{"id":1132,"date":"2020-09-14T18:16:03","date_gmt":"2020-09-14T18:16:03","guid":{"rendered":"http:\/\/janbosch.com\/blog\/?p=1132"},"modified":"2020-09-14T18:16:03","modified_gmt":"2020-09-14T18:16:03","slug":"six-reasons-why-your-digital-transformation-is-failing","status":"publish","type":"post","link":"https:\/\/janbosch.com\/blog\/index.php\/2020\/09\/14\/six-reasons-why-your-digital-transformation-is-failing\/","title":{"rendered":"Six reasons why your digital transformation is failing"},"content":{"rendered":"\n
\"\"
Image by Gerd Altmann from Pixabay\n<\/figcaption><\/figure>\n\n\n\n

The common theme over the last weeks, as I started to talk to more and more folks in companies, is the difficulty of realizing digital transformations. Granted, I work with many who are expected or having taken it on themselves to drive the digital transformation of their organization, but I believe the challenge is widespread.<\/p>\n\n\n\n

Especially in the embedded systems industry, there\u2019s a large group of people who originate in the mechanical or electronics world and can\u2019t see beyond the limits of their technological perspective. With a digitalizing business, mechanics and electronics don\u2019t go away \u2013 we still need a chassis and a computing platform. The main difference is that these technologies shift from being differentiating to being commodity (see figure). This causes a shift in perspective as you drive innovation when something is differentiating and you look to minimize cost when something is commodity. When the precious engine, braking system or propulsion chain suddenly needs to be optimized for cost instead of innovation, all working with that technology suddenly resist change. But the fact of the matter is that in virtually every industry, the differentiation is largely generated through digital technologies, ie software, data and AI.<\/p>\n\n\n\n

\"\"\/
Differentiating versus commodity technologies<\/figcaption><\/figure>\n\n\n\n

We also see a shift in business model. In industries dominated by \n\u2018atoms,\u2019 the primary business model tends to be transactional. You buy a\n box, use what\u2019s in the box until it\u2019s old and then you buy a new box. \nIndustries that focus primarily on \u2018bits\u2019 tend to use continuous \nbusiness models such as subscription and service models. In these \nindustries, customers expect the offerings that they\u2019re using to get \nbetter all the time. This shift may seem trivial but has huge \nimplications on the architecture of your products, the way R&D is \nconducted, how you support your customers and even the company\u2019s \nfinancial model.<\/p>\n\n\n\n

With digital transformations, it seems to me that there are at least \nsix behaviors that can be identified. First, the \u201cit\u2019s not my problem\u201d \nsyndrome. Here, the patient thinks that digitalization has to do with \ndata being shuffled back and forth between boxes that are outside his or\n her area of responsibility. As it\u2019s not in scope, it\u2019s not a problem \nthat the individual has to contend with nor worry about.<\/p>\n\n\n\n

The second challenge is the \u201ctoo complicated\u201d case. I recently read \nabout a study where people were offered to sit on a chair and think \nwithout distractions (like their mobile phone) or receive mild electric \nshocks while being allowed to distract themselves with an app of their \nchoosing. Interestingly enough, a large majority preferred to receive \nelectric shocks over being \u2018forced\u2019 to think. Digital transformation \nrepresents a fundamental paradigm shift and there\u2019s a significant group \nof people in companies that simply can\u2019t be bothered to logically think \nthrough the consequences of this.<\/p>\n\n\n\n

Even when individuals and teams accept data-driven practices, one \ninteresting observation that we recently got confirmed in several \ncompanies is that although many organizations have top-level KPIs and \nmany teams have local KPIs, there\u2019s no real connection between the two. \nThe consequence is local optimization based on team metrics as there\u2019s \nno agreed-upon way to connect local and global KPIs. As local metrics \ntypically are short-term and based on the current, traditional business,\n they slow down or stop any digital transformation.<\/p>\n\n\n\n

A consequence is the \u201clocal bastardization of global strategy\u201d \nchallenge. As the link between the company strategy and the team actions\n is tenuous at best, team members will develop a rhetoric on how what \nthey\u2019re doing today is actually supporting the company strategy. Any \noverly obvious mismatches are then explained away by referring to the \nlocal and short-term challenges that need to be overcome first.<\/p>\n\n\n\n

The fifth behavior I run into a lot is the \u201cit\u2019s too early\u201d argument.\n Here, the protagonist claims to agree with all the points made related \nto the consequences of digitalization but in the same sentence claims \nthat these implications will only realize themselves years down the \nline. Consequently, it\u2019s too early to start making changes.<\/p>\n\n\n\n

The final excuse that gets used almost continuously is that \n\u201ccustomers aren\u2019t asking for it.\u201d This seems like a quite reasonable \nargument until you realize that all companies that waited until \ncustomers asked them for new functionality, business models or \ntechnologies have gone out of business because they were disrupted by \nmore enlightened competitors or new entrants. Customers will simply go \nsomewhere else when you haven\u2019t predicted their needs. They won\u2019t ask \nbut simply vote with their feet.<\/p>\n\n\n\n

Concluding, the realization of digital transformation in many companies is a slow, brutal, uphill battle that leaves proponents frustrated, tired and scarred. I\u2019ve described six typical behaviors of so-called \u201crejectors\u201d that you should be aware of if you\u2019re to have any hope to overcome this resistance. The digital transformation is real, but many incumbents are moving too slow to avoid disruption.<\/p>\n\n\n\n

To get more insights earlier, sign up for my newsletter at <\/em>jan@janbosch.com<\/em><\/a> or follow me on<\/em> janbosch.com\/blog<\/em><\/a>, LinkedIn (<\/em>linkedin.com\/in\/janbosch<\/em><\/a>) or Twitter (<\/em>@JanBosch<\/em><\/a>).<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

The common theme over the last weeks, as I started to talk to more and more folks in companies, is the difficulty of realizing digital transformations. Granted, I work with many who are expected or having taken it on themselves to drive the digital transformation of their organization, but I believe the challenge is widespread. … Read more<\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"generate_page_header":"","footnotes":""},"categories":[8,10],"tags":[],"_links":{"self":[{"href":"https:\/\/janbosch.com\/blog\/index.php\/wp-json\/wp\/v2\/posts\/1132"}],"collection":[{"href":"https:\/\/janbosch.com\/blog\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/janbosch.com\/blog\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/janbosch.com\/blog\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/janbosch.com\/blog\/index.php\/wp-json\/wp\/v2\/comments?post=1132"}],"version-history":[{"count":1,"href":"https:\/\/janbosch.com\/blog\/index.php\/wp-json\/wp\/v2\/posts\/1132\/revisions"}],"predecessor-version":[{"id":1134,"href":"https:\/\/janbosch.com\/blog\/index.php\/wp-json\/wp\/v2\/posts\/1132\/revisions\/1134"}],"wp:attachment":[{"href":"https:\/\/janbosch.com\/blog\/index.php\/wp-json\/wp\/v2\/media?parent=1132"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/janbosch.com\/blog\/index.php\/wp-json\/wp\/v2\/categories?post=1132"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/janbosch.com\/blog\/index.php\/wp-json\/wp\/v2\/tags?post=1132"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}