Cracking the code of Digital Transformation

In this podcast, Connected Futures executive editor Kevin Delaney speaks with James Macaulay co-author of Digital Vortex who explains why the failure rate of digital transformations is so high. He goes on to outline how to dramatically improve your chances of success by adopting a synergistic and orchestrated approach described in his new book Orchestrating Transformation co-authored with Michael Wade, Andy Noronha and Joel Barbier. A fascinating must listen for any executive involved in digital transformation at scale. Listen here and read the full transcript below.

Transcript:

Kevin Delaney [00:00:28]  We all talk about being agile adaptable and comfortable with change. But in an age when disruption is relentless and the need for transformation seemingly perpetual, few organizations are managing change effectively. James Macaulay is the co-author of Orchestrating Transformation: How to deliver winning performance with a connected approach to change. And he has some key answers as to how change itself is changing in the digital age and how strategies for managing it are falling short. But most important are his insights into what makes digital business transformation work. James and his co-authors Mike Wade, Andy Noronha and Joel Barbier have done extensive research as leaders of the Global Centre for Digital Business Transformation a joint venture between Cisco and Switzerland’s IMD Business School. Together they’ve cracked the code. Into how leaders can harness the powerful synergy that’s possible and even the largest and most fragmented companies. This is Kevin Delaney for Connected Futures. I spoke with James who also leads Cisco’s customer transformation team about how leaders can bring true harmony to their digital business transformations. I hope you enjoy the podcast.

So, James, it’s a pleasure having you today. We’re excited about your new book. And in just about every industry established incumbents have faced fierce challenges from nimble digitized challengers and your earlier book Digital Vortex did a great job of explaining just what is happening and why. Maybe we could start with a quick review of the key findings from Digital Vortex. For starters why the metaphor of a vortex.

James Macaulay [00:02:09]  Yeah, thanks Kevin it’s great to be with you. Digital Vortex was the first book that we published as part of the partnership that Cisco established back in 2015. We think a pretty unique partnership for the high tech industry and kind of corporate university partnerships overall. So IMD is a business school based in Lausanne Switzerland and IMD is an acronym that stands for the Institute for Management Development and here in North America IMD’s maybe not quite as well-known but is generally in most business school rankings kind of one of the top 15 or 20 MBA programs but they’re the perennially ranked number one in one particular category of business school that we as a Cisco care about and that’s Executive Education – that’s really their overwhelming focus and about nine thousand executives go through the gates of this institution every year for professional development and so it gives us at Cisco this partnership a great platform from which to listen to and learn from and engage with our customers. And so together we formed this think tank called The Global Centre for Digital Business Transformation to do applied research on digital transformation so not that kind of ivory tower Management Journal stuff but actually helping executives in big incumbents the companies you, you referenced in your question to think through new approaches to respond to disruptive competitors and to transform successfully. So it’s been an exciting journey for us thus far in terms of partnering with IMD to do that applied research. And so our first book which came out in 2016 you mentioned is-, was Digital Vortex. And the reason we chose the word  Vortex – the kind of the anchoring metaphor for that project. It wasn’t just that Vortex it is kind of a cool sounding word or something. There are actually characteristics that help us to conceptualize and explain all the market change that we were seeing.

Kevin Delaney [00:04:26]  And of course in the digital vortex, change comes fast and furious and it’s never as safe. Even on the outer edges of the vortex as it may appear as you visualized really nicely in the book. So what does that say about the very nature of change today.? How is change itself changing?

James Macaulay [00:04:45]  Yeah that’s exactly right. Change is changing and the metaphor of the digital vortex you mentioned you know the outside of the vortex the way that we think about this is that the markets actually have this kind of something like the force of a vortex at work whereas you know a vortex is a phenomenon in the real world that exerts a rotational force on all the things around it and kind of draws them towards their centre. And that’s what we’re really seeing in terms of industries. Industries are converging and changing in all kinds of ways that we haven’t seen before and we’re seeing all these new competitive forms emerging also in a vortex as things are kind of swirling around they bump into one another they collide and they break apart, they unbundle and that’s also what’s happening in terms of industries companies’ value chains they are unbundling. So in the digital vortex in this way that we are thinking about market change anything that can be digitized will be digitized and that’s exactly what these disruptive challengers that you mentioned-, what they’re doing they’re unbundling the value chains of incumbents and they’re digitizing whatever can be digitized in those value chains and in so doing they create market change.

