Simple Visuals of Where Digital Transformation May Go Next
Prediction is very difficult, especially about the future – traditional Danish saying often attributed to Nils Bohr
The interest in A Simple Visual History of Digital Transformation prompted some to ask about where do we go next. Make any predictions on digital transformation and you can be sure that someone is currently working to undermine your credibility. The following suggestions for the future of digital transformation are offered on the basis that these are ideas that exist “but are not yet widely distributed” to borrow an idea of William Gibson.
As the costs of digital connectivity and computing power fall, these capabilities are being added to more and more devices. The internet of things has reached our homes and our workplaces. The increased ability to gather and use information in real time will drive new innovations in our businesses and our lives.
Add enough digital connectivity and computing power and you have created the potential for a mesh of sensors, connectivity and processing power to fill our environments. Now our digital things and our communication devices can be in constant contact and new applications will be developed to take advantage of the rich digital environment.
The digital mesh will help accelerate digital automation as many traditional roles of knowledge workers, such as the gathering, digesting and processing of information now flow from an ambient mesh and are managed through algorithms and their managers.
A digital mess also enables the greater leverage of bots, digital agents that can navigate the mesh and achieve outcomes for their owners, clients and masters. These algorithms take on the role of making local decisions or acting as advisers or facilitators across the breadth of the networks. Digital Agents help manage the scale of information and the real time demands of the mesh.
Distributed and connected computing power also enables us to revisit concepts of how we record, store and share information on concepts like ownership, identity and history of transactions. Instead of a single ledger located in one location, the transaction history can be distributed and validated across the network, as in blockchain. Innovations will build on these capabilities into new domains.
The digital mesh increasing can enable individuals by supplying capabilities need for individuals to have greater awareness, connection or to do work that was previously beyond the capability of a single individual. If an organisation is a solution to transaction costs as Coase suggest, there are new implications for the role and future of our organisations and the growing capabilities of the digital systems will shape the work individuals will do (or don’t do).
We have not yet begun to explore the potential of extending this digital mesh and its capabilities to the entire world. We can already see new approaches, such using e-commerce villages in China, video in education in India, market pricing data for farmers in the third world or mobile payments in Africa. As the costs of digital technologies fall and reach expands new entrepreneurs will solve new problems for those beyond the reach of this technology today. Perhaps then we will truly experience the power of the Internet of Humanity.
A Simple Visual History of Digital Transformation
Since the Mosaic Browser helped introduce the internet to the world, we have experienced a digital transformation of business. We had digital activities in our organisations before. We had already spend almost 50 years computerising processes. However, the digital connectivity of the internet began more radical change. Here’s an overly simple graphical reminder of elements of that journey.
We began by creating digital channels to connect our organisations to their customers. The website began with simple digital brochures and basic contact information. Very quickly our websites became richer and more valuable. Innovation began outside the organisation that showed the way for all subsequent phases of digital transformation.
We added processes to support the customer interactions. In many cases these processes were new, partial and designed solely to support the new digital channels.
We saw potential in these digital processes and started to apply them more widely. These processes worked in the midst of our legacy process and often in unconnected ways.
As the breadth of our digital channels expanded and we needed to manage new social and mobile channel needs, we needed a dedicated digital team to manage the expanding offering and to help integrate the core digital processes and infrastructure required to support growing digital ambitions.
With a digital team to advocate and lead the way on growing digital opportunities, we saw digital interaction takeover much of the electronic communication in the organisation and new integrated digital processes develop in supply chains, shareholder & community management and other forms of stakeholder engagement. APIs began to standardise digital communication formats in an increasing way for organisations. Organisations could leverage vast amounts of data on interactions and increasingly on activity across the organisation.
With digital interactions dominating & pressure to focus on core business activities, organisations began to become more aware that they operated in digital networks, connected to customers, suppliers and other stakeholders. Importantly, it became increasingly obvious that these networks connected all stakeholders reducing transaction costs and increasing transparency. Most dangerously these networks & data flows gave competitive advantage to those most able to leverage digital technologies in disruptive ways.
