Transformation is bold — own it!
Business culture in the 2020’s doesn’t have to be remembered for its terminology inflation, theatrics and failures (11)(17).
It’s probably one of the toughest times in a century to be a business (1). The technology intensity is at its peak leaving all of us in uncharted waters (2). But this is not our first business cycle (3)(4) and the pattern is familiar. What are the rules of the game that will bring us successfully forward?
There are two paths: one is to listen to and act on the changing demand patterns of the customer which have always led the way through previous cycles (5).
The second is to be enamored by the glittering lure of technology and data .. a simpler, clearer course of action unfortunately famously internally myopic and a poor predictor of opportunities (6).
The first path is challenging, its unclear what customers want as they haven’t seen it yet, but one can manage by having a lean flexible strategy (7) a culture of experimentation (8) and a focus on people (9). I write about this in abundance here.
The second path is a decoy. And as it fails to provide results (10)(11), we compensate by bringing in new actors (terminology) to create the illusion of progress (the theatrics).
The actors and the theatrics
Back in the 2010's the term change was all the rage, but it quickly got old and we needed something new.
Change turned into innovation focusing on new ideas, then continuous improvement if we were looking to offer the same ideas but with more efficiency .. and then eventually experimentation if we were balancing between both of them.
But then these terms got outdated to.
And a new term: Transformation started (re-)emerging.
Transformation is flashy .. more ambitious, exiting, bigger.
But transformation also means doing something most organizations aren’t designed to.
Organizations can easily improve, change or consume new technologies to keep doing what they are already doing, but this is not more than an operational improvement.
Transformation on the other hand alludes to something completely different: it means changing the foundations of how the company does business: why and how it thinks and acts the way it does.
Transformation is a change in framework, mental models (12), paradigm (13).
Transformation literally means a transition between two forms, which is rooted to its origin in both Greek and Latin and its relation to physics in the 16th and 17th century.
Shoshana Zuboff describes transformation while using her own term mutation:
[transformations] create new frameworks; they are not simply new technologies, though they do leverage technologies to do new things. Historically, [transformations] have superseded innovations when fundamental shifts in what people want require a new approach to enterprise: new purposes, new methods, new outcomes (14).
In other words: transformations are massively ambitious undertakings, suggesting that we can change the shape of a whole or one part of the company entirely in order to accommodate fundamental shifts in what people (employees and customers) want.
And this is also how its sold .. well almost..
Approximately 90% of transformation efforts fail (11) because they aren’t transformations in the first place. They are bigger than normal operational improvements with an amplified narrative to make them sound more important than they are (theatrics).
They are often mere efficiency plays where the introduction of new technologies are supposed to make work faster or more effective for the employees, or offer more relevant services to customers.
But they aren’t transformational in the intended meaning of the word, and this is also why they are failing: Installing a new technology likely won’t offer any transformational sized outcome.. only incremental improvements (15).
“New technology, no matter how transformative, is not enough to propel a business into the future.” — Irving Wladawsky-Berger (15)
The ‘why’
To change someone’s “purpose, method or outcome” (14) we need to change the ‘why’ we are doing what we are doing, not only the ‘what’ we are doing.
And this is the big gap for many transformational efforts. They start with what’s simple and predictable: the ‘what’, and then never get to the hard influential stuff: the ‘why’.
And we end up lost in the whirlpool of incremental improvement while never even pulling the levers that could lead to the transformational change that was promised.
Transformations are not about the technologies, but the people
Were still in the beginning of the 2020’s, but already a global pandemic and the emergence of Large Language Models (e.g. chatGPT) has had a tremendous influence on what people want from work (as employees) or want to work with (as customers) to resolve their important and unmet needs.
But our love for the the glittering lure of technology , data, AI and chatGPT is sucking up all the oxygen in the room and organizations are responding to the challenge by putting up a technology theater that demonstrates only to produce mediocre or no results (11), angers their employees (16) and disappoints their customers (17).
If we need transformation and are wiling to make the tough investment in it, remember it’s not about the technology, but the people. Without a transformative new ‘why’ your ‘what’ will never deliver desired results.
Sources:
(1). Carlotta Perez, Technology revolutions and financial capital, https://www.researchgate.net/publication/270180048_Technological_Revolutions_and_Financial_Capital_The_Dynamics_of_Bubbles_and_Golden_Ages
(2). Shoshana Zuboff, The support economy: Why Corporations Are Failing Individuals and the Next Episode of Capitalism, https://books.google.it/books/about/The_Support_Economy.html?id=xvR_upcQSYYC&redir_esc=y
(3). Joseph A. Schumpeter, Business Cycles, https://www.mises.at/static/literatur/Buch/schumpeter-business-cycles-a-theoretical-historical-and-statistical-analysis-of-the-capitalist-process.pdf
(4). Helge Tennø, What can we learn from previous transformations, https://medium.com/everything-new-is-dangerous/what-can-we-learn-from-previous-transformations-becab3de10f8
(5). Shoshana Zuboff, The changing content of capitalism, https://www.180360720.no/?p=5112
(6). Ted Levitt, Marketing Myopia, https://hbr.org/2004/07/marketing-myopia
(7). Roger Martin, Artistry and strategy, https://medium.com/@rogermartin/artistry-strategy-c196ebe036aa
(8). Stefan Thomke, Building a culture of experimentation, https://hbr.org/2020/03/building-a-culture-of-experimentation
(9). Humanocracy, Gary Hamel & Michele Zanini, https://www.humanocracy.com/
(10). John P. Kotter, Leading change: why transformation efforts fail, https://hbr.org/1995/05/leading-change-why-transformation-efforts-fail-2
(11). Michael Mankins and Patrick Litre, Transformations that work, https://hbr.org/2024/05/transformations-that-work
(12). Farnam Street, Mental Models, https://fs.blog/mental-models/
(13). Donella Meadows, Leverage points: places to intervene in a system, https://donellameadows.org/archives/leverage-points-places-to-intervene-in-a-system/
(14). Shoshana Zuboff, Creating value in the age of distributed capitalism, https://www.mckinsey.com/capabilities/strategy-and-corporate-finance/our-insights/creating-value-in-the-age-of-distributed-capitalism
(15). Irving Wladawsky-Berger, It’s All About Business Model Innovation, not New Technology, https://www.wsj.com/articles/its-all-about-business-model-innovation-not-new-technology-1541185215
(16). Gleb Tsipursky, The forced return to the office is the definition of insanity, https://fortune.com/2023/06/26/forced-return-to-office-is-the-definition-of-insanity-remote-hybrid-work-careers-gleb-tsipursky/
(17). Forrester, The 2024 Forrester CX Index Report is a Wake-Up Call, https://ethossupport.com/the-2024-forrester-cx-index-report-is-a-wake-up-call/