Kevin Delaney [00:06:17]  Another key point in the digital vortex was that those agile disruptors that you’re talking about they often appear to hold all the cards but the incumbents have their own advantages. If that is they make the right changes.

James Macaulay [00:06:30]  That’s, that’s right. I mean the subtitle of our first book was how today’s market leaders can beat disruptive competitors at their own game. And there’s often a feeling isn’t there that disruption is this isn’t is an inherently negative thing. If you’re-, if you’re the incumbent, that this is something that’s being done to you that you need to respond to. And what we tried to do with this book was to demystify digital disruption for incumbents so that they can themselves turn the tables on disruptive competition to go on offence to be not on their heels all the time but kind of on the balls of their feet. So are there ways that incumbents can capitalize on digital disruption and that’s what we kind of lay out in that book is that in fact all of the-, all of the market changes that are are occurring can equally be catalyzed by and capitalized upon by incumbents. So for example we-, when we first formed the Global Centre for Digital Business Transformation our think tank we said to the analysts who were on my team at Cisco and the researchers over at IMD in Switzerland we said before you do anything else we want you to kind of disappear for the next 90 days and just work on this question of how digital disruptors do what they do. Now, what makes them tick? And because we felt like if we’re going to presume to tell big, successful extremely prosperous companies “here’s how you need to transform” we needed to understand their context the market changes that they were facing at a very deep level. And so the analysts kind of did what we asked they disappeared. They came back after 90 days and they-, they basically decomposed disruptive competition in a really powerful way. We found that disruptors do what they do not just because they use digital technologies or because they’re small they-,  there are certain commonalities in terms of what they do-, in particular in their business models-  their approach to business models and one of the key frameworks that we introduced in that book was around the types of customer value that disruptive competitors are good at. We said they create cost value that means they make stuff cheaper, they create an economic gain they create some kind of experience value, they make customer experiences faster, more convenient more personalized and then platform value – platform value is value that accrues to the customer by virtue of new or improved connections, right. So like a buyer and the seller are connected – a learner and a teacher, a doctor and a patient right both sides of that market benefit from the connections so all this to say that big incumbents can harness the business models and the approaches to customer value creation. And indeed they must do this, we believe, to be competitive and to be successful in this environment we call the digital vortex. And it’s also about how they build their business. You use the term agile we devoted-, the whole second half of digital vortex is about how do you mimic, how do you emulate the agile organizational capabilities that the disruptive competitors have?

Kevin Delaney [00:10:08] One of the really interesting ways that Orchestrating Transformation updates from your earlier book Digital Vortex is in some of the responses that are coming among these incumbents. You’re saying that the awareness of digital transformation and the need for it is tremendous. They’re all getting it now even in ways that they weren’t a few years ago. But for many, the results are not proving to be particularly stellar – you quote a number ninety-five per cent of transformation initiatives still fail. You call it the “transformation dilemma”. What are some of the reasons for that?

