For much of the last decade, companies have gone all-in on their Digital Transformation efforts, anticipating that a rip-and-replace shift to the cloud would quickly carry them into a new age. When COVID-19 hit early last year, attitudes towards transformation initiatives quickly changed, as all business decisions became more about survival than anything else. Businesses shuttered their brick and mortar operations and turned to digital means to simply stay afloat. As the number of COVID cases climbed and fell and then climbed and fell again at various points throughout the year, business owners were forced to cease operations at the drop of a hat. If we have learned nothing else, it is now clear as day that data is the lifeblood of sound, responsive decision-making. Transformation initiatives certainly accelerated in 2020, and we will without a doubt see this acceleration continue into the new decade.
But, just as before the pandemic took hold, the road to success won’t be as easy as companies were initially led to believe. We can hope that the world we live in will change for the better this year, but businesses cannot simply hold out hope and do nothing else. By prioritizing their human talent and ensuring the business is taking an outcome-first approach in everything it does, companies can prepare for stability and success in the years to come.
Amid this rocky start to the new decade, we’re embarking on the next iteration of business evolution—Digital Transformation 2.0. Unlike its 1.0 predecessor, this next attempt at transformation will benefit from putting more trust in humans and their ability to engage with technology to produce results.
In an earlier post, I sounded the alarm about companies embarking on digital transformation efforts as a way to replace humans with machines, noting that while machines are enablers of business, humans provide the situational context and creativity needed to solve the most complex business problems. With an outside-in approach–one where leaders allow external drivers rather than internal culture shape the path for business processes–the effort is more likely to fall flat because those established processes must continue to run the business while the new technologies are inefficiently integrated.
Frankly, it’s a backwards approach–and one need not look any further than U.S. industrial giant General Electric (GE) to understand why. In the early part of the last decade, the company’s leadership revealed that it had shifted from being an industrial giant to being a data and analytics company and moved forward with a strategy that would end with its CEO stepping down, its portfolio in disarray and its shareholders taking a financial beating.
