{"id":2754,"date":"2024-01-24T10:17:16","date_gmt":"2024-01-24T10:17:16","guid":{"rendered":"https:\/\/www.praxonomy.com\/blog\/?p=2754"},"modified":"2024-02-23T15:44:29","modified_gmt":"2024-02-23T15:44:29","slug":"if-the-board-executed-their-own-digital-transformation","status":"publish","type":"post","link":"https:\/\/boardlogic.formidium.com\/blog\/if-the-board-executed-their-own-digital-transformation\/","title":{"rendered":"Maybe if the Board executed their own Digital Transformation, they&#8217;d be better positioned to lead a successful Digital Transformation for their organisation?"},"content":{"rendered":"\n<p><strong>With 70% of Digital Transformation programmes apparently ending in failure, <a href=\"https:\/\/www.linkedin.com\/in\/alan-f-hewitt\/?originalSubdomain=uk\">Alan Hewitt<\/a> explains why boards need to stay on top of developments, and how. <\/strong><\/p>\n\n\n\n<p>In 2011 the consulting firm Capgemini, (in partnership with MIT), coined the term \u201cdigital transformation.\u201d At the time they defined the meaning as \u201cthe use of technology to radically improve performance or the reach of businesses.\u201d<\/p>\n\n\n\n<p>But just how long has \u201cDigital Transformation\u201d really been around? This <a href=\"https:\/\/magenest.com\/en\/history-of-digital-transformation\">website<\/a> says:<\/p>\n\n\n\n<p><em>&#8220;Despite being a relatively new concept, digital transformation has a long history. It can be traced back to the late 1970s when computer-aided design and manufacturing were first used in businesses. This was followed by the introduction of enterprise resource planning in the 1980s and customer relationship management in the early 1990s.&nbsp;<\/em><\/p>\n\n\n\n<p><em>Each of these technologies aimed to improve efficiency and productivity by digitizing manual processes. In the late 1990s, we saw the rise of eCommerce and online banking. These activities were initially carried out offline but were later moved online as internet speeds increased. This was followed by the introduction of social media in the mid-2000s, which revolutionized how we communicate and share information.<\/em><\/p>\n\n\n\n<p><em>When companies first started using digital channels, they focused on connecting with their customers. This was followed by the emergence of digital processes to support customer interactions. As companies\u2019 digital ambitions grew, they soon realized that they needed dedicated digital teams to manage new social and mobile channels.&nbsp;<\/em><\/p>\n\n\n\n<p><em>Over the past decade, we have seen a renewed focus on digital transformation as businesses strive to remain competitive in a global marketplace. Although the concept is not new, it has taken on a new urgency in recent years.\u201d<\/em><\/p>\n\n\n\n<p>In June 2023 McKinsey said in this article (<a href=\"https:\/\/www.mckinsey.com\/featured-insights\/mckinsey-explainers\/what-is-digital-transformation\">What is digital transformation?<\/a>):<\/p>\n\n\n\n<p><em>Digital transformation is the fundamental rewiring of how an organization operates. The goal of a digital transformation, as outlined in the new McKinsey book Rewired: A McKinsey Guide to Outcompeting in the Age of Digital and AI (Wiley, June 20, 2023), should be to build a competitive advantage by continuously deploying tech at scale to improve customer experience and lower costs.<\/em><\/p>\n\n\n\n<p>To go into a little more detail I found this article (<a href=\"https:\/\/www.globalsign.com\/en-sg\/blog\/difference-and-similarities-digitization-digitalization-and-digital-transformation#:~:text=While%20digitization%20focuses%20on%20converting,generate%20insights%20from%20their%20behaviour\">Difference and Similarities: Digitization, Digitalization, and Digital Transformation)<\/a> and have extracted this section:<\/p>\n\n\n\n<p><em>So what is digital transformation?<\/em><\/p>\n\n\n\n<p><em>Closely related to digitization and digitalization, digital transformation\u2019s primary aim is to integrate technology to most, if not all, business operations. In digital transformation, digital technology is incorporated into all areas of the business to fundamentally improve efficiency in workflows and create value for customers. Cultural, organizational, and operational changes are implemented through the integration of digital technologies. Digital transformation allows businesses to adapt to ever-changing industry trends and landscapes.<\/em><\/p>\n\n\n\n<p><em>Digitization vs. Digitalization vs. Digital Transformation<\/em><\/p>\n\n\n\n<p><em>One may be easily confused with the meaning of digitization, digitalization, and digital transformation. However, these three concepts vary in different aspects such as their objectives and outcome.