James Macaulay [00:10:43] Yeah yeah no you’re absolutely right Kevin I mean that when we wrote the first book in 2015/ 2016 timeframe, the questions that we were getting from executives in our workshops and teaching programs all around the world and across the industry, everybody wanted to know how did all this digital disruption why was it occurring? How is it happening? What should I be doing about it?  Am I going to get Amazon-ed or Uber-ised in my industry? But by the time 2017 /2018 rolled around, the questions had really shifted to OK, I kind of get it now. What now? How do I actually execute the change? And because the company is you know they’re not lacking for digital initiatives and transformation efforts. On the contrary, in fact, I saw a data point a week or two ago it was produced by IDC the market research company that said around the world companies in 2019 will spend one point two five trillion dollars on digital transformation that’s not the total IT spend, that’s just targeted at transformation. So this 95 per cent failure rate. That was a stat I had come across I think being produced that-, when one in 20 transformations meets its expectations and you’re spending the equivalent of the GDP of Australia, this is not a minor problem, right? This is a big, big problem. So we spent really the last two years researching well why is it that so many of these transformations fail to address this, this pervasive question of how do we execute organisational change effectively?  And so what we found was probably the biggest-, the biggest finding was that transformation efforts fail frequently because they’re very fragmented and they’re pursued in kind of in silos. There are bits and bobs of digital this and digital that going on across the company and you can have a digital marketing initiative and a digital supply chain and digital real estate. And you’ve got a new app and you’ve got digital going on all over the place and a lot of shadow digital by the way right, where people are or you know introducing new digital solutions for their team and putting it on their credit card. So all of that-, all of these things are going on but they aren’t connected in any way and they’re not producing any synergy and synergy we believe is the missing ingredient for most transformation programs and why they fail. So this-, this book’s subtitle, our second book Orchestrating Transformation. Its subtitle is “How to deliver winning performance with a connected approach to change”. And that’s what we’ve-, we’ve really thrown ourselves into over the last 18 months or so, is studying how organizations can create a more connected approach to how they execute change.

Kevin Delaney [00:14:01] So as you say orchestrating transformation is more about the how of transformation as in how to execute. And a lot of that comes down to leadership, doesn’t it? It’s a lack of awareness around what is fast becoming a perpetual state of transformation and how to manage it. So how do you begin to address some of the leadership issues around these transformations falling short?

James Macaulay [00:14:25] Yeah absolutely. So one of the big findings that we’ve had is that the reason that these this fragmentation exists where the where there is so little synergy produced among digital or transformation oriented investments in companies, is that the organization itself is highly entangled. That’s the term that we use. It basically means it’s very complex, there’s tons and tons of stuff going on. So look at my own company Cisco we have 74,000 employees and we have thousands and thousands of partners that we work with and sell through and innovate with. You know and all of those people and the teams they represent they have lots of, you know, stuff that they’re doing they’ve got business processes, they’ve got systems, they’ve got assets, they’ve got ways of doing things and so the scale is very large and that creates leadership challenges and then we find all of those processes and workflows and systems and so forth well they’re all interdependent. So when you make a change you make a decision in the organization. Wherever I sit it is a good chance it can affect me. And when I make a change in the business it affects you and that creates a lot of complexity and leadership challenges. And then in this-, in this environment, the digital vortex as you say the change is perpetual – it’s not like Cisco we’re kind of like waiting around for something to happen, we’re constantly changing in response to customer needs, or competitive developments, or opportunities that we perceive. So it’s a very dynamic environment and that creates leadership challenges. So how do-, so it’s not surprising in other words that these digital initiatives are so fragmented and so piecemeal like think about it – I mean how often have you heard managers say things like “we’re not going to try and solve for world hunger”,  we’re or “we’re not going to boil the ocean” or “we’re going to start with some pilots”, “we’re going to focus on what we can control” “we’re going to put points on the board”. All of these things are well-intentioned. Right. And very often they’re done with an eye towards being more agile and we’re going to start small and test and learn and then we’ll eventually scale it up. But the problem is that a lot of these pilots give rise to silos they worsen the problem of silos and so Leadership we believe needs to kind of transcend this silo problem. And that’s where this concept of orchestration, orchestrating transformation we believe is so valuable because it moves-, it helps leaders to move past traditional approaches to change management which we believe are-, if you-, if you look at most classic change management frameworks and there less something like 80,000 books I learned Kevin, on Amazon, and on the topic of change means there’s no shortage-.

Kevin Delaney [00:17:28]  And you read every single one of them as you were preparing for the book.

James Macaulay [00:17:32] Every word Kevin-, they tend to be very kind of-, kind of linear it’s like here’s you know, here’s step one, step two the the you know thigh bone’s connected to the knee bone kind of thing and-, unfortunately in this environment the vortex where everything is so dynamic the market change is dynamic, the organizational change also is – organizations are so entangled that the change is exponential we can’t respond with these kind of linear approaches, we need something that is more fit for purpose and so orchestration is our way of helping leaders to think about change in this new environment.

