transforming was perhaps more important than knowing and reaching a set destination.
Make sense of it like a sculptor
True change does not happen overnight, but the actions triggering change do. So be patient in terms of when the desired behavioral change will ultimately fully manifest itself — it might take months or years — but don’t confuse it with the actual duration of the change program. Sprints, used in software development and design to create, prototype, and stress-test new business models, product ideas, or customer experiences, can serve as an effective way to explore and align within change processes as well.
Having constraints, especially temporal ones, is often a boon to more streamlined decision-making. There is no reason to drag out a visioning process over several months, when the alternatives at hand can be identified and fleshed out over the course of a week. In management, we tend to distrust our gut feel, and by stretching out processes, we even diminish it further. If we allow for too much time for critical examination, we forget how we felt about a possible future in the first place — and that’s a problem.
Imagine you’re a sculptor. The one stone is all you have, and you must make sense of it. Meaning is created by molding and forming it. You can’t add anything, in fact, you can only take parts away and work with negative space. You can decide to look at the stone for three months and create a meticulous plan, or you can start sculpting now.
Transformation that lasts
Instead of uncritically adopting typical Silicon Valley traits and digitalizing your processes, the goal of your digital transformation should be this: to leverage technology to become a business that is sustainable because it benefits humans in a sustainable fashion. Only then will your transformation be deep enough to outlast the first emotional setback, the next fad, and the end of the digital age as we knew it.
This article was originally published by Inc.com.