Episode 75: “Digital Transformation vs Digital Change”

In this episode Johnny discusses the topic of digital transformation vs digital change with Rob Llewellyn, an independent Digital Business transformation advisor.

Rob has been helping leaders of large organizations to take commercial advantage of technology for over two decades. His breadth of knowledge and experience is demonstrated through his vast repository of free and premium online content and over 20 years of high profile international engagements.


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Transcript:Episode 75: “Digital Transformation vs Digital Change” with Rob Llewellyn

Can you share with us a brief overview of your background?
Yeah, so let’s go back to the 90s where I got involved in the technology and quickly moved into the arena of project management and program management and more recently transformation management. I’ve probably spent my time in around 25 countries now around the world inside different organizations, the private sector, public sector, normally pretty large size companies from about 5,000 people up to the DHL with 30,000 people.

I have seen a lot of different environments and all the challenges that go with projects programs and transformation inside those environments. The majority of my time has been helping these organizations generate commercial value from technology.

Can you define the digital transformation for us in your own words?
Digital transformation is about doing business differently because technology now makes it possible. We have got some tremendous new technology breakthroughs in the last few years and that enables us to do business differently. E-commerce isn’t about the internet, it’s about selling differently and analytics, it’s not about databases and algorithms.

It is about understanding customers better or optimizing processes or helping engineers identify problems with aircraft etc. I think a lot of companies right now are obsessed with digital strategy and the word digital, or the turn digital transformation. Often a digital strategy places the emphasis too much on digitizing what already exists and not actually on transforming the business.

If a company is really committed to legitimate transformation, they don’t need a digital strategy, they need a strategy which is enabled by digital. Long story short, digital translation is about doing business differently and using the brilliant technology that we have available to us.

How is a digital transformation different from a digital change?
I see a lot of organizations right now that are focused on digital transformation and they’re starting a lot of projects which digitize what they’re already doing. They are making some good changes to the organization but they’re not actually changing the way they do business. They might be introducing new digital technologies, which is great and sexy and you know the kind of stuff in which everybody wants to be involved in.

They are not actually changing anything fundamental about how the business goes. It’s about changing the way we actually do business. I think it’s really important that organizations recognize when they are actually spending their time, their money, and their resources on just digitizing what they already do. Making things a little bit faster, cheaper or better but effectively doing the same thing that they’ve always done except with some digital technology.

That’s what I turn digital change. Are they really transforming their business? Are they taking full advantage with these tremendous technologies and actually changing the way they do business? That’s why I think is really important to differentiate between digital change and digital transformation. We’ve all seen the stories of small startups coming along and disrupting industries where we all know that the typical examples like B&B etc.

Digital change projects are not actually going to protect against any of that. It’s not going to protect an organization from any disruption in the market. That’s really important for companies to recognize because when they are investing all their time, money and resources and just creating a better version of the past, they are not protecting themselves in any way from this disruption, which is going to come in every industry sooner or later.

Also, it is not going to disrupt their digitizing what they currently do, their current business models is not actually going to disrupt, it’s not going to create an enormous competitive advantage for these organizations in the markets in which they operate or in other markets. It’s just going to enable them to carry on as they were before, doing things faster, better, cheaper, but not actually fundamentally transforming the way they do business. It’s important for companies to recognize that they need to invest in digital change.

These technological upgrades which we’ve been doing for decades in companies, they need to happen, to keep things up to date and to make things faster better cheaper. But the true meaning of legitimate transformation is about fundamentally changing the way we do business. I don’t think enough companies are actually paying attention to this. I think they get caught up with the fact that, “Yes, we’re working with new digital technologies and then the assumption is that we are now transforming our business, we are doing the digital transformation.” The reality is that they are simply undertaking digital change.

Should they be concerned about it and what are they concerned about typically when they’re going and looking at digital transformation?

The most important thing is that recognition of the two different things, digital change and digital transformation. It is very difficult to recognize this and to focus on digital transformation and on digital change. It’s really fundamental that your organization first recognizes the difference between transformation and change and then communicate this across the organization so that everybody understands what the difference is between these two and to not simply dedicate all the time, resources etc. into digital change.