Kevin Delaney [00:18:13] Yeah in the book you talk about the difference between plain old change and this much-heightened dimension of digital business transformation which is on a level where for many companies, your fundamental business models are being transformed every few years.

James Macaulay [00:18:32] Yeah, yeah I mean our view really is that leaders, your question on leadership. Leaders need a more nuanced view of change and there are plenty of instances where the “tried and true” change management methods are going to stand you in good stead, right. We don’t need to jettison all of the stuff that we’ve grown up with around burning platforms and guiding coalitions and all the change management constructs that we’re familiar with. Those are valuable, right, people are using them and having a lot of success with them but they break down or they don’t generate the results and we see high rates of failure because they’re not well suited to big changes. True digital transformation meaning changing your business model, your strategy how you create value for your customers. How you go to market, how you make money, how you leverage the talent in your organization. These big fundamental changes – that’s what we think of as digital transformation. There’s all kinds of other change that’s more incremental. And in a lot of cases is not very entangled. So the type of change that you referred to that we call in the book “plain old change”. Well, that plain old change is basically if you were a manager and you want to make some kind of incremental change within your own function. Right, let’s say you’re the advertising department and you want to shift investment from newspaper ads to online ads. You know that’s a-, that’s not a change a fundamental change to how the company makes money, creates value for customers and their business model and it doesn’t affect everybody cross-functionally in the whole organisation just it’s kind of it’s not contingent upon, and doesn’t affect the rest of the organization it’s quite circumscribed the resources that are involved and impact it. Go ahead make that change. That’s what it is to be a manager is to make decisions and implement changes. But when you want to be making these larger, you know, more fundamental changes to the organization and you’re doing it in a highly entangled way, meaning cross-functionally everybody in the company and all the organizational resources need to be working synergistically to drive that type of transformation that’s when you need to move past the simplistic, linear ways of change management to this idea of orchestration.

Kevin Delaney [00:21:08] More and more companies hire a chief digital officer often a former CIO to oversee transformation and often that’s seen as a finite amount of time in which they’re going to go through this process. But as you point out in your book, often their efforts are stymied. You even say that some of them are set up to fail and simply become kings or queens of PowerPoint as I think you say, talking about what needs to be done, but never getting the power to actually do it. So who best to really orchestrate transformation on the deep level that you’re referring to and are the current roles for leading that kind of transformation even defined correctly?

James Macaulay [00:21:46] I think we’ve said at several points that there isn’t necessarily one way to do transformation right but there are a lot of things that people consistently get wrong. And one of the key things is bringing in an outsider and not investing them with the requisite authority. And so what we don’t want however is to have this outsider kind of come in and and you know they’re the new-, the new czar right, and they’re going to declare “this is how everything is going”-, the antibodies will come-, will flood the organism when that happens, right. And that’s when those people end up getting, you know, very marginalized. So instead what we’ve said is first of all you need to establish a really sturdy leadership consensus that starts with the CEO and the board on the direction of digital transformation – that’s probably one of the biggest failure factors is that there isn’t a clear sense that is consistently communicated to the organization of what is the strategic direction that we’re pushing for, what’s our future competitive state and how are we going to get there? What does it mean to you. Right. So. So that is important and in fact, it’s necessary if you don’t have that no matter who’s driving the transformation it’s going to go sideways. There’s a lot of opting out, and people misinterpreting or you know, actually even working against the transformation because of entrenched interests and so forth. What we’ve kind of said though is if you’re thinking about change in a more nuanced way there’s lots of change that’s going on that is designed to optimize the way that the core business is running. And what we’ve said is don’t blow up your whole org chart and try to restructure it for digital. That’s a really bad idea. But you can’t also have this kind of like “the digital team” the “digital office” hanging off the side. So what we’ve said is instead allow your leaders to lead. They’re there for a reason. They’ve made you successful. Let them handle all of that plain old change. Right. But when you’re talking about big fundamental shifts in your business model and your strategy, how you make money, and so forth, and you’re trying to change organizational resources cross-functionally in this entangled environment – you have to be able to work across those silos. Digital transformation in our view, in our definition, is inherently cross-functional. So what we’ve said is assign Digital Business Transformation, defined in that way. Major change this cross-functional nature only. Take that type of change and assign that to a role we’ve called not the chief digital officer, but the chief transformation officer and the reason we make that distinction is too often digital is construed as the technology transformation though is more clearly understood as technology with people, with process, and so forth. So that Chief Transformation Officer becomes the orchestrator of these cross-functional outcomes that your other managers aren’t really positioned to drive.