<\/em><\/p>\n\n\n\n<p><em>Let us first discuss in terms of the purpose and outcome:<\/em><\/p>\n\n\n\n<ul>\n<li><strong><em>Digitization<\/em><\/strong><em>\u2019s purpose is to encode information in computers by converting from analog to digital format. The process mainly deals with recording data that can eventually be used in digital technologies.<\/em><\/li>\n\n\n\n<li><strong><em>Digitalization<\/em><\/strong><em>&nbsp;deals with information processing, or how digitized data can be used to improve workflows through automating existing processes.<\/em><\/li>\n\n\n\n<li><em>Finally,&nbsp;<strong>digital transformation<\/strong>&nbsp;is all about leveraging knowledge and integrating it in all business areas to enhance engagement and create new value.<\/em><\/li>\n<\/ul>\n\n\n\n<p>I think that this last extract is very useful as it outlines and suggests that there is a progression through a few stages to go from an Analogue World to a fully Digitally enabled working environment.<\/p>\n\n\n\n<p>So this seems all to be good and a practice that all organisations should take up and drive through doesn\u2019t it? Yet if you read this Deloitte article (<a href=\"https:\/\/www2.deloitte.com\/content\/dam\/Deloitte\/uk\/Documents\/about-deloitte\/deloitte-uk-digital-transformation-are-people-still-our-greatest-asset.pdf\">Digital Transformation Are people still our greatest asset? [PDF]<\/a>) it would seem that 70% of Digital Transformations fail, which really isn\u2019t a great statistic.&nbsp;<\/p>\n\n\n\n<p>Here is an extract but I would recommend reading the full article.<\/p>\n\n\n\n<p><em>&#8220;As you consider the impact of exponentials and begin thinking more deliberately about how and where to innovate, it is easy to become distracted by thinking \u2018this is all about technology\u2019. Alarmingly, this rationale has also infiltrated the boardroom. As many as two thirds of CEOs believe technology will create more value in the future than people will as senior leadership prioritise investment in the tangible (technology), at the expense of the intangible (people)&nbsp;<\/em><\/p>\n\n\n\n<ol>\n<li><em>History is littered with examples of failed transformation efforts, it happened in e-commerce, with the likes of Staples and Walmart, it happened with analytics and big data, when Sears and Zynga invested big in analytics centres that never returned on the investment. And now it\u2019s happening with digital transformation&nbsp;<\/em><\/li>\n\n\n\n<li><em>70% of transformation efforts fail and it takes around three years for organisations to even begin competing in the digital market, even when they get it right. At the heart of most failures is not the technology, it\u2019s the people. The most prevailing reasons for failure? \u2018management behaviour not supporting change\u2019 and \u2018employee resistance to change\u2019<\/em><\/li>\n\n\n\n<li><em>Failures are often characterised by a lack of urgency, a reluctance to adopt, a fear of change and a lack of clarity about \u2018where we\u2019re headed and why\u2019, all factors that are rooted in the psychology of an individual or team, and all factors that can be addressed by good leadership. It\u2019s important not to lose sight of the fact that people remain at the heart of any business. Therefore, understanding the psychology of human behaviour is critical to leading successful transformation. It is our assertion that in the digital era that: Good leaders are our greatest asset.&#8221;<\/em><\/li>\n<\/ol>\n\n\n\n<p>Deloitte go onto say, in the same article<\/p>\n\n\n\n<p><em>&#8220;Current approaches to digital transformation are heavily focused on the process, technology and the execution plan. However, this approach is short-sighted. The greatest obstacle to digital maturity, as George Westerman Principal Research Scientist from MIT Sloan puts it, is where organisations \u2018think about transformation as a technology challenge instead of a strategy or leadership challenge\u2019, and that \u2018in digital transformation, the transformation is more important than the digital 6.<\/em><\/p>\n\n\n\n<p><em>If digital is the \u2018What\u2019 of a transformation, then Leadership is the \u2018How\u2019.\u201d<\/em><\/p>\n\n\n\n<p>So clearly Company Boards have a lot of thinking to do about how they look at their own organisations and ensure that they remain competitive by exploiting the opportunities that the introduction of Technology can enable and not become one of the 70% who try and fail?. If advances in technology weren\u2019t fast enough the introduction of new AI based products and offerings will both complicate and accelerate the advances and, I think that it\u2019s fair to say, aren\u2019t and mustn\u2019t be seen as a passing phase.