Seeing potential in connectivity, new and existing organisations saw the ability to focus on platforms that connected system players, creating new value and disrupting the traditional business of intermediaries. These platforms were increasingly agnostic of whether they ran on a computer, a phone or another device, giving them greater geographic and temporal reach. We began to connect all processes & devices into networks to leverage the power of information. Concepts like employee, contractor, supplier and customer had less secure meaning in a networked world as chains of connectivity ran in all directions & right through the organisation.
With platforms and networks running through and beyond the organisation, people began to explore the opportunities in new ways of working using digital. The boundaries of organisations no longer constrained the boundaries of work. Seeking to retain talent, leverage information more effectively and create greater agility, organisations experimented with new digital ways of working and organising work.
This digital transformation has only just begun. There are many more phases ahead. The innovations and experiments of organisations will take us even further into exploring the potential of globally connected digital networks.
What Kind of Community Do You Have?
Enterprise Social Networks reflect the organisation’s culture and the maturity of collaboration in that organisation. As collaboration matures, different modes of engagement arise. Higher levels of engagement aligned to the strategic objectives of the organisation are fundamental to the growing value of collaboration for any organisation.
Connect: The Directory
Many organisations don’t create much community in their networks. Networks or collaboration features imposed without thought or support will often languish. Without clear strategic rationale for collaboration in the organisation, their efforts create a new directory of employees (In many cases, a directory of only those who adopt). The collaboration features are used to create a social profile for individuals and to help people find others using the knowledge of those in the network.
Share: The Salon
When people are freely sharing ideas & their work, the level of engagement in the network rises. The community begins to resemble a salon. A salon can be an inspiring place filled with insightful knowledge and witty repartee. However, it can also be dominated by personalities, expertise and narrow schools of thought. Sharing knowledge is an important step on the journey of collaboration and a foundation for greater connection but posts with links is only an entry level for the human potential of social collaboration.
Solve: The Universal Genius Bar
When trust and engagement is high enough, people will see a community as a place to solve their work and personal challenges. Like a Genius Bar, the community brings now just expertise and ideas, but solutions in the form of resources, processes and other ways to help drive change in the organisation. Well managed communities will be universal in their ability to reflecting the strategic intent of the organisation and the breadth of its people’s interests and purposes.
Innovate: The Platform
Successful cultures of innovation are those where people have a platform to which they can take ideas for development and trial. They also leverage the value of that platform as a way to track, understand and refine new ideas and those in development. When you have an innovation platform built on a rich level of engagement of all your employees, then the value and pace of change, innovation and continuous improvement is accelerated.
Questions to consider:
- Where does your organisation sit today in terms of the nature of the activity in your enterprise social network or other collaboration platforms?
- What level of collaboration fits the culture of your organisation and its strategic goals?
- What are the modes of collaboration that will help your organisation best achieve the value it seeks from bringing its employees together?
- How have you authorised and enabled people to drive change and to collaborate in your community?
- How can you move your organisations network from a Directory or a Salon into more valuable levels of engagement?
- Do you have the leadership, community management and the change agents necessary to build trust, role model change and develop engagement?
The Value Maturity Model and its supporting tools are ways to help organisations plan and execute the development of strategic value in collaboration through enterprise social networks and other communities. For more information on the Value Maturity Model and how it can help you develop collaboration, please contact Simon Terry.
The Problem is Everywhere
The peculiar character of the problem of a rational economic order is determined precisely by the fact that the knowledge of the circumstances of which we must make use never exists in concentrated or integrated form but solely as the dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess. The economic problem of society is thus not merely a problem of how to allocate “given” resources—if “given” is taken to mean given to a single mind which deliberately solves the problem set by these “data.” It is rather a problem of how to secure the best use of resources known to any of the members of society, for ends whose relative importance only these individuals know. Or, to put it briefly, it is a problem of the utilization of knowledge which is not given to anyone in its totality. – Friedrich A Hayek “The Use of Knowledge in Society”
Yesterday I met with an organisation that wanted some of my help as they sought to solve a problem. The organisation was developing a new knowledge sharing system to enable is staff to be better informed about products and processes. There was one slight issue with this problem. The organisation already had multiple systems to enable its staff to be better informed about products and processes: intranets, social networks, training, help & support tools, automation, etc.