Kevin Delaney [00:25:09] And what are some of the personal leadership qualities that a company should seek in its new CTO?

James Macaulay [00:25:15] You know we did we did a big project on that little over a year ago looking at the kinds of leadership traits, leadership skills that you want in someone who can drive cross-functional outcomes, who can actually be an orchestrator, who can work with stakeholders all over the business and coalesce these resources that are distributed all over the company in service of this transformation direction that the big bosses want to drive. And we found that there were really four traits four skills. The first is humility-  being humble and that doesn’t mean that you don’t have a big ego. You know, a lot of, you know executives have healthy egos and we all know that – what that means though, is that there’s a recognition and acceptance in fact in embracing the idea that you don’t always know best, right. That that there’s expertise and ideas and so forth that can actually improve the transformation, improve your execution, improve your decisions and so being able to to recognize that and to tap that expertise and to make changes when you know when circumstances or conditions suggest – we need to adapt, we need to pivot. Humility is key. Related to that is adaptability. That’s the second trait. So what that means is being comfortable with change. This environment that we see, you know, we can’t kind of chisel the strategic direction into stone and that’s it for the next three years. There needs to be some constancy in terms of the workforce. You can’t be changing every minute but having that adaptability to be agile enough to be comfortable in working in multiple disciplines, in multiple areas of the business and being flexible enough to change when conditions demand that’s, that’s adaptable. The third is visionary. And so what we found is that the most successful orchestrators and change agents they have that thing that can’t really be taught right, they have that thing – the vision thing. The ability to look around corners, to look at competitors, different types of competitors, especially across industries because that’s what’s happening in the digital vortex as I said earlier that these industries are converging and retail’s intersecting with financial services intersecting with telecommunications intersecting with manufacturing and so forth. You can’t look at things just through the lens of your own industry as you have for the last 100 years or whatever, you need to be looking across industries and looking at those changes. So having someone who’s comfortable looking forward, creating scenarios, looking for opportunities and threats that exist in all kinds of unusual places – that’s a really important skill. And then finally the last one is being engaged and we think that that is probably the most important one is that we want you if you’re an orchestrator, right, you’re a transformation practitioner on some level you need to be separate from the core of the business so that you can look around corners, and you can try new things and you can experiment but you need to be engaged with the business to create buy-in with the other leaders in the organization, to be able to engage cross-functionally because if you’re just doing transformation in the silo, and a lot of these digitization offices and that kind of thing, they’re doing things in a silo and they’re never able to transition that back into the mainstream – it never becomes-, it never becomes part of the core. They’re not successful in scaling it, we see that all the time these experiments dying on the vine. Being engaged to understand the context of the business of being-, communicating what you’re doing and then orchestrating with a coalition of leaders, cross-functional outcomes. That’s really, really important. Then that means-, engagement means being engaged up the stack to your executive leadership to your peers who are running other business units or parts of the organization and who control resources that you will need. And we’re not talking about centralizing all the people process and technology under one person – that’s not desirable. You need to orchestrate those resources wherever they exist, but also being engaged even down to the front lines of the business and the individual contributor level the “what’s in it for me?” Helping them to understand the direction and why we’re doing this and so forth. So humility, adaptability, vision, engagement that’s H A V E we call those the must have competencies.

Kevin Delaney [00:30:38] And it’s that rare blend of hard technical skills, and human soft skills and even political skills that you have to find in that-, blended in that one person isn’t it?