<\/p>\n\n\n\n<p>The Deloitte Paper &#8220;Bringing Digital to the Board Room&#8221;&nbsp;says:<\/p>\n\n\n\n<p><em>Current approaches to digital transformation are heavily focused on the process, technology and the execution plan. However, this approach is short-sighted. The greatest obstacle to digital maturity, as George Westerman Principal Research Scientist from MIT Sloan puts it, is where organisations \u2018think about transformation as a technology challenge instead of a strategy or leadership challenge\u2019 . . . If digital is the \u2018What\u2019 of a transformation, then Leadership is the \u2018How\u2019.<\/em><\/p>\n\n\n\n<p>I find this a really interesting comment as it mirrors what we, at Praxonomy, think, namely that Boards should appoint an AI representative but that this person&nbsp;<strong><u>Should Not<\/u><\/strong> be an IT person. Transformation, as Deloitte very clearly say, is about people enabled by technology. Where change is driven primarily by technology it will, in my opinion, have a reduced chance of success.<\/p>\n\n\n\n<p>I am obviously biased as we are looking to promote and sell our product Boardlogic to boards to, we hope, make them more efficient and more effective, but those gains will only be realised if the technology is used and adds real value.<\/p>\n\n\n\n<p><strong><u>Again Deloitte go onto say:<\/u><\/strong><\/p>\n\n\n\n<p><em>THE TOOLS: THE ADVANTAGES AND CHALLENGES OF BOARD PORTALS<\/em><\/p>\n\n\n\n<p><em>Recent technological advancements have led to the rapid adoption of board portals as a vehicle for board communications. These portals are intended to support the easy sharing of documents and data between board members and management. In fact, many written board communications today happen via board portals.<\/em><\/p>\n\n\n\n<p><em>Board portals deliver several benefits over old-school paper-based communications, and even over electronic document sharing without a mechanism for coordination and centralisation. For one thing board portals are designed to be protected, trackable electronic tools that cannot easily be lost as paper documents can.<\/em><\/p>\n\n\n\n<p><em>On &nbsp;the &nbsp;pragmatic &nbsp;side, board portals give directors a single place to go for information, eliminating the need to keep track of multiple communications delivered in hard copy or through email.<\/em><\/p>\n\n\n\n<p>BUT<\/p>\n\n\n\n<p>THE CONTENT: TOO MUCH INFORMATION, NOT ENOUGH TIME<\/p>\n\n\n\n<p>It is well known that boards receive a great deal of information to digest in a limited amount of time. In fact, the aforementioned Fed proposal on enhancing board effectiveness noted that \u201cboards of large financial institutions face significant information flow challenges [and can be] overwhelmed by the quantity and complexity of information they receive. Although boards have oversight responsibilities over senior management, they are inherently disadvantaged given their dependence on senior management for the quality and availability of information.\u201d<\/p>\n\n\n\n<p>I think that this brings me back to an earlier point in this Blog Piece:<\/p>\n\n\n\n<ul>\n<li><strong><em>Digitization<\/em><\/strong><em>\u2019s purpose is to encode information in computers by converting from analog to digital format. The process mainly deals with recording data that can eventually be used in digital technologies.<\/em><\/li>\n\n\n\n<li><strong><em>Digitalization <\/em><\/strong><em>deals with information processing, or how digitized data can be used to improve workflows through automating existing processes.<\/em><\/li>\n\n\n\n<li><em>Finally, <strong>digital transformation<\/strong> is all about leveraging knowledge and integrating it in all business areas to enhance engagement and create new value.<\/em><\/li>\n<\/ul>\n\n\n\n<p>The temptation is certainly to just digitise what you do today and I have seen examples where the information being provided via Board Portals is literally a scan of what the paper output would be. In a Blog Piece that I wrote in July 2019 (<a href=\"https:\/\/boardlogic.formidium.com\/blog\/think-like-a-director-writing-effective-board-papers\/\">Think Like a Director: Writing Effective Board Papers<\/a>) I emphasised the need to present information in a way that is easy to digest for the directors reading it and where the main points that the directors need to understand are clear and presented upfront.