IT and Digital Failures – the Time for Study is Over – it’s Way Past Time for Action!

A recent article in diginomica, “Senate agrees to launch inquiry into Australia’s digital government failures” caught my eye. My immediate reaction was “Here we go again”, quickly followed by a somewhat more lyrical “When will they ever learn?”
The challenges of IT projects have been analyzed extensively over many decades. Most of us are familiar with The Standish Chaos Survey, the 2015 results of which reported successful projects constantly representing only ~30% of the 50,000 surveyed projects (where success is defined as on time, on budget and with a satisfactory result).

A 2012 Mckinsey article, based on research conducted on more than 5,400 IT projects by Mckinsey and the University of Oxford, found that half of large IT projects (costing >$ 15 million) massively blew their budgets. On average, large IT projects ran 45% over budget and 7% over time, while delivering 56% less value than predicted. The projects in total had a cost overrun of $66 billion, more than the GDP of Luxembourg. The impact of these failures is more than financial. In the case of healthcare, for example, the impact includes significant avoidable loss of life, pain and suffering.

More anecdotally, The International Project Leadership Academy Catalogue of Catastrophe records quite a few troubled projects from around the world, many, but not all of them IT projects. The list includes the UK’s NHS National Program for IT in Health, the original budget for which was $4.6 billion, which had risen to $24 billion when it was cancelled in 2010. At the time, and possibly still now, it was the world’s largest civil IT project.

Challenges to success – being on time, on budget, and achieving the expected value, are common across private and public sectors and across all jurisdictions. If one were to take all the studies, audit reports, and other post-mortem review of so-called “IT projects” or, more recently, “digital” initiatives, you could fill a medium-sized – possibly larger – library. The good news is that you would only have to read one or two of them to realize that they all came to basically the same conclusions, and made basically the same recommendations. It’s great business for consultants, as they can usually just dust off and tailor a previous report – a great but expensive example of re-use. Over the same time, research papers and articles beyond count have been written on this topic, and frameworks, methodologies, tools and techniques have been produced (almost) ad nauseam. Yet, despite this, very little has changed, other than that the impact of these failures, as technology becomes increasingly embedded in everything organizations do, is both more severe and more visible, not the least so in the public sector.

The underlying causes of both earlier “IT project” failures, and those of more recent “digital” initiatives are basically the same. They include:
1. A continued, often blind focus on the technology itself, rather than the change – increasingly significant and complex organizational change that technology both shapes and enables, and which is required if organizations are to come anywhere near realizing the potential value from their digital investments;
2. The unwillingness of business leaders to get engaged in, and take ownership of this change – preferring to abdicate their accountability to the IT function (I should add that I have also seen cases where IT leaders know this should be owned by the business leadership team, but do not believe that they have the competence to do so);
3. Failure to inclusively and continually involve the stakeholders affected by the change, without whose understanding and “buy in” failure is pretty much a foregone conclusion;
4. A lack of rigour at the front-end of an investment decision, including, what is almost universally a totally ineffective business case process, resulting in lack of clarity around the expected outcomes, the full scope of effort required, the assumptions being made, the risks involved, and how progress and success will be measured;
5. Not actively managing for value; and
6. Not managing the journey beyond the initial “project” completion.

A much over-used definition of insanity, commonly yet apparently inaccurately attributed to Albert Einstein, is “doing the same thing over and over again and expecting a different result.” This is certainly a good description of the where we are today. It should have been obvious to anyone reading any of the previously mentioned reports and studies that the issue of IT or digital failure needs to be re-framed from a technology delivery problem to a business problem of managing increasingly significant and complex organizational change. A business problem that has had a global cost estimated by Michael Krigsman, a respected industry analyst, to be in the order of $US3 trillion/year. And that cost doesn’t include opportunity cost – the non-realization of expected value.

