There are many sources about Digital Transformation of Businesses. But which one’s fit your needs? Those aimed at how to transform Operations or those how to create new Products? Those about Business or those aimed at an IT audience? Here is some advice where insights can be found for your information needs.
Quadrant 1: Transformation of Operations
Most Literature on Digitalization is really about how to come up with great, innovative products. There is fewer – and much less popular literature – on the way that Operations can be transformed by digital Technologies. Understandably, the prospect of inventing your way to the next big thing attracts many more readers that changing something existing.
Out of all sources i have read so far i would recommend to read Team of Teams by Stanley Mac Chrystal et al. It is not only an entertaining read, but it shows so much of the value of less hierarchical, network based organizational models, driven by a common mission and a shared understanding of data.
“Teams of Teams” even beats the name patron of this blog, “The signal and the noise” by Nate Silver. Within this book “the Art and Science of prediction” is explained. This seems to be a rather specialist subject at first, but once you read the book you will find lots of hints how to use data in businesses to transform operations. After all truly great operations are not about executing the same process with minimal defects day by day. Thats good – but won’t be enough. Truly great operations…
- constantly experiment to adjust and re-adjust such tedious things as stock levels or daily sales figures.
- embraces uncertainty and statistic concepts as variance and significance. It does not jump to conclusions, it methodically validates assumptions
- Supplements executional hierarchy with network worked team structures and supports those structures with new approaches to management
Q2: Operational Excellence
Operational Excellence is, as I defined it in the 4 field matrix above “non IT related”. But still, anyone who chooses to ignore insights of Jim Collins classic “From Good to Great” will pay a dear price. It is simply not enough to invent your way to a good product as a start-up, there must be executional excellence, too, in order to achieve break-through success.
Elon Musk, Jeff Bezos and Steve Jobs all faced massive Problems in the field of Operational Excellence. They needed to scale their business operations fast, reliably and efficiently. The art of scaling business operations is best described in Robert Sutton’s “Scaling up Excellence“. For me one of the most memorable phrases of this book is “do not scale mediocrity, scale excellence“. Why? Because there are so many executives around who just scale what they have and bet on the magic of “economics of scale” to do the work – and wonder why this strategy produced mediocre results. Simply put: “If you scale shit – you get…shit”.
Q3: Digital Revolution
Here is the real thing. The stuff that the Poster Childs of the Digital Age are made off. The art of building great products is explained in Eric Rees classic book “Lean Start-up“.
While Eric’s advice is excellent, it is mostly tactical. A greater focus on the business perspective can be found in Salim Ismail’s “Exponential Organisations“, which reads like a check list by stating factors that companies need to address in order to transform themselves for the digital age.
Peter Thiel’s (one of the founders of pay pal) “From Zero to One” is a concise, very outspoken read. Peter Thiel has a quirky character. The only Silicon Vally Magnate that i know of who is a supporter of Donald Trump – even before the republican presidential nomination. He pictures himself to be a “determinate optimist”, i.e. a person who wants to do something great and thinks he can master all uncertainties.
I found his thinking model very interesting, because it is so telling about his or e.g. Elon Musks mindset. It is simplistic, but it is thought provoking. More on this model here.
In the fast changing business environment today, strategy is more important than ever. Strategy may be pictured as the art of knowing when to keep the high ground and when to expose yourself in the plains. But no-one says is better than Harry Mintzberg:
Strategy is a pattern in a stream of decisions.
The pattern that companies should adopt have definitely be changed by digital technologies. Geoffrey Moore provides an answer how the patterns, that make up strategy, change is respect to the challenge a company is facing: Zone to Win.
Still the definition of “patterns in a a stream of decision” might entitle to label even the sight at the bottom of an empty coffee mug to be a “strategic view”: Throw the runes and you will find a pattern! Richard Rumelt in “Good strategy – Bad Strategy” provides more insights. And no: Deciding to grow to revenues to 1 Billion$ does not constitute a strategy. Sorry.
The foundation: Leadership
The basis for all transformation remains sound leadership. And boy, what a volume of advice is available! But most of this is simply here-say and no better than the whole stack of “personal improvement” literature. The number of bad publications is so large, that sound empirical studies are drowned. And beside: Empirical studies don’t sell well.
My advice is to read Jeffrey Pfeffers “Leadership BS“. It is blatantly, unscrupulous realistic, because it is empirical. For example, there is no evidence that:
- Authentic, honest Leaders perform better than liars and braggarts
- Modest Leaders set an example that will result in better performance of the company
- Empathic, Emotionally intelligent leaders deliver better results
That may seem very dispiriting, but it is refreshingly realistic. After all “success” is such a hideously complex and personal thing to measure and humans alter their behaviour often more readily to negative “nudges” (fear, loss, uncertainty) than to positive ones. We may want “Good” to prevail from a moral point of view, but that does not mean it will. Hm, makes me think of the new president elect, the Donald…
Still “Leadership BS” is constructive. It dispels leadership myths, which is useful. Leadership means the willingness to invest yourself, to push the envelop. The power needed for this is bound to come from somewhere inside a leader and here a central set of human values is essential.
The big picture
Digital technologies change not only companies, but society as a whole. But where to?
- To the better for all man kind, as in The second Machine Age (aka techno optimist world-view)
- To something completly new and unforeseeable by 2050, as in The Singularity is near (aka techno-spiritual world view)
- To something new, but material growth wise it simply does not matter so much, as explained in Growth is dead – the digital revolution won’t help (aka techno pessimist world-view)
All these authoritative sources agree that we are in for something completely new on a non material level. According to Yuval Hariri in “Sapiens: A brief history of human kind” humans have left the realm of biology a few thousand years ago and entered the realm of culture. With technology we might even leave the realm of culture. A strong read.