As we asked why these other systems didn’t work it became clearer that the project team’s issue was that it was solving a problem for others, rather than with others. The explanations for needing a new system did’t stack up and suggested there was more that needed to be learned from the users:
- ‘Most of the learning is peer to peer. We need to give them better options’: Why do they prefer to learn from peers who might be inaccurate or unavailable? Why will they change this if you offer a new system?
- ‘They won’t use a collaboration system because they say they don’t have the time’ : if time is a question of priority, why isn’t it a priority? To what extent is the culture, leadership and performance management of the team driving this lack of priority? If they won’t collaborate why will they have the time to use something else? What is there time actually spent on? What do they do instead?
- ‘Those system don’t give them the answers they need so we are building a new one’: If the last system didn’t understand what was required, how do you? What does relevance look like to each user? What does relevance look like to their customers?
- ‘They want help with process X, but we are building something innovative for all processes’: Why do they want help with that process? What’s innovative about ignoring the demand?
The Answer is Everywhere
The answers to these questions are dispersed in a wide range of people beyond the project team. They draw in questions of culture, of practice, or rational and irrational behaviour by real human beings doing real work under the daily pressures of customers and a large organisation. There’s a lot of learning to do.
We have the tools to solve this dispersion and gather insights into what needs to be done in the practices of Big Learning:
- we can actively collaborate with the users and other participants in the system to get under the pat answers and explore the deeper reasons and problems
- we can use the practices of design thinking to better understand and shape employee behaviour & the systems involved in action
- we can analyse data to understand in greater detail what is going on
- we can experiment and iterate to ensure that proposed changes work the way that we expect
- we can enable and empower the users to create changes to their work
- we can accelerate the interactions and the cycles of learning to move faster to better solutions
These aren’t parallel techniques to be applied independently. The practices of Big Learning work best as an integrated system that draws together the insights from all of these approaches to help organisations learn and work. Big Learning enables organisation to work with and through its employees to deliver change. Change does not have to be done to them.
The reason organisations need to develop systems to facilitate Big Learning is elegantly described by Hayek in the conclusion to his essay “The Use of Knowledge in Society”. Hayek was critiquing the schools of economists who thought that centrally planned interventions designed by experts would be effective. The context may differ but organisations still use forms of central planning by experts to create change. These changes fall short for a fundamental reason – experts can’t know enough alone:
The practical problem, however, arises precisely because these facts are never so given to a single mind, and because, in consequence, it is necessary that in the solution of the problem knowledge should be used that is dispersed among many people
The practices of Big Learning help bring people together to share insights, learn and work as one.
The Double Loop Learning of Working Out Loud
Today I presented a case study at Learning Assembly Australia (#learnaus) on my personal practice of working out loud. Like many such presentations, we were soon discussing the value of working out loud on the practice of working out loud. We needed the help of my #wolweek colleague, Jonathan Anthony, the master of meta when it comes to working out loud.
However, there is an important reason working out loud commonly creates this experience. Working out loud fosters double loop learning.
The Double Loop
The concept of double loop learning is expounded in Chris Argyris’ classic article ’Teaching Smart People How to Learn’. Argyris contrast double loop learning with the single loop of every day problem solving. He expresses double loop learning this way:
if learning is to persist, managers and employees must also look inward. They need to reflect critically on their own behavior, identify the ways they often inadvertently contribute to the organization’s problems, and then change how they act. In particular, they must learn how the very way they go about defining and solving problems can be a source of problems in its own right.
Working Out Loud Facilitates Double Loop Learning
When you narrate work in progress and do so visibly, you expose to others the single loop in process. Suddenly your behaviours, context, assumptions and approaches are open for review. When you begin to answer questions or respond to suggestions of others on your work, you are prompted to reflect on the approach you have chosen. This process of reflection on how you are working opens up double loop learning.
