Every digital initiative embodies the tension between speed and certainty.
Innovation and competition demand organizational agility as customers change the terms of competition. Given the unpredictability of change, executives need to know more before making commitments and investments. At the same time, the pace of those commitments and investments accelerates. The result is either digital proliferation or digital transformation – both problematic to the goal of digital success.
Digital Proliferation – when speed trumps certainty
Everyone goes his or her own way when the pace of change outstrips the capacity to change. This is a common pattern with digital, particularly within larger, multi-line companies, as each group wants to have its own digital presence now rather than wait for the company to figure out its digital strategies. Web presences grow like bacteria in this situation. The resulting digital bloom eventually requires consolidation as multiple messages fracture brand value, increase technical complexity and create redundant digital capabilities. These challenges give rise to the idea of creating a coordinated digital transformation plan to bring all of these disparate efforts together.
Digital Transformation – puts certainty ahead of speed
Getting ‘control’ is another reaction to the tension between speed and certainty. Digital Transformation concentrates on defining a comprehensive scope of change and then figuring out how to execute that scope at speed. Understanding the whole before you build out the pieces makes sense, particularly given digital’s broad influence in an organization. This gives rise to the impression that a roadmap equates to a digital strategy, which it does not. A strategy is a set of directional and resource decisions to achieve a goal while the roadmap reflects these decisions. Creating a roadmap does not mean that you have a strategy.
Too small to matter and too big to fail
Proliferation and transformation represent immediate responses to tensions between speed and certainty. In the short run, in the face of the immediate need to do something, both give executives the comfort of activity without necessarily the cash of accretive growth. The result is a growing skepticism about digital technology and its true business potential.
The near term success of isolated initiatives found in proliferation point to digital’s potential. Proliferation creates successes in marketing, extending experiences, driving new capabilities that lure customers away from a competitor, or the internal efficiencies of going digital. Each success is important, but often not accretive to revenue or profits. Turning individual success into scale results leads to calls for digital transformation.
A transformation equates large-scale benefits with large-scale change. It is an equation proven to an extent by past IT investments. Defining the full range of digital change addresses the need for certainty, but it also creates initiatives that are ‘too big to fail’. Such initiatives made sense when laying down the foundation of a business or its back office operations when failure is not an option. In digital, failure is not only an option but also the octane that drives innovation.
The traditional transformation approach is ill suited for digital success. Certainty takes time to define, estimate and deliver. Transformation projects grow over time, often gaining a hairball halo of individual initiatives, pet projects and alternative investments. These accumulate in large part as traditional transformation adopts an inside-out view – taking the time and resources required rather than adapting to changing market challenges. This works for core capability situations. Situations where change builds the ‘must haves’ of modern business that are somewhat immune to time.
Digital capabilities are external facing and therefore susceptible to market irrelevance with the passing of time. Unlike IT investments in core transaction processes, the requirements for success change all the time from the outside in. The threat here is that while a traditional transformation approach creates certainty within the program, there is no certainty that the capabilities created will remain relevant in the future.
We need a different way of thinking about digital change. Change where organizations gain the adaptability of individual initiatives without the price of proliferation. Change that gives executives certainty in the scope they are buying within a time to market relevance.
Rather than thinking of projects as too small to scale or too big to fail, consider ones that are too focused to fail.
More about that in the next post.