Why Digital Transformations Fail
August 19, 2021

Achieving Digital Transformation success through more discipline

By Paul Laughlin

Following our recent focus on Data Literacy, another challenge for many of today’s leaders is Digital Transformation.

Like other fashionable developments before it, too many Digital Transformation projects result in failure. Either the final delivery fails to meet expectations or the project is canned before completion. That is why a book from experienced CIO Tony Saldanha is so important.

In this post, I’ll share my review of his book “Why Digital Transformations Fail“. A book I recommend and believe could help many leaders better think about & structure their digital transformation projects.

Of industrial revolutions & aircraft analogies

The subtitle of Tony’s book hints towards how it helps leaders. “The surprising disciplines of how to take off and stay ahead“. The book is structured around Tony’s five stages of digital transformation model. For each he shares the disciplines needed to achieve that stage and sustain progress. He is keen on using aircraft analogies (all the way back to the Wright brothers). These are well used, as leaders do need to consider not only successful implementation but sustained benefits.

The reference to surprising disciplines is not because any one of the 10 disciplines he shared are novel or complex. Rather the focus for leaders may be surprising. From personal experience delivering such projects, he rightly challenges most leaders focus on technology. Tony skilfully uses his own examples and many case studies to prove the focus needs to be elsewhere. Instead leaders should focus on disciplined execution. Considering people & organisational readiness as much as understanding tech.

The high-level structure of the book is in three parts. In part 1, Tony summarises the burning platform of the Fourth Industrial Revolution. Convincingly making the case for the seismic nature of current disruptive forces and the potential of technology to reimagine businesses. He also introduces his 5 stages model. Here are the high-level stages for leaders to first take-off and then in stage 5 stay ahead in-flight:

  1. Foundation (automation or digitalisation of processes)
  2. Siloed (organic development of digital products/processes in parts of organisation)
  3. Partially Synchronised (partial completion of enterprise-wide digital strategy)
  4. Fully Synchronised (enterprise-wide digital platform/business model has taken root)
  5. Living DNA (the stage of perpetual transformation)

The 10 disciplines Digital Transformation leaders need

In part 2 of this practical book, Tony walks the reader through the above stages. From building a foundation of commitment all the way to embedding a transforming culture. These chapters are the heart of the book and share a consistent style with helpful resources in each.

He starts the chapter with a story that brings the need to life. He then goes on to outline the elements of each discipline, supported by sidebars with case studies (positive & negative examples). Tony closes each chapter with a bullet point summary & a Discipline Checklist. That last element provides questions to ask yourself as a checklist of what is needed to achieve that stage.

Here are the 10 disciplines that all digital transformation leaders should master…

(1) Committed Ownership

Achieving personal ownership of the digital strategy from a senior leader or senior leadership team. Demonstration by that senior leadership team of new transformational behaviours. Structures in place to translate business goals into transformation strategies, with ongoing involvement by leaders. Visibility for key stakeholders of risks, issues & barriers to manage expectations & resolve quickly. Plus, a digital literacy programme for your senior leadership team.

(2) Iterative Execution

The ability to iterate through ideas during execution and only expand on those that work. How to create and manage a portfolio of potential projects through applying a Design Thinking approach. Recasting such speculative projects as ‘experiments‘. Applying a strategy like 10-5-4-1 (of ten experiments, 5 will be killed, 4 should return 2-4 times improvements, 1 should yield exponential improvements). He shares a helpful guide to six steps to achieve such an innovation throughput.

(3) Disruption Empowerment

Providing the change leaders with a sufficient mandate. Aircraft and combat analogies return to address the fact that digital transformation is a hard change. There is a need for sufficient investment in those who will lead such change projects, including ‘air cover‘. Comparing the failure of projects to turn the USA metric with Jeff Bezos‘ successful transformation at the Washington Post, Tony identifies 4 elements that are needed:

  • A Massive Transformative Purpose (MTP) as motivation
  • Air Cover to take risks and to fail fast (freedom to learn by doing)
  • Leadership skin in the game (senior leader aligns personal success to change)
  • Feeder pipeline for starting disruption (connected to seed ideas/needs)

(4) Digital Leverage Points

The strategic selection of areas that digital can uniquely disrupt. How to spot those strategic strengths or opportunities where digital can make the most difference. The need for a deep understanding of your business. The benefit of identifying your pain points. The need for these to be translated into big ideas for digital transformation by understanding what is possible. How a Design Thinking ideation process can also help at this stage.