Many people discover the presence of others is not even required for double loop learning to occur. The process of getting your work visible and shareable can help you to realise new and better ways of achieving your goals. This process can also cause you to reflect on your role in the wider system with whom you are about to share your work. There is nothing quite like the challenge of expressing your thoughts to straighten out your thinking.
The power of double loop learning is that it can help realise breakthrough change in your personal effectiveness. By clearing the blockages, assumptions and other constraints that you have imposed on yourself, your work effectiveness increases. New avenues for learning open up. Importantly, learning accelerates because the work & the reflection accelerate. The faster you move around both single and double learning loops the greater the progress towards mastery.
Working Out Loud is a reflective practice. Use it to develop your double loop learning. Working Out Loud is a practice to help ‘learn how to learn’.
The Last Thing We Need is an Enterprise Social Network
Re: The Last Thing We Need is an Enterprise Social Network
The purpose of this email is to explain why the last thing we need is an enterprise social network.
This email is in response to the conversation about enterprise social networking in the executive leadership meeting yesterday. We thought it best to summarise the position of the leadership team, because yesterday’s conversation got derailed by anecdotes about social media, technology terminology, fear of change and discussion of abstractions like collaboration, future of work and new organisational structures. Before you left the meeting, you remarked “Based on this discussion, I think an enterprise social network is the last thing we need”. We agree.
We don’t want faddish technology. We need execution of strategy.
As CEO, you’ve been rightly suspicious of all this discussion of social inside the organisation. It is bad enough that your teenage children never look up from using social media on their phones. Whatever that involves, it can’t be needed activity in our organisation. We are a place of work.
What made this country great was well-run organisations, hard work and increasing effectiveness in creating value for customers. That takes focused strategy, disciplined execution and a willingness to do the hard yards. Great organisations aren’t built by chasing technology whims. They come from executing strategy to create better value. When we need to create better execution on strategy, the latest fashionable technology is the last thing you need.
We need better strategic value creation
Times are tough. Industry is more competitive than ever and change keeps increasing. We know customer and shareholder value needs to go up and costs need to come down. We have a strategy that is about meeting these new customer & stakeholder expectations, improving the organisational efficiency and delivering the returns that shareholders demand. We all wonder from time to time whether everyone in the organisation gets the imperative of the new strategy and whether they are all working hard enough to find new ways to create value. We know that we perform better when we have better conversations to make sure that our employees are aligned to the strategy. What we don’t need are distractions when there’s doubt that people even understand the strategy.
When we need strategically aligned value creation, the last thing you need is an enterprise social network.
We need new more effective ways of working
To fulfil the strategy of the organisation, we know as a management team that we will have to start to work in new more effective ways. There has been too much wasteful duplication of work in the organisation. Too many of our processes & policies don’t line up across the silos, aren’t agile enough for the environment and don’t meet customer needs. Both our customers and our employees complain about how badly we do this. We need to start working in new and different ways to identify, solve and improve this on a continuing basis. We have to focus everyone on find and using better work approaches that help us to fulfil the strategy.
When we need working in new and more effective ways, the last thing we need is an enterprise social network.
We need to change management and leadership in every role
Working in more effective ways will likely require us to change the way management works. We are going to need to push decisions down to people closer to the customer and give our people the ability to fix problems. We will need our managers to move from command and control to a coaching and enabling role. We need to ensure that all our people are realising their potential and able to work to create new sources of value. Of course in this new role, middle management will need to be trimmed and the new flatter organisation will need to change more often as we respond to further changes driven by our customers. Employees will need to step up into a leadership role in these changes and with customers, the community and the organisation.
When we need to change the culture of management and asking every employee to play a bigger role in leadership, the last thing we need is an enterprise social network.