<\/p>\n\n\n\n<p>In the article I said:<\/p>\n\n\n\n<p>&#8220;I\u2019d like to take a look at the many documents that we have to read online \u2013 be it on a laptop, tablet, or phone \u2013 in preparation for a board meeting. Many people still tend to print out documents on paper to read them because it\u2019s easier to skim through in that format.<\/p>\n\n\n\n<p>Do we do that because the documents that we receive aren\u2019t written with the reader in mind or the medium on which they will be read? Throughout my working life, I have been involved in writing many proposals which, almost without exception, started with an \u201cExecutive Summary\u201d before delving into details at length. The \u201cExecutive Summary\u201d captured the essence of the proposal by highlighting major points.<\/p>\n\n\n\n<p>So if we focus on board briefing papers in board packs, why don\u2019t we create them using a similar approach?<\/p>\n\n\n\n<p>I did some research and came across a method called the \u201cInverted Pyramid,\u201d a story structure used in journalism where the most important information \u2013 or what can be considered the conclusion \u2013 is presented first. In an inverted pyramid, the widest section contains all the \u201cneed-to-know\u201d information, while the narrowest portion of the pyramid holds the \u201cnice-to-know\u201d details.&nbsp;<\/p>\n\n\n\n<p><strong>Conclusion<\/strong><\/p>\n\n\n\n<p>So in conclusion. Technology will keep offering new business opportunities and threats to virtually every organisation. Boards must stay ahead or at least on top of those developments and how they may or may not be of value to their organisations. Just digitising what you do today may be the next step towards a full Digital Transformation but certainly isn\u2019t the end game. A key point for me is, as Deloitte say, &#8220;<em>If digital is the \u2018What\u2019 of a transformation, then Leadership is the \u2018How\u2019.\u201d&nbsp;<\/em>Transformation means change and change always involves people. As I outlined in my last Praxonomy <a href=\"https:\/\/boardlogic.formidium.com\/blog\/boiling-frogs-bad-backs-and-the-art-of-the-possible-feasible-and-desirable-for-ai-and-your-organisation\/\">blog piece<\/a>, &#8216;change&#8217; is challenging as the 70% of failed Digital Transformations show. So my recommendations are:<\/p>\n\n\n\n<ul>\n<li>Make Digital Transformation a standing agenda item on board meetings<\/li>\n\n\n\n<li>Ensure that you have a Digital Transformation lead on the Board\n<ul>\n<li>That person should not be an IT Professional unless they have the almost unique mix of IT and Business experience\/skills<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li>Ensure that you are working with the clearest and best information (hopefully enabled by technology)<\/li>\n\n\n\n<li>Recognise that change is neither quick nor, in reality, ever ending\n<ul>\n<li>There will be increasing numbers of technology based opportunities that will need the business to adapt and change the way that it thinks and operates. Embrace those opportunities and drive through the changes required even when the going gets tough.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>FINALLY<\/strong>&nbsp;make sure that&nbsp;<strong><u>ALL<\/u><\/strong>&nbsp;board members have the information that they need, presented in an easily digestible format that enables them to make good and well-informed decisions.<\/li>\n<\/ul>\n\n\n\n<p><\/p>\n\n\n\n<p>If you would like to learn more about Boardlogic click <a href=\"https:\/\/boardlogic.formidium.com\/why-boardlogic\" target=\"_blank\" rel=\"noreferrer noopener\">here<\/a><br>Or schedule a demo with us <a href=\"https:\/\/boardlogic.formidium.com\/schedule-a-demo\" target=\"_blank\" rel=\"noreferrer noopener\">here<\/a><\/p>\n<!-- AddThis Advanced Settings generic via filter on the_content --><!-- AddThis Share Buttons generic via filter on the_content -->","protected":false},"excerpt":{"rendered":"<p>With 70% of Digital Transformation programmes apparently ending in failure, Alan Hewitt explains why boards need to stay on top of developments, and how. <!-- AddThis Advanced Settings generic via filter on get_the_excerpt --><!-- AddThis Share Buttons generic via filter on get_the_excerpt --><\/p>\n","protected":false},"author":5,"featured_media":2764,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[1,5,2],"tags":[10,23,24,40],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.4 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Maybe if the Board executed their own Digital Transformation, they&#039;d be better positioned to lead a successful Digital Transformation for their organisation? 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