(5) Effective Change Model

Choosing the most effective strategy to deliver this change. Helping readers to identify likely ‘headwinds‘ from the start. Choosing one of three change management strategies in light of challenge. Explaining the options of Organic Change, Edge organisation structures and Inorganic change. How to use middle-management reward systems to empower change.

(6) Strategy Sufficiency

Testing for the sufficiency of the digital strategy to deliver systemic transformation. Considering the application of Google’s 70-20-10 mix. That is 70% of activity dedicated to core business, 20% to core development projects & 10% to unrelated new businesses. The value of Moonshot thinking. How to use intrapeneurship programmes. How to identify the right metrics for success and the value of celebrations.

(7) Digital Reorganisation

Redesigning your organisation for digital capabilities. How to nurture and manage horizontal skill-sets across all functions. Understanding your IT organisation and how best to work with it. How IT function maturity & competitive advantage highlight the opportunity. The need to upgrade not just your infrastructure but also your people capabilities. Re-skilling a workforce and transitioning to new processes with fluid organisational structures. Plus, don’t forget the role your vendor ecosystem can play.

(8) Staying Current

Driving the ability for leaders to stay abreast of evolving digital capabilities. Tips for education and monitoring. Sources that can help you recognise and track the technology trends that matter. Tony identifies the most important technology developments (most likely to disrupt your business) as:

  • AI
  • Smart Process Automation (inc. RPA)
  • Blockchain
  • Robotics & Drones
  • Special-function tech for your sector (e.g. VR, 3D Printing, Nanotech, IoT, advanced materials etc)

(9) Agile Culture

Beyond agile change projects, setting up a culture that supports constant change. The familiar evidence of how culture eats strategy for breakfast. Helpful examples from Zappos & Adobe. What to take from the predominant culture in Silicon Valley and the motivating goal of fluid organisations like SpaceX. Including the essential characteristics of customer-focus, safe-fail & constant evolution.

(10) Sensing Risk

Creating an ongoing assessment process and action against digital disruption threats. Tony introduces the P&G Digital Disruption Index and how that helps. Key elements are tracking industry trends, customers information, business model trends & your digital performance feedback. Why this constant scanning & planning needs to be baked into your strategy process. Sources to help you spot early where investment is flowing & societal trends.

What else you’ll find in the resources for Digital Transformation leaders

Following all the advice and referenced resources found in part two of this book, Tony shares more of his experience. We are talked through the transformation journey that he led for P&G’s Global Business Services. This helps bring to life how each of the 10 disciplines above contributed to his success. It makes a convincing case for the need to focus more on disciplined execution. He also helps introduce there different forms of digital transformation: entirely new business models, technology-driven new products & digital operations. Leaders need to gain clarity on which is the current opportunity for their business.

Tony closes his book with many compelling examples of the need for change (to avoid disruption). Why digital is the ultimate leveller of the playing field for businesses. He also reminds readers how the usage of the 10 disciplines outlined in this book can help leaders win in that contest. It’s a motivational note to end on, backed up my many more resources in the appendicies.

Appendix A is a full checklist of 5 questions for each of the 10 disciplines outlined in part two. It will help leaders diagnose their current readiness for each stage & where action is next needed. Acting as both an aide memoire of the model in this book and hand checklist for the discipline/stage in focus. I recommend digital leaders have a laminated copy with them until it becomes second nature to ask these questions. Appendix B is a deep diver into the 5 most exponential technologies, those listed in discipline 8 above. It also includes helps links to sources for more information and to stay current.

How are you maintaining discipline in your digital transformation?

I hope that book review was helpful and encourages those leading digital transformation to checkout this book.

Do you agree with the central premise, that the best way to avoid failure is greater discipline in execution? How are you currently establishing the disciplines needed? Do you agree with the 10 above or recognise others? What have you learnt from leading such projects? How did a greater focus on execution help or hinder you?

With so many digital transformation projects still failing, let’s keep sharing such hard earned wisdom. Because digital transformation is often the key change project for better use of data & analytics. I recommend all data & analytics leaders to get involved. You have a crucial role to play in such culture change.