So, why is it that business leaders – in both the private and public sector, have not stepped up to the plate? Despite the term “digital” now being much more commonly used – or abused –  in place of “IT”, digital is still largely equated with, and thought of as, a technology implementation issue. We certainly don’t need any more studies! As a client of mine once said, the less will we have to solve a problem, the more we study it. We need leaders to finally wake up and understand that this is not a technology implementation problem, but a problem around understanding, accepting accountability for, and managing the business change required to create and sustain business value from leveraging digital. We need these leaders to move beyond eternal studies to action. I discussed this in an earlier post, “Digital Leadership – Much More Than IT Leadership”. What follows builds on parts of that post.

In this new digital era, technology itself, how technology is delivered, how it is used, and by whom are changing at an ever-increasing rate. This is blurring the roles and responsibilities of IT and other business functions, and giving rise to a fundamental rethinking of how IT, and its delivery and use is governed and managed, and the capabilities that are required to ensure and assure that the use of technology contributes to creating and sustaining business value. The role of the CIO is being questioned ad nauseam, particularly as it relates to the CMO, and a new position, the CDO, is appearing. And, of course, let’s not forget the CTO. However, the answer is not as simple as renaming the CIO position, getting a new CIO, or appointing a few new CXOs (or now, due to alphabetic limitations, CXXOs).

I have, over many decades, used the simple formula below to describe reason for the current dismal state of affairs:

OO + NT = COO

The formula represents that simply applying new technology (NT) to an old organization (OO) results in a Complex Old Organization (COO). Gavin Slater, the new head of the Australian Government’s Digital Transformation Agency (DTA), used a variation of this formula in a recent address to the Australian Information Industry Association, in which he replaced COO with EOO – expensive old organization.

Digitization cuts across organizational silos, and across all levels of organizations. Realizing value from digital requires more than putting lipstick on the old industrial age pig, with its hierarchical, command and control approach to governance, leadership and management. It requires continually rethinking, reimagining and reinventing every aspect of our organizations. Digital transformation, or more accurately the on-going and ever-evolving digital journey towards a digital ecosystem will require digital literacy and collaboration across and beyond the C-suite to ensure that their organization has, as EY’s David Nichols said in a May 2014 CIO Insight interview, “an integrated and holistic plan to really leverage digital”. This includes questioning their very purpose, how they are organized, the very nature of the work they do, who does it, and how it’s done. It requires challenging established cultures and long-held beliefs. The digital economy both enables and requires a different view of leadership. As Sally Helgesen said in a May, 2014 article, “Leadership’ isn’t Just for Leaders anymore”, leadership no longer, or should no longer equate with positional power and has, or should become a behaviour that is broadly distributed, recognize and rewarded.

Organizations must tap into the collective knowledge of all their people…~70% of whom feel no engagement with their organizations today. As Julian Stodd said in a June, 2017 blog, “The Age of Engagement”:

“The mechanisms and mindset of engagement in many organisations lags far behind the lived reality of the Social Age: Organisations exist in a realm of expertise, domain specific input, hierarchical power, at a time when communities are rising, co-creation is maturing, and dynamism is key. The solution will not be adaptation within an existing mindset, but rather a paradigm shift to a new space: the Age of Engagement.”

Peter Staal extends this thinking in an August, 2017 article, “Organizations of the future operate as communities”, in which he says:

“Meeting the demands of the digital age will require a new way of working. Take for instance the decision-making process. Organizations no longer have the time traditionally taken up by this process through a decision tree. The future belongs to organizations which are made up of multiple autonomously operating communities forming part of the larger whole (so-called pods).”

This is not a new concept. It was original posited in the early 20th century by Oswald von Neil-Breuning with his law of subsidiarity – an organizing principle that matters ought to be handled by the smallest, lowest or least centralized competent authority. This means locating accountability and decision-making at the most appropriate level, while supporting decisions with broader and more knowledgeable input.

We could have adopted such a concept long before now, indeed, some organizations have done so. For organizations to survive and thrive in the digital economy, this is no longer an option! We certainly now have the technology available today to support such a concept. However, I’m not sure we will see this widely accepted  any time soon – likely not in my lifetime. As Steve Vamos said in a 2012 Australian Review article:

“The challenge ahead is to unwind more than a century of industrial-age mindsets at work which are controlling, mistake-averse and “know it all” and evolve them into mindsets that are enabling, learning and willing to try new things and fail.”

