Digital capabilities will condition digital transformation

From appointing a new Chief Digital Officer to extend really your digital capabilities, long is the road! The French are well known for their habit to spot a problem, create a law supposed to suppress it and then not comply when the law is promulgated. Funny (except when you live in the country ;) Companies tend to act similarly: they spot a problem and create positions generally directly reporting to the CEO because it is « so strategic ». Is the CDO enough to meet the digital challenge ? No. Are companies (even those winning « Digital Prizes ») really nurturing their own digital capabilities ? No. Because there are 3 main obstacles slowing down the digital transformation.

In companies, big data is not big everywhere

For being valuable, all the data must be stored somewhere everybody can tap into, like in a self service restaurant. You could say « easy : data is a flow, it is everywhere». This affirmation supposes that IT systems are able to communicate. Well, don’t start with stellar projects and fancy code names when HR system doesn’t « talk » to your average ERP. Data is -indeed- all about flows of information: it is also a good test to see how deep is the « silo mindset » ingrained in your company. Chances are that it is deeply rooted.  Silos structured companies were great when you were in a new market and stable environnement, only busy with customers conquest. When you can be disrupted every newt morning and your environment is quickly changing, silos maintain territories when working by added value is the new mantra. But it spares big changes in the power distribution. Just for fun : imagine the reaction of a senior Sales person when being told that his (her) strategy is not relevant by a junior data scientist! Silos, therefore, still make Heads of departments happy… No structural change ? No big data then…

Digital makes markets changes quick and easy, structures are slow to adapt

Think of the time needed by Airbnb to develop its business all over the world. How many leaders in the field have warned hotel operators headquarters of the coming threat ?  This sole example is enough to advocate for a strong power delegation. Innovation will sparkle when emergency is felt and where people are motivated, in front of clients, seing changes happening  and ... talking to each others in different disciplines (think of multidisciplinary teams in fablabs : you mix people from the field with R&D and marketers for instance). Add to this first requirement the fact that information is easy to get and available for everybody. Which means that anybody, smart enough, can get value of it. Power must shift to new hands and overturns organisations. Digital flattens your usual pyramidal structure and empowers teams to test new things, learn from theirs successes and failures without waiting for green light from headquarters. « Command and control », though, is still firmly in … control. At the end, the coming transformation is like Janus (the Roman god of beginnings and transitons) . It digitalises all the costs controls processes and therefore forces people to act in a certain way, suppressing any autonomy that would have been left. But costs controls processes are not  best suited for vision and inspiration. Companies need to think more and more out of the box. Digital transformation supposes that top executives let go some parts of their power, unleash imagination, courage and trust their people to do the right thing.

Overconfidence in financial power to slow the transformation

« Let’s buy the threats! » ,« We have a strong market share and deep pockets » could argue C suite to CDO : don’t bother to transform, just take some money and buy a trendy start-up!  Which means : don’t bother to learn new ways of doing things. Digital can be messy, hard to understand. This feature can easily discourage oldest people (hence most senior executives) to learn from it and rely on an eternal, familiar and powerful ally: money.  Money, for sure, will win at the end. But I won’t bet to identify the winner’s pocket… Buying start-ups would be enough and big players would keep them under control that way? Wrong: they lose a major ace : edgy client knowledge (and still changing…) The financial approach is necessary but not enough.  We need to move.

Technology is ready, corporate mindsets are not.  And they are the main time factor that slow down the digital transformation.