James Macaulay [00:30:49] It can be but I mean I think it’s also sort of-, it takes a village to transform I think you need a mix of skills and in some cases maybe you’re not going to find someone who’s you know exceedingly technical you need-, you need a baseline fluency in technology I think to be an effective practitioner of digital business transformation – you don’t necessarily have to be a software engineer but you need to have some good software engineers probably, you know, on your side.

Kevin Delaney [00:31:22] Well you talk about in the book about creating a Transformation Office around this person as well.

James Macaulay [00:31:30] As I said you don’t want to be centralizing and creating an empire of this massive overlay which is usually overhead. So we sort of say look, it needs to be lean and mean but it needs to be orchestrated. So you maybe have a core team who are you know-, it might be a mix of people who have kind of a management consulting background, you might have people who have done a lot of Agile development you know, a mix of skills, project managers et cetera but it’s a small team – but what the chief transformation officer and his or her-, that this unit the Transformation Office what they’re really doing is orchestrating contributions from across the company and we talked a lot in our book about how you do that; you get people and data and infrastructure that are distributed all over the company but that are needed to drive a particular transformation. Getting them to work synergistically, right, to produce the synergy that we’ve said is usually lacking. I mean let’s be honest most companies don’t do any cross-functional teaming and those who do do it, they tend to do it on a very small scale where they’re sort of like just kind of tossing some information over the transom they’re not really working in a dynamic teaming type of a model. So what we’ve tried to look at is how it’s not about transforming in silos instead cross-functionally you can create this new model for execution, we call it Transformation Network, which is all of the people and all of the data and all of the infrastructure, the stuff, the things, the capital assets, the machines, what have you, the people, data and infrastructure i.e. all of your organizational resources – you want some subset of those working together in support of standing up this new capability or this new way of doing things. The output of the transformation, the Transformation Offices is really orchestrating the coming together and ongoing collaboration of that transformation network of those resources. That’s really the core job of the Transformation Office and the whole idea behind orchestration and a new way of executing change.

Kevin Delaney [00:33:51] You’ve already painted a pretty compelling picture of what life would be like in the orchestra zone as you’ve called it, but maybe you could just elaborate a little more on just what kind of an organization will thrive in this perpetual reality of change. What are some of the ways, for example, to fully establish that kind of agile culture that can continue to thrive in that kind of environment?

James Macaulay [00:34:18] I mean you used the keyword I think which is “agile” and so agile means a lot of things today. We hear that word constantly now in Agile supply chain and agile development and you know in the I.T. space but fundamentally that is what when we look at what disruptive competitors are doing in their secret sauce. They’re very agile. They can change a lot. And that’s what the digital vortex demands and you need to be very agile to work through this complex organizational and what in a big company like a Cisco or any incumbent this entangled environment. You need to create agility. So. So what does that actually mean? Right. What what is agility? It’s not just a buzzword. And we spent a lot of time. I mean I mean that probably the majority of the work that we’ve done since we formed our research institute four years ago, has been focussed on how do you create organizational agility; the capacity to change? That’s what Agility really amounts to. And what we found is that there are three main factors. The first we call hyper-awareness. That’s what disruptive competitors are very good at first and foremost is that they know what’s going on in their ecosystem in their marketplace with their customers with their competitors. The regulatory environment and all, but also what’s going on in their organization. You know, what did their employees know. What are they doing what’s the status of the physical assets in the company they have? They’re very hyper aware about everything around them. So that’s step one. The first capability that creates agility. The second is what we call informed decision making which disruptive competitors are also very good at. And so it’s not enough just to collect mountains of data. If you can’t use that data in a constructive way i.e. to make a good decision. So informed decision making is about making the best possible decision in every instance leveraging that hyper-awareness leveraging that data. And so it’s not importantly what disruptive competitors know is that every employee is a decision maker on some level about, you know, how-, what discount should I offer this customer? You know that’s a decision. I mean all of us make dozens or hundreds of decisions in a day. Can we increase the overall decision intelligence of the company through analytics, through more inclusive decision making, so these are things again that disruptive competitors are very good at? If there is a-, if there’s an individual contributor who happens to be quite junior and is based in Korea but I live in the United States if they have expertise or data that can improve the decision at hand, we want to tap into that. And so are our research tells us that disruptive competitors are better at pushing analytics to the front lines of the business and being more inclusive in how they make decisions than are incumbents. So that’s an informed decision making but where disruptive competitors really separate themselves from incumbents is in the third aspect of agility which we call fast execution. That’s where they really separate themselves-, into a lot of incumbents they tell us and we know these disruptive competitors, boy they really just seem to be able to move fast don’t they, they’re always releasing something new. They’re always pivoting and so forth. So it’s not enough. All-, I mean you can make the best decision in the world but if you if you can’t put it into practice, you know, it’s going to come to nought so fast execution the third leg of the stool in terms of what it takes to create agility really is about being more dynamic with your resources. You know, disruptive competitors with their human resources they don’t hire somebody in general and they keep them around for the next on the payroll for the next 40 years. They are a lot more dynamic in terms of how they think about talent they use this approach we’ve referred to as “talent clouds” where they’re bringing in needed skill sets and experts for shorter durations to work on particular problems or opportunities or projects but they’re also very dynamic in terms of how they use technology. They don’t stand up at you know, dedicated multi-million dollar I.T. system that just does one thing. They are really agile in terms of leveraging technology being-, you know using virtualized resources, the cloud and so forth. So hyper-awareness, informed decision making, fast execution are the things that give you this foundational capacity to change which is what you need in this environment we call the digital vortex.

