Digital Transformation: it’s all about the people, stupid!

“It’s the economy stupid!” To take Bill Clinton’s strategic advisor James Carville’s observation during the 1992 US elections on the overriding importance of the economy in the electorate’s minds, the same can be said of ‘the people’ in the world of business and commerce.

I first heard “it’s all about the people” from an old colleague of mine and subsequent Research Director at Gartner Derek Miers in 2015. Since then as digital transformation has become all pervasive and means just about whatever you want it to mean depending on your stance, the one thing that is becoming increasingly clear is that it is indeed about the people.

If we’ve learned anything from 2015, it is just how exceedingly hard digital transformations are to get right. With failure rates often quoted to be 75% (Gartner) and as high as 95% (IMD) it’s clear that digital transformation is an immense challenge for any organization attempting it.

The question then becomes what is an organization and how should we approach its transformation – digital or otherwise?  Michael Leckie, author of ‘The Heart of Transformation’ starts the book with a provocative statement along the lines of there is no such thing as an organization only people bound by a common purpose. And this is where I think we get to the crux of what we are all realizing that digital transformation is about – it is about the people – customers, employees, stakeholders, leadership teams, shareholders and boards! All with their own perspective and agenda but people too “who are complex, unique, hopeful, fearful, learning, living and loving” (Michael Leckie)

Greg Satell in his book ‘Cascades: How to create a movement that drives transformation’ talks about successful transformations finding their routes in people – loosely connected but bound by a common purpose. Purpose is a very human construct – it’s abstract and intangible yet powerful as a call to action. Whilst the modern corporation is still there to create economic value the dramatic shift in type of value over the past 50 years has shifted from tangible to intangible assets and these assets are bound in human beliefs.

So, the essence of a transformation must engage the people in the sphere of the organization both inside and out. Understanding and adapting the rapidly shifting needs of customers – recognising the importance of values and purpose outside of the organisation to become part of a customer’s consideration set when choosing which organisations, brands and products to engage with; indeed not just customers but employees and shareholders too who now use their social and commercial leverage to express and influence sustainability and equality agendas too.

Leadership therefore to be successful in this new world has to be profoundly different to what may have worked in the past. Command and control, coercion and the manipulation of physical tangible assets of large-scale manufacturing and more are no longer appropriate in a world of transparency, accountability, purpose and morality openly on display. Leadership is today more than ever about crafting capability to navigate a complex fast-moving world where anything is possible and the response must be rapid, aligned and yet driven not by coercion but by belief.

One of the most respected leaders of our time Paul Polman former CEO of Unilever was asked recently by David Lancefield which 3 attributes of the modern leader are the most important when leading the challenges of ESG and enterprise transformation? His answers: purpose, humility and curiosity. Attributes that are the very essence of what it means to be human. Indeed, someone else whose work I admire Dr Richard Claydon highlights the essence of what it means to be a leader in this VUCA world says:

“Creating a culture of leadership is complex because it is so paradoxical. A leadership culture requires leaders to let go of the levels of control they feel comfortable with. So, a core part of leadership is the willingness and ability not to lead but follow.

The traditional task of leadership is to think about and plan the actions of the workforce. You prepare a strategy, design a culture, choose the developmental path of your product, etc…… The VUCA environment requires the precise opposite. Decisions are made on the ground by trusted personnel with the skills and expertise to evaluate emerging data and quickly act appropriately and effectively. These actions can be in direct opposition to the expectations of the planners.”

And so, in answer to the question, what have I seen in the world of digital transformation over the past few years, it is as it has always been … “all about the people”. People transform themselves and the organizations they become from within. Technology and systems are necessary and sometimes enable fleeting competitive advantage but on the whole, they are commodity and easily copied. As Jeff Bezos says “the only sustainable competitive advantage you can have over others is agility, that’s it. Because nothing else is sustainable, everything else you create someone else will replicate.”

Agility comes from people and their ability to learn and adapt at scale. People are increasingly independent and offer their brilliance, passion, willingness to learn and to share when they feel motivated and aligned in purpose. So those organizations and leaders within them who can let go and conduct the orchestra of human endeavour around them, loosely coupled with a  common purpose will I believe be the ones who continue to succeed in the transformation of their organizations and I hope lead the way beyond commerce to address the bigger global issues of our day

References

Michael Leckie, author of ‘The Heart of Transformation: Build the Human Capabilities That Change Organisations for Good’ 2021

Greg Satell author  ‘ Cascades: How to Create a Movement That Drives Transformational Change’ 2019

David Lancefield from Davidlancefield.com: ‘Paul Polman: Creating companies that give more than they take’ 2022

Dr Richard Claydon Creating a Culture of Leadership 2016

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