In the organization I'm working with we've reached the point when the word 'digital' has joined the banned word list. People don't like it: it implies technology, and difficult things and learning new stuff, and replacing face to face contact with 'machines', and changing ways of working, integrating new and legacy systems, rethinking internal policies and financing arrangements and a whole host of stuff that is difficult to do. It might even imply losing some jobs (but gaining others – which might mean learning new skills …)
So I'm wondering if this attitude to the 'D' word is a definitional issue or a Luddite response, or a sensible questioning of something we don't know how to address but feel we should because the whole world is moving to digital, or a feeling that the digital tribe are aliens who must be resisted, or a general exhaustion with the latest word that people feel will go the way of six sigma, lean, TQM, and so on and is thus not worth paying attention to.
One way of finding that out is to agree and clarify what we mean by 'digital'. There are hundreds of interpretations and uses of the word. I enjoyed reading a blog post on this which ultimately proposes a 'definition of "digital" as not a technology, device, or channel, but instead as "the collection of habits and expectations of modern users." An example of a habit: most people Google things online, whether they're advanced or novice users. An example of an expectation: these users want the right answer right away.'
The thing about 'digital' whether defined as technologies, channels, habits or expectations, is that to become a 'digital organization' or build a 'digital culture' requires fundamental changes to the business model which is why so many long established organisations are struggling with it. One that isn't is John Lewis, a retailer, which recently celebrated 150 years in business. I was talking with a couple of their 'partners' (all employees have a stake in the company and are known as partners). They have an 'omni-channel' digital strategy which clearly changes their business model. And their digital strategy is, in turn, based on a long-term business strategy which is what MD Andy Street says is the most important thing to becoming digital. In his view, '"The most important thing is to have a long-term business strategy. The [business] model on its own isn't sufficient. You've got to have a real clear view about where you compete. For us, we compete on products and service and that fits our business model. The key thing for every business is to decide what you really stand for.'
It is striking that universities, which tend have a clear view of where they compete but may lack a good business strategy for doing so, are having a hard time adjusting their business models to include or at least to co-exist with digital education offered through MOOCS. A recent article gives some reasons for this among them fear from the academics of staffing cuts, the speed with which non-elite universities could change their business model (very slowly), and the difficulties of integrating MOOCS into their traditional programmes, which would require changes in financing and accreditation systems.
Similarly governments, despite best efforts, run the risk of failing at being digital. In the UK Mark Thompson, university lecturer in information systems at Cambridge Business School, says that the government "doesn't get" digital, which is causing old problems to re-emerge within the public sector and threatening to end the digital strategy. In his view, "As shareholders in government we need to wake up to the fact our board members don't get it, that they're not even listening and that our employees are going to resist digital reinvention at every turn … Digital is fundamentally not about new interfaces in the system, it's actually about fundamental business model change.'
While in Australia although 'there have been pockets of success, few [government] agencies have managed to position themselves to reap the full benefits of digitisation. All too often their efforts are undermined by internal resistance, from employees and stakeholders.'
So what is it about universities and governments that creates difficulties in moving from analogue to digital beyond the lack of a business strategy, the ability to quickly change their business model and the lack of a digital strategy tied to the business strategy? I think there are three specific things that need to be addressed in tandem with developing the strategies and model. John Lewis's operation tackles all these three.
The first is the organizational culture. As the writer of the Australian piece said, 'It is not sufficient to just adopt digital processes and systems. Digitisation requires everyone within an agency to adopt a new way of working. It requires an agency to develop a culture that not just tolerates digitisation but embraces it.'
I've had good discussions on this by showing the graphic in his article. It encourages people to think about the things they would have to do to, for example, move from a strong hierarchy (analogue organization) to a flat hierarchy (digital organization). This has led us to starting experiments on this and other aspects of the dimensions he presents. For further ideas look too at Building a Digital Culture or Spotify's squad culture. This also picks up elements of workplace design that help change the culture as does the white paper 'Designing the Digital Culture'
The second is the organization structure. There are great pointers for digital structures in an SSIR piece Four Models for Managing Digital at Your Organization that discusses four models for structuring digital work: 'informal, centralized, independent, and hybrid. The first is typically a legacy of a poorly managed institution, the second and third get closer to what we think institutions need to sustain cultures of innovation, but it is really the fourth that can most consistently produce the integrated, customer-centric digital experience across all channels that is the holy grail of excellence in today's world'.
I love the hybrid model they advocate but it comes with a warning label: it requires 'open leadership' i.e. 'service oriented, highly collaborative, hyper-connected listeners, who also have the technical and content expertise to be high-value strategists. They take on leadership of high-leverage or high-risk projects themselves, but leave space for others to lead on their own initiatives. It's actually unclear whether this model can actually exist if the rest of the institution is highly silo-ized, politicized, and competitive.' So that may rule out governments and universities? But I remain hopeful and will keep you posted!
The third area I'm working on is leadership. That's not the positional power leaders specifically but all the informal leaders found at all levels in the organization. These latter can have immense influence on the success or otherwise of changes to the business strategy and model. Recently, I came across Rebels at Work an organisation started by researcher Lois Kelly and Carmen Medina retired deputy director of intelligence for the CIA. I instantly signed up for the regular email and had a good laugh (or was it cry) reading some of the blog pieces. Posted on their site and also worth looking at is Free Your Rebel Thinkers – a slideshare.
What are you doing to move your organization from analogue to digital? Let me know.
Naomi Stanford 