Laurence J. Peter, author of The Peter Principle, echoed those sentiments when he said, “Bureaucracy defends the status quo long past the time when the quo has lost its status.” The reasons for this are well laid out by Ted Bauer in an August, 2017 article, “Bureaucratic management ain’t going anywhere”, as summarized in the figure below.

As an eternal optimist, I hope that he’s wrong, but as a realist, having pushed similar ideas for many decades, I think it will take some time before we see the extinction of the organizational dinosaurs. This will certainly be the case if we stand on the sidelines and wait for it to happen. As a former colleague, Don Tapscott,  has said for decades “Leadership can come from anywhere”. We must all take a leadership role in making it happen.

The Dark Side of Digital

 Four years ago, I wrote reflecting on my 50 years in IT, and the pursuit of value from the use of IT. I described the changes that had occurred over that time since I started my working life as a computer operator on an IBM 1401, which had a (not really published as such) processing speed close to 10 million times slower than today’s (2013) microprocessors, 8k of storage (later upgraded, with an additional unit, to 16k), no solid state/hard drive, displays or communication capability, and no operating system (that was me!). Weighing in at around 4 tons, it needed a fully air conditioned room, with a raised floor, approximately twice the size of my living room.

I described how my world in 2013 compared with that time. I had powerful technology in my small home office, wirelessly connected within my house, and to the world beyond through the internet. I had access to an ever-growing body of knowledge that could answer almost any question I had, and which enabled me to manage my banking, pay bills, check medical lab test results, organize travel, shop, read books, listen to music, watch videos, play games, organize, edit and enhance photographs and videos, and a myriad of other tasks.

I went on to describe how, beyond my individual world, at the enterprise level, the technology model is changing from computing – the technology in and of itself, to consumption – how individuals and organizations use technology in ways that can create value for them and, in the case of organizations, their stakeholders. I discussed the extent to which technology, and how it was being used, was continuing to change, at an ever-increasing rate, including:

  • increasing adoption of the Cloud;
  • Software (and just about anything else) as a Service; the explosion of “Big Data”, and, along with it, analytics and data visualization;
  • mobility, consumerization and BYOD which fundamentally changes how, where and when we interact with technology and access information;
  • the ”internet of things” (IOT) bringing with it unprecedented challenges in security, data privacy, safety, governance and trust; and
  • robotics and algorithmic computing which have considerable potential to change the nature of work.

I closed by talking about what hadn’t changed, and what needed to change. Putting my value lens on, I lamented that, then, 15 years since The Information Paradox, in which I described the challenge of getting value from so called “IT projects”, was first published, the track record remained dismal, and realizing the value promised by IT remained elusive. I attributed this situation to several factors, the primary ones being:

  • a continued, often blind focus on the technology itself, rather than the change – increasingly significant and complex change – that technology both shapes and enables;
  • the unwillingness of business leaders to get engaged in, and take ownership of this change – electing to abdicate their accountability to the IT function; and
  • failure to inclusively and continually involve the stakeholders affected by the change, without whose understanding and “buy in” failure is pretty much a foregone

 

What a difference four years makes

OK – that’s (probably more than) enough of a recap – I’m now going to fast forward some 4 years (a lifetime in the digital world) to today, 2017. While the challenge of creating and sustaining value from our use of technology described above is still real, our failure to address it, along with an almost total failure of leadership – technical, business and government leadership, have brought us into an increasingly dark place – one that I think few of us saw coming, certainly not unfolding as it is. I call this place “the Dark Side of Digital”. I alluded to it in 2013 in discussing IOT, robotics and algorithmic computing, when I said that they brought with them “unprecedented challenges in security, data privacy, safety, governance and trust…(and) have considerable potential to change the nature of work” – I would now revise and add to the latter saying “…have considerable potential to fundamentally impact the future of work and, indeed, the future of society”.