We need different conversations
Changing the culture of management is going to demand very different conversations in our organisation. We are going to have to find ways to make sure that conversations are efficient and effective. We need to leverage the contributions of more people from across the organisation. We won’t be able to rely on long meetings, workshops, speeches, video and emails. Did you see the budgets for communications, off sites & roadshows in the forecast for next year? We have to do something different. We will need to involve our people more in making decisions. If that’s going to happen our people will need to be better informed and better able to channel their contributions. Our people will need ways to inform themselves, learn by pulling what they need, share ideas of how to work better and collaborate to solve work problems. We are going to need to encourage our people to join conversations that use their capabilities to innovate, to create value for customers and create new forms of working.
When you need to change the conversations, collaboration and culture of an organisation, the last thing you need is an enterprise social network.
We need more from our people
We wrapped up the last executive leadership meeting reflecting on how big these demands will be on our people. We will be asking for a lot of change in them, their work and the way the organisation exists around them. We will be asking our people to play an increasing role in the success of the organisation. We will want them to lead new conversations to create the future for this organisation. We need our people to be more engaged because we will need much more from our people.
Conclusion: What we need
After you left the executive leadership meeting to catch up with the board, we realised that we are clear what we need as an organisation:
- we need to succeed by fulfilling our strategy to create greater value in a rapidly changing market; and to do that
- we need to be able to work in new & better ways that create a more effective, agile and responsive organisation; and to do that
- we need a new culture in management and more leadership from our people; and to do that
- we need new conversations that enable our people to discuss and act on creating better strategic value; and to do that
- we need more engagement and a better ability to leverage the potential of our people to contribute to and lead this change; and to do that
- we need an enterprise social network to support the first 5 steps.
If you are surprised by point 6, think back through the needs again. After all you were the first to say that an enterprise social network is the last thing we need. We don’t want an enterprise social network because it is new technology or because it is good for some abstract goal. We need one to help our people to execute on the changes necessary to achieve the goals of our strategy. Enterprise technology only makes sense when it enables us to work in new ways that deliver strategic value. As your management team we can see that the value creation opportunity is compelling. We couldn’t see it when you made your remark, but we have come around to your perspective.
The paperwork required by our old process is already on your desk, but a number of our people have started experimenting with solutions to see what value we can create. (Interestingly, their first suggestion is a better procurement process.) When you get back from the board, your assistant will show you how to log-in and join us discussing how we implement in the new enterprise social network.
Thanks for challenging us to come up with a better way of working.
Please think of the environment and don’t print this email. We’d encourage you to discuss it on our new enterprise social network instead.
If this post sounds familiar or if you would like to create greater value in your enterprise social network or discuss how the Value Maturity Model applies to assist your organisation to create strategic value through enterprise social networking and collaboration, please get in contact. I am available through @simongterry or Linkedin or www.simonterry.com
The Network Navigator
The power of a networked world is shifting the emphasis of work from expertise to navigation. Are you ready to move from expert to network navigator?
From Expert to Navigator – a financial services example
Research into perceptions of an advice relationships in financial services consistently often comes up with a common theme. Usually, the financial services organisation is keen to build a trusted relationship with the client as an advisor and to demonstrate its depth of expertise in the advice process.
However, these goals are rarely what the client is looking to achieve. The client is often more interested in building a relationship with someone who is responsive to their needs and who can to help them navigate the complexity to find their own answers. The complexity the client needs to navigate is not just the financial decisions; it includes the organisations own advice and service processes. In times of complexity, uncertainty & change, clients are reluctant to be dependant on someone else’s expertise. They want control. They want to be guided across the map of choices and find an easier way through the process.
The Network Navigator
Networks and the increasing pace of change that they bring about are having a similar disruption for the traditional model of expertise-based advice.
Relying on a proprietary stock of knowledge is no longer enough to justify an advice proposition. Knowledge is increasingly a flow. Stocks of knowledge are out of date too quickly as the network learns more faster by sharing. If clients want access to stocks of knowledge, they can find the information themselves (& access a greater diversity of insight and experience) if they are prepared to put in the time and effort. Doing that work for them on an outsourcing basis is a low value task.
The challenge of a networked era is no longer gathering a stock of knowledge. The challenge is leverage rapid flights of knowledge and guiding others through networked knowledge creation. The skills that rise to the fore are no those of hoarding a stock of knowledge. The skills are those of being able to connect people, share capability and create new knowledge together.
