Conceptualizing digitization as an ongoing process of growth and development may help managers better steer companies through their digital adolescence.
People throw around the term “digital transformation” these days, but there’s not much agreement on what that term means. Originally, the value in the term was that it conveyed the need to engage in a fundamental shift in the way we think, work, and manage our organizations in response to digital trends in the competitive environment. While the need for fundamental change remains, the overuse and misuse of this term in recent years has weakened its potency.
What Is Digital Transformation?
Perhaps the most common understanding — that digital transformation is about the implementation and use of cutting-edge technologies — is likely the most misguided. It’s not hard to find a company that has implemented a new digital tool or platform just to have it remain unused by employees or unable to deliver the intended transformative impact on the business.
Another understanding of digital transformation is that it involves organizations using technology to do business in new and different ways. This definition of digital business is certainly better, but it remains incomplete. For example, many companies are adopting new talent models in response to digital trends. Employees engage in two- to three-year “tours of duty,” engaging in one project or role for a certain period of time, at which point they transition to a new role inside the company or outside in order to continually develop different skill sets. These efforts are clearly and intentionally designed to allow the company to cultivate diverse talent in a rapidly changing digital world, but they don’t involve implementing or using new technology at all.
The best understanding of digital transformation is adopting business processes and practices to help the organization compete effectively in an increasingly digital world.
This definition of digital transformation has two important implications for managers: First, it means that digital transformation is fundamentally about how your business responds to digital trends that are occurring whether or not you initiated them, like them, or want them. Much of the need for digital transformation is outside your control. It involves adapting to how your customers, partners, employees, and competitors use digital technologies to change how they act and what they expect. Whether and how your company responds to those digital trends is the key question facing managers.
Second, it means that how an organization implements technology is only a small part of digital transformation. In cases where digital transformation does involve implementing new technologies, the technology is only part of the story. Other issues, such as strategy, talent management, organizational structure, and leadership, are just as important, if not more important, than technology for digital transformation.
But this concept isn’t well expressed by “transformation” — organizations don’t wave a magic wand and instantly become digitally adept. Instead, it’s better expressed as “maturity” (in the psychological sense), which Wikipedia defines as the “ability to respond to the environment in an appropriate manner,” noting also that the “response is generally learned rather than instinctive.”
From Digital Transformation to Digital Maturity
If managers shift their thinking from a focus on digital transformation to a focus on digital maturity, they may find a number of benefits for organizations seeking to adapt to an increasingly digital competitive environment.
First, maturity is a gradual process that unfolds across the organization over time. No child grows up overnight — and no organization can become digitally mature overnight, either. Furthermore, there are different developmental stages throughout an individual’s life — from toddlerhood, to adolescence, to adulthood. Similarly, even though different companies may be at different stages of digital maturity, there are always ways that they can continue to grow and adapt in order to become more digitally mature. It is never too late to begin becoming more digitally mature, and the process is never complete.
Second, just as people do not always know what they will mature into when they grow up, organizations may not fully know what they will look like as they mature digitally. Only a small percentage of children who claim to want to grow up to be firefighters, sports stars, ballet dancers, or astronauts actually do so, yet a lack of foreknowledge of what the outcome looks like doesn’t keep the maturation process from happening. Even though many organizations do not know what a digitally mature version of themselves will ultimately look like, it shouldn’t stop the process from beginning. “Solvitur ambulando,” a Latin phrase that means “it is solved in the walking,” perfectly reflects this guidance: You may only have a better idea what digital maturity is for your company once you start moving toward it.
Third, maturation is a natural process, but it will not happen automatically. Digital maturity is the process of your company learning how to respond appropriately to the emerging digital competitive environment. Yet, it’s also not something that your organization, leaders, and employees will instinctually know how to do. Not even the digital-native millennials necessarily know how to be digitally mature in an organizational context. Managers must develop a working knowledge of digital trends to lead their organizations to adapt in the right ways. Conversely, not responding appropriately to the environment is unnatural. We have likely all known immature people, and certainly most managers don’t want their company to be that type of organization.
More Ahead in July 2017
The purpose of our ongoing research is to identify the factors associated with digitally mature companies and to help managers of organizations at all stages along the maturity spectrum take the next step toward digital maturity. We’re hard at work at finalizing our 2017 report, which is due out in July. Until then, you may want to consider how digitally mature your company is — and whether it’s ready to take the next step toward digital maturity.