Kevin Delaney [00:39:17] And of course we’re talking a lot about culture change here but obviously these three attributes are supported by new technologies – A.I. machine learning, blockchain, Internet of Things, 5G whether that’s today or moving forward that’s going to be ever important.

James Macaulay [00:39:34] Those technologies that you described I think, first of all, they’re going to change organizations a lot. We know that, they’re already changing organizations massively and that’s only going to-, if you think about A.I. in the enterprises is only going to accelerate in the next five to 10 years. But we actually think all of those types of technologies they’re actually going not just to change organizations but to change how we change. They’re going to make us more hyper-aware, they’re going to help us to create more informed decisions and they’re going to help us to execute faster. They’re gonna make us more agile and so we talk in the conclusion of our book about how digital technology is-, again they’re not just something that is being done to us but they’re being things that we’re harnessing. We will harness them to change and we believe we will see a kind of a science of transformation emerge in enterprises that that will become a muscle that companies need to develop and will be a big determinant of how competitive they are in the future is are you able to use A.I. to make better decisions? Are you able to use smart contracts on a blockchain to execute instantaneously, right? Not just fast, instantaneously and in automated rules-driven, you know, those kinds of things. So we think this science of transformation is something that we intend to study more in the years ahead.

Kevin Delaney [00:41:07] So it’s been a pleasure chatting with you James. This is fascinating. I wish you all the best of luck with the book just in closing I wanted to mention that the quote you have in the book from Ben Franklin and he says when you’re finished changing you’re finished, which is a lovely, lovely line and as challenging as this level of change can be for leaders and organizations it’s also pretty exciting and full of opportunities isn’t it. Any final thoughts on this journey that companies will continue to be going on?

James Macaulay [00:41:40] I guess I would say I agree with you. I think change is by its very nature exciting. It’s interesting and it can be fun, and it’s certainly fun to study. It has been fun to study. I guess what I would say is. Organizations need to be comfortable with change because this is not something that’s going to slow down. You know as every day all companies and industries and all these different competitive forces are moving towards the centre of the digital vortex they are accelerating and because of platform effects and network effects and that kind of thing, it’s not a linear journey that we’re on. This is exponential and in many areas of technology and in market change we’re kind of reaching the knee of the curve and things are going to get-, start to move faster and faster, so we’re in for what I think will be a pretty interesting ride. But we all need collectively I think to get our heads around what it means to lead in an environment like this where the change that we’re struggling to keep up with now and in many cases it’s going to be higher order types of management challenges in the years ahead so it’ll be interesting.

Kevin Delaney [00:43:10] This is Kevin Delaney for connected futures. My very special thanks to James Macaulay for some great insights. And here’s hoping your digital transformation efforts are smooth, successful and full of synergy.

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