Digital Transformation with Humans

Digital Transformation is all the rage these days in Oil & Gas and pretty much every other industry it seems. I get it. It is a good idea to leverage technology to reduce costs, have better information to make better decisions, and make work better for your people by giving them tools that are supposed to make their life better. I am all for that. But does digital transformation always provide all the improvements that are promised? If not, why not?

As a relatively, ahem... "older guy", I have been around long enough to see quite a bit of "digital transformation" in my days. I remember the first computer I programmed on. It was an Apple IIe. (You kiddies can look it up in the history museums.) The year was 1983 and it was a work of art and innovation. I loved that thing. The world was going to change so fast. My teachers didn't understand. My parents didn't understand. Get out of our way. We are the future. Sound familiar?

So I started learning to program. I even submitted a beautiful gaming program for a National High School programming contest. After they reviewed my program, I was quite sure Apple's Steve Wozniak would be personally calling my high school to ask for me to move to California to take over as head of programming. I was ready. I was 15 and had been programming for six months after all.

Well, you might have guessed it, I didn't get a call. But I did get a letter in the mail. "Dear Mr. Koonce: Thank you for your submittal for our programming contest. Your program was reviewed and we believe you would be better off staying in shop class and learning wood working. We wish you the best of luck. Sincerely..." My dreams of a programming future were dashed. Guess I would be staying on at Blue Mound High School a few more years.

But, I did not give up so easily on technology. I just shifted to the hardware side by studying Electrical Engineering in college. I did get a little better at programming and remain a pretty impressive FORTRAN 77 programmer and still know all the DOS commands by heart. (I offer this in case any of you reading this need someone with such technology skills but, I digress, forgive me.)

More importantly than my programming skills, I stayed at the leading edge of personal computers and software as the IBM PC just started to take over the world. I even sold IBM Personal Computers at my university to incoming students. I remember many conversations with the parents of students. The Father would say: "What does my son need this expensive computer for any way? Is it really going to make a difference in his academic work?"

I would respond with some brilliant application idea like "He could more efficiently write his term papers on Word Perfect." The Father would say something like "He's got a really nice typewriter with an erasing ribbon. That should be good enough. It worked for me at Harvard in '63. " Then the mother would get her checkbook out and write the check. "Earl, my Johnny is not going to be deprived of his education just because you can't see the future of technology. Stop being so cheap, you Luddite. Pay the man." I could always count on Mom taking care of little Johnny (and my commission).

Was little Johnny a better student because of his lightning fast 80286 processor to write those term papers? Well, maybe a little. It certainly gave him every opportunity to improve his work. But, just because he had the digital upgrade did not guarantee productivity improvements did it? Why? Because Johnny was human. He could be easily distracted by other issues in his life like Suzy over at Kappa Delta or the 10 keg party his buddy was hosting.

This brings me to the point of this article and if you are still reading you clearly do not have any buddies hosting 10 keg parties right now. So strap in. Here goes (it's a shocking revelation, I know):

Technology does not guarantee improved productivity.

That's right. I said it.

Please don't think I am against technical innovation. I have been in the middle of technology my entire career including installation of the first back fit digital microprocessor instrumentation on a Los Angeles Class Submarine in 1999 (that was a little stressful) and the first Pacific based submarine to be certified for Digital Charts at sea. So I have been a part of many digital initiatives and I love technology.

It's just that I believe much of the potential for productivity improvements using technology is never truly achieved or at least not at the speed it could be. Why? Well, I believe there are three main Organizational Behavior issues with many digital technology application projects. They are:

1. Training only emphasizes the "how" and not the "why". Too many leaders and managers assume the benefits of a "digital transformation project" are obvious and don't take the time to explain the why to their teams, especially those at the tip of the spear out in the field. Field Technicians only hear "Boss says we gotta use this new software." Field Technicians may not get trained or educated on how the data they are gathering or tools they are now using impact information and decision making processes. They think it's just a bunch of data for nerds in the corporate office and has little to do with the equipment in the field. "I have been submitting those daily data uploads for six weeks now and have no idea what they do with it. The data rarely changes. I think I will just submit the same data for the week on Fridays. What difference does it make? They don't seem to use this data anyway...." Haven't heard those conversations? Spend some more time in the field. You will.
2. Management Systems and Governance policies are not updated to support and drive the innovation and transformation. In large organizations, a lot of Business Unit autonomy is provide in the form of "loose" Management System requirements and therefore the application of many organizational changes are never fully implemented. This issue should probably be an entire book by itself. But, I have seen many, many innovation projects fall short of their promises due to business unit "stovepipes" that allowed some parts of companies to basically ignore or avoid implementing the changes needed to embrace the technology. This has as much to do with Organizational Change Management as it does technology, but the lines of "organizational changes and digital innovation" are blurring more and more. Both are usually intertwined and yet many times the Digital Project lacks the Organizational Change emphasis required.
3. Leadership and Management lack of knowledge and involvement in the details. Too many senior leaders are sold on the promises of technology by very impressive executive sales teams with lots of data, charts, and testimonies of operational improvements and cost cutting assurances. They know they have to keep up with the competition by embracing technology and change. So they approve the project. But, then the project is handed off to some young team of consultants, technicians, and project managers who do their best to implement the technology but lack the leadership and experience to work through road blocks largely put up by problem number 2 above. Leaders never fully understand the details of the technology and problems that are encountered. They get a "red, yellow, green" chart update once a quarter which makes everyone feel good about the progress. But then many months into the project they are not seeing the results they were promised. The economy turns south and they need to find some immediate costs savings. The project is dumped. The software is blamed. The company leaders never do a true organizational and project root cause analysis...who has time for that? So 6 quarters later when the economy has turned up again. They start a new project to use innovative technology...rinse and repeat poor performance improvements.

I know I am painting a bleak view of digital innovation projects which is probably slightly unfair. Many projects are clearly successful and I should give them more credit. It doesn't always go poorly. But in those projects I have observed (and I have done root cause analysis on large scale innovation projects gone badly), these are the typical organizational root causes.

So for you leaders and managers who are out there listening to sales pitches on "digital transformation" I encourage you to consider the human and organizational aspects of potential project pitfalls.

And if you are trying to decide on the benefits versus costs for that new digital transformation project, make sure you include the costs of organizational change management. Oh, and don't bring your Mom to the sales pitch, you know her vote.

Bob Koonce served for over 20 years in the U.S. Submarine Force and retired from active duty in 2011 after commanding USS KEY WEST (SSN 722), a nuclear submarine based in Pearl Harbor, Hawaii. Bob frequently speaks and writes on Operational Excellence and High Reliability Organizations based on the leadership and culture of the U.S. Nuclear Navy. He is co-author of Extreme Operational Excellence: Applying the US Nuclear Submarine Culture to Your Organization available here. You can learn more about High Reliability Group by visiting www.highrelgroup.com.