The elements of this dark side fall into three main categories:

  1. Cybersecurity: This is the most traditional category – one that, albeit not so- named, has been with us since the advent of computers, when cards, tapes or
    other media could be lost/stolen. However, as our connectedness continues to increase, so does our susceptibility to cybersecurity attacks, with a growing number of such threats arising out of machine-to-machine learning and the Internet of Things. There are nearly 7 billion connected devices being used this year, but this is expected to jump to a whopping 20 billion over the next four years. Most cybercriminals are now operating with increasing levels of skill and professionalism. As a result, the adverse effects of cyber-breaches, -hacks, or –attacks, including the use of ransomware and phishing continue to escalate resulting in increased physical loss and theft of media, eroding competitive advantage and shareholder value, and severely damaging reputations. More severe attacks have the capacity to disrupt regular business operations and governmental functions severely. Such incidents may result in the temporary outage of critical services and the compromise of sensitive data. In the case of nation-state supported actors, their attacks have the potential to cause complete paralysis and/or destruction of critical systems and infrastructure. Such attacks have the capacity to result in significant destruction of property and/or loss of life. Under such circumstances, regular business operations and/or government functions cease and data confidentiality, integrity, and availability are completely compromised for extended
  1. The Future of Work: The fear that technology will eliminate jobs has been with us pretty much since the advent of the first commercial computers, but, until the last few years, the argument that new jobs will appear to replace the old has largely held true. Now however, the revolutionary pace and breadth of technological change is such that we are experiencing a situation in which, as recently described by the Governor of the Bank of England, Mark Carney.

“Alongside great benefits, every technological revolution mercilessly destroys jobs & livelihoods well before new ones emerge.”

Early AI and IOT systems are already augmenting human work and changing management structures across labor sectors. We are already seeing, and can expect to continue to see uneven distribution of the of AI impact across sectors, job types, wage levels, skills and education. It’s very hard to predict which jobs will be most affected by AI-driven automation.

While, traditionally, low-skill jobs have been at the greatest risk of replacement from automation, as Stephen Hawking says, the “rise of artificial intelligence is likely to extend job destruction deep into the middle classes, with only the most caring, creative or supervisory roles remaining.” He goes on to say that “we are at the most dangerous moment in the development of humanity”.

  1. The Future of Society: On the societal front, a paradigm shift is underway in how we work and communicate, as well as how we express, inform and
    entertain ourselves. Equally, governments and institutions are being reshaped, as are systems of education, healthcare and transportation, among many others.

AI and automated decision making systems are often deployed as a background process, unknown and unseen by those they impact. Even when they are seen, they may provide assessments and guide decisions without being fully understood or evaluated. Visible or not, as AI systems proliferate through social domains, there are few established means to validate AI systems’ fairness, and to contest and rectify wrong or harmful decisions or impacts. Professional codes of ethics, where they exist, don’t currently reflect the social and economic complexities of deploying AI systems within critical social domains like healthcare, law enforcement, criminal justice, and labor. Similarly, technical curricula at major universities, while recently emphasizing ethics, rarely integrate these principles into their core training at a practical level[1]. As Mike Ananny and Taylor Owen said in a recent Globe and Mail article[2], there is “a troubling disconnect between the rapid development of AI technologies and the static nature of our governance institutions. It is difficult to imagine how governments will regulate the social implications of an AI that adapts in real time, based on flows of data that technologists don’t foresee or understand. It is equally challenging for governments to design safeguards that anticipate human-machine action, and that can trace consequences across multiple systems, data-sets, and institutions.” This disconnect is further adding to the erosion of trust in our institutions that we have been seeing over several decades.

Adding to the threats to society is the proliferation of internet and social media. In a world where we can all be publishers, we see shades of Orwell’s 1984 in a post-truth word of alternate facts, and fake news. Rather than becoming a more open and collaborative society, we see society fracturing into siloed echo- chambers of alternate-reality, built on confirmation bias, and fed by self-serving populist leaders, posing dangerously simplistic solutions – sometimes in tweets of 140 characters or less – to poorly understood and increasingly complex issues.

 

So, what do we need to do?

The complexity of these challenges, and their interconnectedness across sectors make it a critical responsibility of all stakeholders of global society – governments, business, academia, and civil society – to work together to better understand the emerging trends.

If business leaders expect to harness the latest technology advances to the benefit of their customers, business and society at large, there are two primary challenges they need to address now.

