Q & A: Surmounting the Data, Management, and Trust Issues Slowing Digital Transformation
Dr. Thomas C. Redman, “the Data Doc,” President of Data Quality Solutions, helps start-ups and multinationals; senior executives, Chief Data Officers, and leaders chart their courses to data-driven futures, with special emphasis on quality and analytics. To learn more, check out www.dataqualitysolutions.com
SAP: Most technology and business leaders are aware of the hype surrounding digital transformation. They know the potential seems enormous but also know that the failure rate of digital transformation programs is very high. Recently, Tom Redman published an important and interesting article titled, “The Data, Management, and Trust Issues That Slow Digital Transformation” in which he described the factors that contribute to these failures.
We caught up with Tom to follow up, with an eye to understanding what leaders and companies should do about this. Tom, first question. Your article went into depth on several really important topics. Can you sum it up for our readers more simply?
Tom Redman (TCR): I put the issues raised in the “tough, but surmountable” category. By that I mean that companies could resolve them if they really wanted to. But most have not, which is why the failure rate is so high. So, there is something deeper going on. While all companies are different, I see three inter-related factors: Shared vision, urgency, and courage.
Let’s start with courage. Let’s face it. Any change is hard. Without sufficient courage, up and down the organization chart, it just isn’t going to happen.
Next, shared vision. People are right to ask, “I get that why you’re excited about this technology, but how is it going to affect me, my job or my customers?” Unless you can get large numbers of people to buy in to your answer, it just isn’t going to happen.
Finally, urgency. People are busy. Unless there is something—a dogged competitor nipping at your heels, the promise of big raises, an existential threat—the effort won’t get the attention it requires. Without real urgency, change just isn’t going to happen.
So ultimately, digital transformation is about people: People who have the courage to try something new, the patience to build buy-in, and the business acumen to get the effort on people’s top-three list.
SAP: How do you really measure the value of your digital transformation?
TCR: There is an interesting paradox here. Peter Drucker famously said, “You can’t manage what you don’t measure.” It pushes one to want to put a dollar figure on digital transformation.
In contrast, W. Edwards Deming observed, “The most important things are unmeasured and unmeasurable.” You can’t put a price tag on love, commitment to the organization, and lots of other things that really matter.
Now I personally have the utmost respect for both Deming and Drucker. Thus, in evaluating digital transformation, it is important to apply the two in equal measure. Let me give one example. I was part of a team that transformed a financial assurance process at a large telecom. The measured benefits, which came from a combination of better data and staff reductions, were over $100M per year. Still, the head of the Division that benefited observed, “Don’t get me wrong—I really do appreciate the $100M. But this means I can manage the business and that is worth way more.”
I want to build on this theme because it is so important. We should look at technology through two lenses. First, “doing more with less.” Scaling up and driving unit costs down. Probably everyone’s all-time favorite information technology is the printing press: Number of books up, costs per book down. Same with the loom and automated switching of telephone calls. Capacity up, unit cost down. I see the same pattern with all successful technologies. Think spreadsheets and back office systems. So far, this pattern is holding up with artificial intelligence and blockchain, though it may be too early to know definitively. Companies should always evaluate new technologies, and track progress, through this do more with less lens.
The second lens is “transformation.” It’s important because merely automating something is not. in and of itself, transformational. Automating a customer help desk is a good example. Scale goes up and unit cost goes down, but most would agree that this is not transformational.
Transformation is about people—how they think, feel, do their work and interact with one another. The printing press and the loom changed all of these things. When transformation is successful, the excitement is palpable. You hear things like, “We’ve seen in. We get it. We’re doing it. And let me tell you this—we’re not going back.” I don’t know how to measure these things.
SAP: What are the key priorities? What should an organization focus on before the transformation project starts?
TCR: I have a little check sheet I use in my role as an advisor that will help answer that question.
The basic idea is this: Use the chart to evaluate whether the components you need for your transformation to succeed are in place. Then reinforce the weak ones.
Let’s dive into each component more deeply. We’ve already talked about “clear, shared vision.” I run into a lot of people who have a vision, but few share it. These people have to sell their vision and get more people to buy in.
We’ve also talked about “sense of urgency.” Here the secret is to focus less on the technology and more on the business benefits. Most transformations start with a big business problem that requires more than incremental steps. One company needed to expand its customer base more rapidly; another to distinguish itself from its competitors; another to better connect its supply chain. The important lesson here: If you want to promote your technology, find a big business problem it will help solve.