The 8 Skills of a Network Navigator
A network navigator does not need to know the answer. They do not even need to know the whole way to the solution. They need to be able to lead others, to leverage the knowledge of the network and to find a way forward in collaboration to create new value:
- Setting a course: In a complex world often the purposes, goals and questions are as unclear as the answers. Helping people clarify their objectives and questions before and during their engagement with the network is a critical role that the network navigator can play.
- Seeing the big picture map: Navigators are people who can hold the network system in view and manage the micro detail to guide people forward. A navigator creates new value with an understanding the broader map and new & better paths that others may not have considered.
- Make new connections: Increasing the density of networks can be critical to creating new knowledge and value from network interactions. Bridging weakly connected groups is another role that navigators can play to realise new insights and value.
- Recruiting a crew and local pilots: Building community matters in new network ways of working. Community takes connection to a deeper and more trusted level and begins to accelerate learning and change. Network navigators know how to recruit crew to their travelling community and add local pilots as they need to learn faster in new parts of the network.
- Translating strange cultures: Connecting diverse groups often means that there are differences of context, language and culture to be bridged before conversations can create new knowledge. Network navigators have the skills to understand and share diverse inputs.
- Logging the journey: A network navigator works out loud to record their journey and let others contribute and benefit from the record. A network navigator nows there are many others seeking the same answers or looking for better paths forward and makes that possible by sharing their work and inviting others to contribute.
- Weathering storms & avoid shoals: Journeys through networks are not linear and often unpredictable. The navigator has the experience and the confidence to see others through the storms and to sustain others in their journeys. Most importantly, when the storm is darkest, they have the passion to keep pushing and keep experimenting.
- Navigating where there is no map: Network navigators need to be able to embrace uncertainty and ambiguity. They need to be able to lead others forward to learning even if it is dark and there be monsters.
Acknowledgements: This post is in large part inspired by conversations with a wide range of participants that occurred during John Hagel’s recent visit to Melbourne for the Doing Something Good dinner and Centre for the Edge workshops that I attended. It is also informed by ongoing conversations about new networked ways of working among all members of Change Agents Worldwide.
So is ignorance an impediment to progress or a precondition for it? In a recent New Yorker article Malcolm Gladwell discusses Albert O. Hirschman’s work on how creativity can be driven from our efforts to recover from ignorance
Many entrepreneurs strike us as remarkably naive. They dared to act whether others saw only risk.
Hirschman wrote the book Exit, Voice & Loyalty, that I read in a long ago economics degree. I would recommend Hirschman’s book to anyone as it is short, an easy read and amazingly insightful as is discusses the choices of consumers, community and employees to agree, exit or speak up.
That book was a revelation to me because it helped me to clarify that there was a powerful path between acceptance and refusal. There is another path between buying or selling. You don’t have to choose only to stay or exit. You can also speak up for change. Usually it is only when people speak up that the system is able to understand the meaning of the otherwise silent & often missed exits.
Reading Exit Voice and Loyalty led me to the opinion that it is usually better to make your first choice to find some way to speak up or make change happen from within the system. There are only so many opportunities for exit or acquiescence. At some point, we all need to shape things in our world. We can all do this more.
Speaking up gives others the chance to respond to your needs or concerns. Speaking up defines the unnoticed issues. Speaking up is not without risk and conflict. In many cases, it demands the creativity or the naïveté of the entrepreneur to safely make your point and generate change.
In an age of technology to enable collaboration and social interaction, we all need to accept that more connected consumers, communities and employees have many more means to express their views. As voice moves from rare to common, these stakeholders will increasingly prefer voice to slipping quietly away.
We should hope that voice is the growing preference too. After all, losing the support of others is a form of feedback, but not particularly useful feedback.
Speak up and encourage others to speak up too.
NAB user-led innovation in Image and Data Manager
This article by Image and Data Manager on the NAB case study of user-led innovation in Yammer is based on my presentation at the Australian Sharepoint Conference in Sydney and Melbourne.