  1. As companies amass vast amounts of personal data used to develop products and services, they must own the responsibility for the ethical use and security of that information. Ethical and security guidelines for how data is collected, controlled and ultimately used are of paramount concern to customers, and rightfully so. To gain the trust of customers, companies must be transparent and prove they employ strong ethical guidelines and security standards.
  1. It is incumbent on organizations to act responsibly toward their employees and make it possible for them to succeed in the rapidly changing work environment. That means clearly defining the company vision and strategies, enabling shifting roles through specialized training, and redefining processes to empower people to innovate and implement new ways of doing business to successfully navigate this new and ever-changing

As a society, if we are to avoid sleepwalking into a dystopian future, as described in 2013 by internet pioneer Nico Mele as one “inconsistent with the hard-won democratic values on which our modern society is based… a chaotic, uncontrollable, and potentially even catastrophic future”, we must recognize that technology is not destiny – institutions and policies are critical. Policy plays a large role in shaping the direction and effects of technological change. “Given appropriate attention and the right policy and institutional responses, advanced automation can be compatible with productivity, high levels of employment, and more broadly shared prosperity.”

The challenge is eloquently described by WEF founder and executive chairman, Dr. Klaus Schwab.

“Shaping the fourth industrial revolution to ensure that it is empowering and human- centred, rather than divisive and dehumanizing, is not a task for any single stakeholder or sector or for any one region, industry or culture. The fundamental and global nature of this revolution means it will affect and be influenced by all countries, economies, sectors and people. It is, therefore, critical that we invest attention and energy in multi- stakeholder cooperation across academic, social, political, national and industry boundaries. These interactions and collaborations are needed to create positive, common and hope- filled narratives, enabling individuals and groups from all parts of the world to participate in, and benefit from, the ongoing transformations.”

 

A call to action!

We need, as Dr. Schwab goes on to say, to “…take dramatic technological change as an invitation to reflect about who we are and how we see the world. The more we think about how to harness the technology revolution, the more we will examine ourselves and the underlying social models that these technologies embody and enable, and the more we will have an opportunity to shape the revolution in a manner that improves the state of the world.”[3]

We cannot wait for “them” to do this – as individuals, we can and must all play a leadership role as advocates in our organizations and communities to increase the awareness and understanding of the changes ahead, and to shape those changes such that, as Dr. Schwab says, they are empowering and human-centred, rather than divisive and dehumanizing.

[1] Source: The AI Now Report, The Social and Economic Implications of Artificial Intelligence Technologies in the Near-Term, A summary of the AI Now public symposium, hosted by the White House and New York University’s Information Law Institute, July 7th, 20

[2] Ethics and governance are getting lost in the AI frenzy, The Globe and Mail, March 20, 2017

[3] Source: The Fourth Industrial Revolution: Risks and Benefits, Wall Street Journal, Feb 24, 2017

Bridging the Gap between Value Selling and Value Realization

All enterprises exist to deliver value to their stakeholders. Over the last few decades, the way that we use technology – and who uses it, has changed dramatically. Yet one thing that has not changed is the on-going questioning of the value received from our investments involving technology. As we move into an increasingly digital universe, with technology becoming embedded in everything we do, there has never been a more critical time to address this question

As I have discussed in previous posts – “Partnering for value”, and “The IT Value standoff”, technology per se is just a cost – it is how the business uses technology, and manages the change that technology both shapes and enables, that determines whether the technology contributes to business value.

What has been lost in all this is the understanding of, and accountability for managing the increasing breadth and depth of business change that technology both shapes and enables, and which is required if value is to be created and sustained! We need to change the conversation – to change it from one largely about the cost of delivery of technology to one focused on creating and sustaining value from business change.

Business value will only be realized from our increasingly significant and complex investments in IT-enabled change when complementary changes are made in the business – including changes to the governance, business and operating models, business processes and practices, people’s work, and the skills and competencies required to successfully get the work done, reward and incentive systems, organizational structures, physical facilities etc. And, the most difficult, changes to organizational culture, and group and individual behaviour.

