Digital Disruption Is a People Problem

Companies will effectively navigate the challenges posed by digital disruption if they look at them as organizational and managerial problems, rather than technical ones.

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Many treatments of digital disruption regard the rapid pace of technological innovation as the key problem facing organizations. It’s true that technological innovation is happening at a faster rate than ever before. Computers continue to become smaller, cheaper, more powerful, better connected, and embedded everywhere. Yet while the increasing rate of technological innovation is a significant part of the digital disruption challenge facing companies, it is not the problem in and of itself. It’s not even the most important part of the problem.

The true key problem facing organizations with respect to digital disruption is people — specifically, the different rates at which people, organizations, and policy respond to technological advances. Technology changes faster than individuals can adopt it, individuals adapt more quickly to that change than organizations can, and organizations adjust more quickly than legal and societal institutions can (as depicted in the below chart from Deloitte’s 2017 Human Capital Trends study). I refer to these differing gaps respectively as adoption, adaptation, and adjustment. Each of these gaps poses a different challenge for companies with respect to digital disruption.

Adoption

Adoption describes the gap between the rate at which technology changes and the rate at which individuals make those changes a part of their daily life. In his seminal work, Everett Rogers labeled innovation adopters based on various rates and phases: innovators, early adopters, early majority, late majority, and laggards. The result is a logistic function of cumulative adoption by which innovation occurs rapidly as the early and the late majorities begin to adopt. This adoption curve is certainly still relevant to technology companies and IT functions that are trying to drive the implementation of certain types of technology by employees in the marketplace or across the enterprise.

Despite the variability, with a significant portion of individuals lagging behind, adoption is not the most critical problem most managers face with respect to digital disruption — because individuals are generally still adopting technology faster than the organization can adapt to it. As people now have easy access to robust consumer-facing technology products (versus depending on their employers for these formerly costly devices and services), they’re able to gain quicker fluency with new technologies.

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Comments (6)
Richard Parsons
Interesting article, raising a number of critical aspects in which companies traditionally fail at managing Organizational change, and Transformation.
I say "companies" specifically because it is too generalistic that this challenge is a people only problem, when in reality it is not, because people are actually very adept at change, adaptation, adoption, and adjustment.
The speed of Digital Transformation is not being driven by companies, but the expectations and demands of customers who are rapidly changing already.
10 years ago people didn't know they needed an iPhone, yet people quickly adopted the technology, adjusted their behaviours through smartphones, and adopted new digital lifestyles; and why was this? 
Because people saw the value adopting an iPhone would bring, how it delivered a new experience, and how it could make life simpler and easier.
Putting Digital on the front of "change" or "transformation" does not make it any different to manage, because the 3 core principles that define how to manage change, disruption and transformation remain the same, and yet companies fail so badly and so frequently at answering and managing these 3 fundamental basics of change.
1) What is the value of this change to me?
2) How will this change or impact my experience positively or negatively?
3) What does my employer expect from me, and what will i receive in return?
Luigi D'Angola
Niccolo' Machiavelli said that “It must be remembered that there is nothing more difficult to plan, more doubtful of success, nor more dangerous to manage than a new system. For the initiator has the enmity of all who would profit by the preservation of the old institution and merely lukewarm defenders in those who gain by the new ones. ” 
Still true after 500 years.
Armen Mnatsakanyan
Very good article.
As a management specialist, I can say that "Companies will effectively navigate the challenges posed by digital disruption if they look at ..." their own Management System!
Modern theories and modern practice pay little attention to the construction of the Management System!
In practice, the old Taylor (engineering) approach dominates.
He was slightly softened by economic and psychological approaches, but in principle the Taylor approach did not change.
As before, the formula "I'm the boss - you're a fool" dominates the management.
We, still, are dealing with "intuitive management" (Peter Drucker).
The crisis in the theory and practice of management is most clearly manifested in "the challenges posed by digital disruption."
I agree with Gerald that the problem is in the inadequate response of individuals and organizations to "the challenges posed by digital disruption."
The problem is very serious.
We will have to revise the entire theory of management anew and abandon many of the usual ideas.
A rejection of old and familiar knowledge is the most difficult thing that can ever be.
Working now on "the General theory of management" I understand how deeply we will have to change the usual ideas about management.
Keith D. Patch
Hi Elizabeth--

Your story is so sad. You certainly have a story to tell, and you should have companies beating their way to your door.

Also, I can't find you on Twitter, As one who is espousing the value of fluency in virtual connections, should you not have a good presence there?

Best regards,

--Keith
@KeithDPatch
Elizabeth Valentine
As we say here in New Zealand - he tangata, he tangata he tangata - it is people, it is people, it is people! But here's the twist when it comes to decision quality and change.

According to my own research digital leadership (strategy, policy, execution, risk and opportunity realisation etc) is underpinned by individual competency. Individual competency is the foundation of building team, divisional  and organisational capability. 

The serious (global) challenge is the individual competency and collective capability of digital leadership from the board and c-suite down. I scanned all the major consulting firm board / exec surveys relating to things digital from 2012 - 2016, and it's not pretty. Neither have the statistics changed significantly when it comes to perceptions of capability at the top.  

Bottom line is the very very poor to variable capability of senior leaders from non-Information and Technology backgrounds. A significant percentage lack the capability to lead, strategise and govern in a digital world, which might help things happen at pace. 

In 2016 I published the first known multi-sector validated competency set for this target audience. I regret to say my door has yet to be broken down by any rampant interest in building capability...
Alok Bhatia
Excellent article. Change initiatives often fail because of a lack of understanding that people need to change.