The next component is capacity to change, and it includes things like courage, talent, and leadership. We’ve already talked about courage, but it is worth repeating–unless there is a core of really committed people who will take on sacred cows and persist in the face of adversity, your chances of success are low. Similarly, unless you have some really senior people on board, not just funding the effort, but providing air cover and using their political capital. To paraphrase my colleague Maria Villa, “You can’t have too many friends in high places.” As I said before, transformation is about people and those leading transformation efforts must work continuously to get as many people as possible on board.
Similarly, talent. I explored this deeply in the earlier article. If you don’t already have it, recruit A-level data, technology, process and change management talent to the effort.
Finally, actionable first steps. This is the easiest one to evaluate and solve. Essentially it comes down to “do people know what they are supposed to do when they start work?”
Now one more very important point. It is easy to underestimate how difficult transformation is. Some who’ve been through it describe it as “downright scary!” No surprise people are reluctant to buy in. The good news is you don’t need everyone, or even a majority of people saying, “Yep, I’m sold. But you do need a critical mass and it really helps if the team, department, or division leader is on board. As Margaret Mead observed, “Never doubt the ability of a few committed individuals to change the world. Indeed, it is the only thing that ever has!” (link, reference)
SAP: Is there such a thing as lean, or agile, digital transformation.
TCR: There is an old saying that goes, “all change is bottom up. All change is top-down.” It reflects the practical reality that most ideas come into the company through the bottom or middle. So, what do you do if you’re an individual contributor or middle manager with tremendous passion for a new technology or idea? You start where you can! If you can get the head of the company on-board, great. More likely, you’ll have to build support within your team and then complete the small/lean/agile transformation, you noted.
Then, after you succeed at one level, you start to work your way up. You’re not just a “person with a lot of good ideas,” but one with a success story to back it up! If you persist and get lucky, senior leaders will buy in and the top-down part of the quote will kick in.
From my perspective, the people who have the courage, persistence, and smarts to start and complete a transformation, at any level, are the most important people in any organization. So important that I assign them the name Data Provocateurs (link, reference).
SAP: What should the senior business leader, who doesn’t know much about technology, do?
TCR: Yep, that is a good question.
Personally, I think they should smell opportunity! There have never been greater opportunities, or needs, for senior leaders to step in, make a real mark, and leave a long-term legacy.
Here’s why. Bear in mind that transformation teams don’t need senior leaders to understand technology—what they need is political clout—help in attracting support, keeping dissenters on the sidelines, assembling the right team, and making connections to the right people.
Simply clarifying your position can be a real game-changer. I distinctly recall one especially tough transformation project early in my career. This one had attracted more than the usual amount of opposition. Then one day, I received a call from a very senior executive. He told me that he had been watching the project closely and thought it important for the company. He further told me that he didn’t understand any of the details, nor did he care to. The reason for the call was that it was well known that he “operated a fleet of B-2 bombers. If you encounter any serious resistance, let me know.” He paused for a few seconds, then added, “And Tom, if you’re smart, you’ll let it slip that we had this conversation.” His message was clear—he hoped not to have to get involved, but if needed, he would take care of those slowing us down.
To reiterate, leaders don’t have to understand technology to leave a real mark. They know the business, the people who can lead, and have political clout. There are plenty of ways to tip the scales!
SAP: What’s the next big thing after digital transformation?
TCR: That’s an interesting question and I’m not sure my crystal ball is better than anyone else’s. Particularly since digital transformation isn’t going all that well. I’m going to answer a slightly different question, “What do you hope companies and government agencies will do next?”
The simple answer is, “get the basics right” and I specifically do not mean “back to basics!” In the earlier article, I called out some pretty fundamental issues—data quality is low, technical debt is out-of-control, business people don’t trust their technology departments, and, as you know, employees aren’t all that engaged. These things compromise digital transformation, but they also clobber companies every day.
Frankly, none of this should surprise anyone. These issues stem directly from the way companies are run, the people they hire, and the structures (silos) they out in place. All were designed to support industrialization and proved themselves remarkably effective during that time. But they don’t work as well today when data and digital technologies are ascendant. The new basics include:
- Putting people front and center,
- Sorting out the relationships between business and tech teams, especially for data, and
- Dealing with siloes.
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