The value journey starts with the sales cycle, and it is here where the seeds of success or failure are first sown. Did you know that:

  • Over 95% of B2B buyers demand proof that the vendor will deliver value, demanding financial justification / ROI quantification prior to purchase approval (IDC)
  • Yet, only 7% of buyers say the vendors’  content and sales reps are value-focused (The Economist).

But, buyers’ concerns don’t end when the sale is made:

  • Recent research from IBM (IBM Strategy & Change, Survey of Fortune 1000 CIO’s) reported that organizations said that 40% of total IT spending brought no return to their organization
  • The Standish Group has reported on the success of “IT projects” annually since 1994, with success factors being: on time, on budge; and delivering the expected features. The 2015 report redefined success as being: on time; on budget; and with a satisfactory result, where satisfactory includes:on-target (% requirements);  satisfied (very high to very low); value (very high to very low); and alignment with strategic corporate goal (precise to distant). They then summarized the outcomes of projects over the last five years using the new definition of success factors, as shown in the table below.

Standish2015

The number of successful projects is relatively unchanged over the 5 years at a dismal 27 – 29%. In fact, in every year since the  report was first published in 1994, the percentage has been close to that range. It is little wonder, given these numbers, that we are seeing an increased concern around value.

As enterprises move into the digital age, if we continue to do things the way we have been, the challenge will only increase:

  • McKinsey, in a recent report (The digital tipping point. McKinsey Global survey results 2014) reported that most organizations have only a basic grasp on the value that digital can create, need to understand better how to match priorities and investments with the areas of highest value, and must work to ensure that their structures and business processes are set up to take full advantage of the opportunities that digital efforts offer.

This is both a challenge and an opportunity for sales professionals. Building  awareness, understanding, and commitment to make the necessary changes should be a joint responsibility of vendors (as well as consultants) and their enterprise clients. This has been the “elephant in the room” for the last 2 – 3 decades, and we will come nowhere near to realizing full business value of these enterprise investments in IT-enabled change is we don’t surface and deal with it.

I have recently been working with a group of sales professionals and consultants in setting up the Value Selling and Realization Council (VSR Council). The proposed charter of the Council is to:

Maximize value from investments in IT-enabled change by establishing, promoting and adopting value management methods, standards, practices, tools, and training that enable B2B solution providers and enterprise corporate executives to collaborate in developing and executing a “roadmap to value” approach, in order to optimize the business outcomes from such investments.

This is an ambitious agenda – one which, if it is to be successful, and not fall into the old “don’t confuse sell with install” mindset, has to address the “elephant in the room” by adding the missing piece between selling value – getting the client to understand the potential value of the proposed investment, and realizing value – the client actually realizing or even exceeding the expected value. This missing piece is enabling value – building the awareness, understanding, and commitment to make the complementary business  changes that are required for value to be realized.

The figure below provides a model of Value Management, and illustrates that a value mindset and supporting structures, processes, roles, responsibilities, and metrics must be established as part of enterprise governance, and that value enablement is a very significant piece of the Value life-cycle – the bridge between selling value and actually realizing it.

Slide3Unfortunately, it is the piece that has been largely ignored, or paid lip service to up till now. This is where the VSR Council has the opportunity to make a real difference, by building a pro-active community of value-focused individuals, including sales professionals, industry analysts, value consultants, and client enterprise professionals and leaders.

The Council is only a few months old, but already boasts a long list of senior level managers from companies such as IDC, SAP, Oracle, Workday, Adobe, Microsoft, Alexander Group, Unisys, Sirius Decisions, Finlistics, Alinean, DecisionLink, IBM, Accenture, JDA, NetApp, EY, KPMG, VMware, Effisoft, etc. Take a few minutes and watch a short video from a few of the founding members (I’m the oldest looking one!).

I attended a first meeting of the Council in Dallas in October. I have to say that I went with some skepticism, not knowing how many people might show up, what their experience might be, how open as competitors they would be with each other, or what their views of value management were – particularly value enablement and realization. By the end of the day, my skepticism had disappeared. We were expecting 15 attendees, and 22 showed up, there was a breadth and depth of understanding of the value space, and a very open discussion, displaying both a broad understanding of the challenges of value management, and a passion to work collaboratively to address them.

