Why Your Org Can’t Succeed at Digital Transformation

Digital transformation urges a transfer of power that powerful people never intend to do.

If digital transformation is really as awesome and game-changing as some claim or agree with, then we’d expect it to be so much more than adopting digital technologies without deep impact on the purpose, culture, structure, process, and function of an organization.

You can’t have it both ways, can you?

You can’t, on one hand, sing the praises of how awesome, innovative, or disruptive digital transformation is, while, on the other hand, making excuses when it comes to actually doing it.

So what’s the use of digital technologies in the context of digital transformation?

Perhaps at least two things: automation, and making better decisions.

Automation is for tactical effectiveness and efficiency.

In digital transformation, instead of having humans laboriously and manually handle some computation-intense processes, we make use of digital technologies to do it for us. The role of humans shifts from labourer to curator, by curating and working with machines to streamline and optimize the automation.

Making better decisions is harder. In digital transformation, we need digital technologies to augment our capability and capacity for computation, since we humans now, paradoxically, create far more information than we can process.

And on top of that, we need “smart” technologies like advanced analytics and artificial intelligence to meaningfully support how we make decisions, when we can no longer afford doing it manually and alone.

Both automation and making better decisions demand something you might not realize: clarifying how we make decisions. For automation, we need to clarify the logic of the process and human judgement’s role in it. For making decisions, we need to clarify the power structure we rely on doing so.

Decisions about logic is relatively easy to make, while decisions about human judgement is a lot harder.

A lot of non-logical stuff goes into human judgement.

In an organizational context, cultural norm, team dynamics, economic situation, or political circumstance is tightly coupled with how decisions are made.

When there’s a hierarchy of authority, as in the case of most organizations, power structure is the one factor that influences all other factors.

That’s where digital transformation hits the impenetrable barrier.

Because people in power don’t like to clarify the power structure they rely on for making decisions.

Powerful people have many ways to act out their power. One particularly effective way is through the power of discretion. With exactly the same factual context around the same issue, different people in different organizations may make very different decisions, depending on the context. And that context is often power structure.

More often than not, it’s one thing for executives (or other people in power) to show their unanimous support for digital transformation, and it’s quite another for them to actually contribute to implementing it along the way:

“Absolutely I fully embrace digital transformation! In fact, at the core of my leadership and my leadership team is our digital transformation strategy! Oh man, you have no idea how serious I am about it! Our organization’s survival and future success depend on it! … what? You want me to clarify how I make decisions? Well, I’m afraid I can’t really do that! Not that I can’t rationalize it, but, you know, there are a lot of things going into making decisions at the strategic level. You know that, don’t you? It’s not as simple as if-then, and-or! It’s not simple logic! For God’s sake, we’re humans!”

Let that sink in the next time you think about digital transformation.

But, you might ask, algorithms and AIs can’t possibly replace all human decision-making, can they?

Of course not, but the implication of digital transformation is not so much in that machines are the receiving end of the power transfer, but in that the transfer reconfigures the organizational politics, from emotional politics to computational politics.

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