Transmission is about either disrupting or protecting against disruption. Digital change is not going to help you either of those. Companies really need to focus on digital transformation, also. The worry is that when a company is so focused on its digital change projects that actually the best people are caught up in these change initiatives and not enough attention is being paid to transforming the company in a way that will disrupt the market or protect against disruption.

The first thing is the recognition that there are two different things, change, and transformation. Then you need to ask yourself “Okay, we know we’re running these digital change projects but what are we actually doing to fundamentally transform the way we doing business? How are we using technology to do business differently and not doing the same thing we have been doing the last decade?”

It reminds me of a little cartoon which I published about a year ago. There’s a guy standing in front of a whiteboard, in front of his team and he’s announcing we are digitizing the way we do our marketing and somebody in his team said that’s a great way to promote our antiquated business model.

You had mentioned the great digital illusions in our previous conversations. What other actions can we take so that we don’t fall victim to the great digital illusion?

It’s coming back to recognizing the difference between transformation and change. That is really important. If that’s not done, the danger which I see many companies have this illusion right now and simply because they’re executing a lot of digital projects. They are under this illusion that they’re actually transforming the business but they are not. This is dangerous because they’re putting so much time, money, and effort into these change projects that they are not fundamentally changing the way they do business.

They’re not setting themselves up to protect against any disruption which is going to come along and they’re not actually doing anything which can disrupt the market. They give themselves this false sense of transformation security. It’s the false use this term digital transformation just the simple use of those two words is lulling companies, leaders, and managers into this false sense of transformation security.

They see that “Yes, we’re spending this money, we’ve got these people, these resources and partners engaged in these digital projects and this is our transformation which is what we know we should be doing.” But, a lot of these organizations are fooling themselves because they’re not actually transforming anything, just creating a better version of the past.

Transformation is about creating a new future, fundamentally changing the way they do business. The worry is that these organizations live under this illusion that they are undertaking transformation when actually they’re not. The first thing is to recognize the difference and then set the approaching their digital change projects which are necessary but then also approaching transformation.

“How we’re innovating?” Transformation is impossible without innovation because we cannot fundamentally change the way we do business and create new business models without innovation. A lot of these companies are going about their transformation with no innovation processes, no innovation experts involved. They’re not really creating anything fundamentally new.

It’s important to recognize that innovation plays a significant role in transformation. Digital and digitization of activities is also important but we cannot transform unless we understand the importance of innovation and help to sow the seeds what will form the basis of a transformation in an organization and you need innovation to initially sowing those seeds.

What impacts does it have on project management?
Project management executes the strategy and initially that strategy needs to be correct because we could be executing projects in a wonderful manner but if we’re executing projects which are part of the strategy which is not set up to transfer one organization, that’s not actually taking the company on the road to success even if they are delivering successful projects. That strategy is really important and you know once we have that strategy, then project management is as important in digital change or digital transformation in the way that it’s been important for the last many decades.

It’s fundamentally important to executing any strategy. The unfortunate thing is some of these strategies and not necessarily the right strategies and the perfect execution of wonderful project management can sometimes be actually executed upon a flawed strategy.

But, project management remains core for making a digital transformation and digital change successful. On the other hand, we could also have the most tremendous transformation strategy but if we can’t execute upon that strategy, then we’ve all seen the horror stories and for many decades has this been going on not just in this digital era.

If we can’t execute on a strategy, we then spend far more money and time on these projects that are unnecessary and sometimes they don’t even materialize. Project management remains fundamental, I think it remains one of the biggest shortcomings in these organizations that have been great aspirations of digitizing, whether it is a digital change or digital transformation. But they don’t understand the expertise and the capabilities required to be able to execute a project and programs in a proper manner.

As they say, this is nothing new. We are executing something now with all this great digital technology whether it is the block chain or IOT involved or whether we were executing projects 20, 30 years ago with all the technology. Good project management and program management remain fundamental to the success of all of these initiatives.

Do you have online courses where people can check this out and connect with you online?
The platform is called cxotransform.com, so that’s where people can go. We have got a couple of digital transformation courses there and a lot of free material. The transformation chamber is a free resource which people can access to download some of the world’s best material published on transformation. There’s plenty for anybody who is focused on developing themselves in the world of transformation.

Show Notes:

Find out more about Rob’s work at robllewellyn.com.
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