As a non-profit, the VSR Council depends upon the time contributions of its members. If  you are  interested in furthering the work of the Council, and “connecting the dots” to value, individual Community membership is free – just click here to register to become a member and join the community. To connect with the community, you can also join the VSR Linkedin Group here. Also, please consider becoming an active member by volunteering yourself or someone working with you on one of the working committees. Help the Council build something great and connect those dots!

A great way to kickstart your involvement in the community is by attending the upcoming VSR Summit, a networking and educational event scheduled for February 29th thru March 1st, 2016 at the Marriott Courtyard DFW North in Grapevine, Texas.  There is a cost to attend and capacity is limited so, if you or anyone else you may know are interested, you should register soon.

We are today at a “tipping point” where, if we are to come anywhere near realizing the full potential of a digital world, we need to connect the dots from ideas to the realization of value. We will not do this with traditional siloed and fragmented disciplines and approaches. The VSR council provides the opportunity to create a professional value management community, connecting those dots, and providing leadership in enabling organizations to create and sustain value from technology-enabled change. I hope that I have the opportunity in the months and years to come to meet and work with many of you in this community to achieve this goal.

A New Age of Digital Exploration

The first question you may have here is what do I mean by “digital exploration”? Is exploration being disrupted by digital, or does digital require exploration? The answer is yes to both. Although the focus of this piece is on the latter, my thinking about it was triggered by the first. In 2013, my son, Jeremy, was named one of National Geographic’s “Emerging Explorers of The Year”. This was not for grinding trudges dragging dugout canoes through tropical areas, although that was to follow, but for his work in data visualization – translating unimaginable blurs of information into something we can see, understand, and feel—data made human through visualizations that blend research, art, software, science, and design.

img_2788aAs a result of this, and meeting another National Geographic explorer, Steve Boyes, Jeremy became one of the four leaders of the Okavango 2014 expedition (that’s him on the left) – the first ever live-data expedition  across Botswana’s amazing Okavango Delta. Like the expeditions of old, they were pushing into the unknown, in search of measurements but, unlike previous expeditions, they used a set of open-source tools to develop a system that puts every piece of data collected onto the web, in near real-time, for anyone in the world to use and share. This data included wildlife sightings, water quality measurements, and the four leaders’ exact GPS location, heart rate, and energy consumption.

As I reflected on this expedition, and how it was positively disrupting exploration, I went back to thinking about how our use of technology has evolved and continues to evolve. I started to question how I have been describing this evolution. I have described, as depicted in the image below, three stages of evolution: the automation stage, which I characterized as the appliance era; the information stage, characterized as the rewiring era; and the transformation stage, characterized as the rebuilding era.

Slide1

I have always felt uncomfortable with the term transformation – a much over-used and abused word. When the initial version of this image appeared in The Information Paradox, almost two decades ago, it was being used to describe the implementation of ERP, CRM, SCM etc. While these were certainly complicated endeavours, and often required significant organizational change (a requirement usually recognized too late and poorly managed), they were primarily about integrating information, and making it more accurate, accessible and timely. There were  proven practices available to do this, although, they were all too often not adopted, or adopted too late. They did not essentially change what organizations did – they just did it differently and, hopefully, better. It certainly involved major organizational change, but was hardly transformational.

Since that time, there has certainly been real transformation in a number of industries, including entertainment, media, communications, retail and consumer goods, financial services, automotive, as well as around the edges of others, but we are now seeing this happening, or at least the potential for it to happen, across all industries. Indeed, across all organizations, public or private, large or small. This is taking us into unknown territory – moving beyond a complicated world to a complex one. One in which :

  • Technology itself, how technology is delivered, how it used, and by whom are changing at an ever-increasing pace;
  • Everything and everyone will be connected, anywhere, any time;
  • Technology is increasingly embedded in everything we do, and in ourselves;
  • Everything is becoming “smart’ – phones, cars, houses, buildings, cities, etc.;
  • Robots, cognitive computing and machine learning play an increasing role;
  • We are becoming increasingly embedded in everything technology does;
  • Data is available about everything;
  • Analytics are available to anyone; and
  • Everything is available as a service.

