“When I woke up just after dawn on September 28, 1928, I certainly didn’t plan to revolutionize all medicine by discovering the world’s first antibiotic, or bacteria killer” Sir Alexander Fleming. The World War 1 claimed many casualties who died from septic wounds. Sir Fleming, a Scottish biologist, pharmacologist and botanist invested time in looking for a solution to this. He actively searched for anti-bacterial agents. The solution didn’t arrive in one swoop. The then available antiseptics killed the patients’ immunological defenses more effectively than they killed the invading bacteria.
The breakthrough came in a rather unexpected fashion. Alexander’s research lab was described as untidy. He had stacked all his cultures in the corner of lab before going away on holiday. On his return, he noticed that one culture was contaminated with fungi. That contaminated culture was separated from the rest of the culture and grown as a mould to produce a substance that killed disease-causing bacteria. That mould from the “contaminated culture” was from the penicillum genus. This ground breaking discovery with further clinical tests and approvals saved the lives of many soldiers. It is said that penicillin was used to treat all the wounded members of the allied forces after the aftermath of Pearl Harbour.
Adapt or die
The term “digital transformation” has become common in the recent past. The tag line has been “adapt or die”. In the case of penicillin, while “analogue” antiseptics were the only option and a deadly one for that matter, this was the life saving “disrupter”. The “disruption” created by Fleming’s tireless efforts in research was a welcome relief and one that saved many lives post Pearl Harbour. In fact, had Fleming not left his culture in the untidy lab, possibly there would have been more casualties in the run up to finding an effective, efficient, agile and durable solution to the problem that faced soldiers.
I have read articles in my quest to unpack the term “digital transformation” in a language that makes sense to us all. In an attempt to grasp the subject, I deduced that most of the write ups talk about the how (digital transformation roadmap), the why (customer experience) and with what (channels etc).
However, the WHAT seems to point to varied definitions. Varied definitions lead to varied interpretations. Varied interpretations lead to varied application. Varied application leads to varied outcomes.
According to research findings by Altimeter Group, titled “The 2014 State of Digital Transformation”, only 25% of the companies surveyed had a clearly mapped journey, yet
88% of the same cohort responded that they were undergoing digital transformation efforts. These numbers point to a case of the conundrum of understanding of the terms “digital” and “transformation”.
In order to give context, the dictionary meaning of the term “digital” is basically digits. It is numbers. It is zeros and ones in the context of computing. It is about data. On the other hand, “transformation” is about change. Using the analogy of the lifecycle of a butterfly, you may say it is the transition from caterpillar to a butterfly. It has been said before that “digital transformation” is not just about technology and its implementation. By using the term “technology” here, the context is meant for Information Technology or IT.
I have looked at a couple of digital transformation frameworks from consulting firms such as Capgemini and Accenture. The key pillars I see from these frameworks are customer perspective, cultural perspective, and capability perspective. On customers, the deduction is that the journey must start and end with the customer. It is about giving the customer an array of channels that are coherent while availing data about customer behaviour to better serve the customer effectively, efficiently and with speed. On culture, the deduction is that the enterprise must reorganize its values, beliefs, work ethic, relationships and structures in order to align to the customer centricity approach. By working anytime and anywhere, customer queries can be responded to any time anywhere as and when they are raised, irrespective of business hours of operation. On capability, deduction is that the enterprise must restructure its means to produce products and services across the value chain in a manner that is responsive to the changing needs of the customer. The underlying enabler of these perspectives is data.
Based on this understanding, it is clear then that the term “digital transformation” points to how the enterprise should re-organize itself, using data as a lever, to achieve the aspirations of the three perspectives. The key imperatives borne out of the three perspectives then inform the creation of a digital roadmap. One analyst has said that digital transformation is more than just “increased technology spending”. He goes on to add that, “the essence of digital transformation comes down to people and how their digital behaviour differs from that of the traditional customers before them.” Therefore, using this analyst’s perspective, the WHY of digital transformation is driven by changing customer behaviour as a result of digital evolution. In other words, customers’ behaviour is influenced by their ability to use new ways to communicate and do business.
Therefore at the core of digital transformation is actually not data but psychology. It is human behaviour. It is the psychology of basic needs versus self-sufficiency. Instead of going for bank A which forces me to wait for days for a back office pre-validation, loan application process, I prefer bank B that gives me the option to instantly self-validate and receive my pre-approval in real time. It gives me the sense of self-sufficiency. If we were two customers, both with a basic need of means to fund our next projects (loan), if say customer X banked with bank A, the psychology of basic need would have been met but that of self-sufficiency wouldn’t.
In the same research by Altimeter Group, it says that the biggest challenge to digital transformation was changing company culture. The respondents who ticked this as very important stood at 63%. In the perspectives discussed, culture is partly meant to address this. From the models, culture is placed as a strategic asset and part of digital investment. Those two seem unclear from the diagram. Nonetheless, the fact is that culture sits in the middle. If culture is borne from human psychology, then it sits in the middle because it drives the why of digital transformation (changing customer behaviour) and it equally informs how digital transformation (collaboration, work any time anywhere, integration) works.
Going back to the introductory story of this article, culture was a key driver in Fleming’s effort to find a solution to septic wounds. He was concerned about saving lives. Others had provided solutions to save lives but they instead caused more deaths than they prevented them. Human psychology then was focused on any solution that could make them survive the wounds. It was a basic need. When Fleming discovered a bacteria killing solution that would save lives, transformation had just begun because it changed patient behaviour. Before penicillin, patients had slim chances of survival. But in post penicillin, wounds were no longer killers.
Therefore having 63% on a digital transformation journey for which they are unclear about the destination, is of big concern. Transformation, digital or not, must have a coherent and holistic view of the enterprise and its context. Another analyst says this of digital transformation:
“If you don’t have a process, any talk about digital transformation remains just that-talk.” However, most of the time, this process tends to be very IT-centric or borne of IT practice. Therefore, as much as it is claimed that digital transformation is not a technology-oriented initiative, this is exactly how it is treated. Another analyst on the subject says: “The focus of any transformation effort should be on changing what needs to be changed in order to improve the bottom line.” In short, there cannot be fragmented initiatives each dubbed “X transformation”, running on its own, while using its own framework or method and expecting to respond to only one perspective of the customer. The enterprise is in a turbulent sea of change and the maturity of transformation is key to surviving this onslaught. So enterprises must adapt to mature their transformation or die trying to transform in an incoherent and fragmented manner.