This increasingly complex world is moving us to  the next stage of evolution in our use of IT – exploration, as illustrated in the images below.

Slide1This first figure adds the exploration stage to my original three. This is a somewhat different and more fluid stage, as what emerges from the exploration stage could become a combination of automation, information, and transformation type uses of IT. In the next image I take a degree of licence in  integrating the four stages with the concepts of David Snowden’s Cynefin Framework – an analytical, decision-making framework based on understanding the nature of the systems you are working with – simple/ordered, complicated, complex or chaotic, and selecting the appropriate approach and practices to manage them.

Slide2The first three of the Cynefin system types: simple/ordered; complicated; and complex are  mapped to the four stages. Automation, and some basic examples of the information stage map to simple/ordered. Some of the more integrated information and simple transformation map to complicated. Broader transformation and exploration map to complex. The mapping again draws on David Snowden’s work in positing that best practices are appropriate for the simple/ordered systems, proven practices can be selected based on analysis and/or expert opinion for complicated systems, and new/novel practices emerge during the exploratory era.

Slide3While, as proven and best practices emerge, the nature of systems may change, i.e. they may become a combination of simple/ordered, complicated and complex, this last figure shows that when we attempt to apply best practices to a complex system, the result is the fourth Cynefin system type – chaotic. In today’s complex digital world, while proven practices are emerging, most of what we are doing is still very much exploratory in nature.

 

 
As organizations move into the digital world, they will still have simple/ordered systems, although most of these may be XaaS in the Cloud, and complicated systems, some/all of which may also be in the Cloud, but an increasing amount of what they do will be in the complex space. In this space, it will not just be just practices around delivery of products that will be emerging, but also new models of how work is organized, managed, lead and governed. It is, or should be becoming clear that our traditional industrial-age, top-down hierarchical control-oriented approach to leadership and management is simply not cutting it, and certainly won’t do so in a digital world. The engagement level of employees with their organizations is abysmal – ranging between ~13-30% (and its not much better for managers). This is sometimes attributed to generational differences, particularly the rise of the “millennials”, and is certainly not helped by the rising disparity between C-Suite pay and that of the median worker. However, I don’t believe that the aspirations of millennials are any different than mine were when I started work over 50 years ago.

What has changed is the global and social context within which we live and work. We are more globally aware and socially connected, and have 24/7 access to pretty much unlimited knowledge, information and expertise. We are exposed every day to how other organizations are already embracing technologies, including social, mobile and analytics, enabling greater engagement and two-way communication with and between employees, and orchestrating self-managing teams who can work collaboratively in a much more agile and responsive way with limited but relevant and appropriate oversight. Organizations who are “democratizing” their approach to leadership and governance – letting their people use their brains again.

We know what the future of work could be, but don’t see that anywhere close to being universally realized. The challenge ahead is to break out of the straightjacket of more than a century of hierarchical, siloed industrial age mindsets at work which are controlling, mistake-averse and “know it all”. To evolve them into mindsets that are enabling, learning and willing to try new things and fail. To move to a more agile and inclusive approach to governance, leadership and management. A value-focused, data and analytics driven, agile, sense and respond approach that transcends functional and organisational boundaries, and engages employees, customers and other key stakeholders – locating accountability and decision-making at the most appropriate level (based on the principle of subsidiarity), while supporting decisions with broader and more knowledgeable input.

All this is will require a fundamental rethinking of how digital businesses are governed and managed, and the capabilities that are required to ensure and assure that the use of technology contributes to creating and sustaining business and societal value in the digital world Replacing current top-down, hierarchical and siloed processes with leadership across and beyond the C-suite with leadership capabilities recognized, nurtured, and empowered throughout organizations. It will all be part of a new era of digital exploration and transformation.

Does this mean that we have to throw out everything that has come before? No – but we do have to question everything? We do have to look at everything with the understanding of “what could be”, not “what has been”. We have to be careful here not to “throw the baby out with the bathwater” – this must all be done without losing sight of the fundamentals of governance as described in Back to the Basics – The Four “Ares” and A Value-Driven Framework for Change.