185. What companies will get wrong in digital transformation in 2024Jan 10, 2024
Digital transformation and AI are going to continue being a top priority for most CEOs this year. But, 70% of these expensive projects fail to meet their goals, according to McKinsey.
Listen to this episode to learn what will continue hampering digital transformation efforts in 2024, and what you can do to succeed instead, both as a company and as an individual.
Listen to this episode to learn:
- Two main reasons why most digital transformations fail
- How to design your own curriculum to succeed as a Digital Leader
- Three steps to demystify tech for you or your organisation
This is part 2 of the 2024 tech predictions mini-series.
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Resources mentioned in this episode:
McKinsey: Eight CEO Priorities for 2024
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Hello smart people!
How are you today? How is 2024 for you so far?
I prefer to ease into the new year, to take my time, to reflect and to really envision what I want my year to be in January. I think the tendency to attempt to change yourself entirely, which is so popular in the early part of January, is damaging.
I don’t think you need a “New Year, New You” doctrine. If you are listening to this podcast, you are clearly a person who is curious, wants to learn and is dedicated to their professional growth. You are impressive! So I don’t think you need an entire personality overhaul.
Being clear about your aims, and how they fit into the wider vision of your life, is useful. This is why I am in favour of New Year resolutions. A new year resolution is a goal to solve for. If we don’t have a goal, we don’t know what problem we are solving for.
For example, if your aim is to work with a new tech client this year, you know that you need to learn something about what they do, understand how to market to them and build a relationship with the CEO to close the deal. Or, if your aim is to get promoted this year, again, you know what to solve for. Even if you don’t know each step to get what you want, you at least know the next step.
But when I see people making 10 resolutions, that are focussed more on reducing weaknesses than making most of their strengths, I get wary. Firstly, it’s probably not going to work, and secondly, it will be bloody miserable.
I see this especially amongst high achieving smart people, ie the people who listen to this podcast. You already know how to push yourself through tasks you hate, so you just pile on more. But, professionals and organisations that focus on making the most of their strengths perform better than those that focus on just mitigating their weaknesses.
There is actual research to back this up.
So, to make a realistic, but ambitious plan, and to learn a vital professional skillset for the Digital Age, I suggest you join my Design for Growth program on 28 January.
This is a workshop that consists of two main parts.
First, you will learn design thinking principles, which will be covered by me and a very cool Lead Designer, and then, in the second part, we will use these principles to create a plan of action for your best year yet.
You can use the Design for Growth program to create a new product, to launch or grow a venture, or to transform your career. I have used design thinking for all three, and it works.
As well as this workshop, you’ll also get a class on how to get headhunted, so you can make opportunities come to you, which we will do in February. All of this is online, so you can grow your network, and learn new skills without leaving your house.
There’s also a bunch of bonus resources, which are all in the program description at techfornontechies.co/events and in the show notes
This is going to be a very small group, so everyone can get feedback and coaching, and make genuine new connections, so make sure to get your space before they’re gone.
In today’s episode, I’m going to share my second prediction of 2024, and next week you will get my final prediction in this mini-series. The first prediction was about the rising importance of closed large language models, that will be industry or company specific, and which industries these models will disrupt first.
If you haven’t listened to that episode yet, it’s a good one, so listen to it after this.
Today I wanted to talk to you about the fact digital transformation is going to continue being a top priority for most companies and C Suites in 2024, but the approach towards upskilling teams is going to continue being misguided, and this means you need to take your digital curriculum into your own hands if you want to be successful. I’ll show you how to do this in this episode.
I saw a report on what’s on the minds of the top global CEOs as we enter 2024 from McKinsey, a fancy consultancy, and it says that digital and AI are going to be their this year. I think that’s obvious, but what’s less obvious is how leaders’ attitude towards digital transformation has changed over the years.
McKinsey says that:
“As the digital era enters middle age, most companies have at least started a digital and AI transformation. But few are getting the results they want; that’s usually because they haven’t done the fundamental organizational rewiring needed to extract maximum value from the hard work of digitizing the enterprise.”
If you’ve been listening to this podcast for a while, you would have heard episodes on why digital transformation goes wrong so often. In fact, according to another piece of McKinsey research, around 70% of digital transformation efforts fail to meet their goals.
There are several reasons for that, but in my experience it comes down to two main factors:
Factor one: the digital transformation effort is focussed on upgrading technology, rather than on serving the customer. This means that it’s a top down approach, maybe suggested by McKinsey, which is all about cost cutting and efficiency.
Don’t get me wrong, efficiency is a good thing. I run a very lean business and I like it. But, to have a successful business you need satisfied customers. And what do you need to do to have satisfied customers? You need to think about them. Understand them. Anticipate their needs.
This is actually something that designers do really well, which is why I keep going on about the benefits of learning from them here. And, if you haven’t yet, make sure to get your seat at Design for Growth, because it’s happening so soon!
So, one of the two biggest reasons digital transformations fail is that they are not focussed on the customer, but focussed on whatever the corporate priority is.
To run a successful enterprise, you need a mix of both: top down corporate strategy, and bottom up user focus.
So while digital will remain a priority for company leaders this year, those that only have this top down approach will continue having problems.
And the second reason digital transformations don’t meet their goals is that the organisation hasn’t prepared its people properly. I’ll read what McKinsey says in their Ceo survey again: “few organisations are getting the results they want; that’s usually because they haven’t done the fundamental organizational rewiring needed to extract maximum value from the hard work of digitizing the enterprise.”
This includes training people properly to succeed in companies going through Digital Transformation. This is really important.
You can have the most insightful strategy, the best technology and even have great customer insights, but if all of this excellence is hidden in different pockets of the organisation, an expensive digital transformation effort won’t succeed.
Most companies approach their upskilling efforts really badly. And this even includes the Big Tech players. I know this because their employees often sheepishly come to Tech for Non-Techies and surprise me with their lack of digital knowledge and the confusion they feel around their colleagues.
So, my advice to you is to take your curriculum into your own hands, so you can really lead in a business world undergoing digital transformation.
This requires sophisticated thinking, and discernment. This requires thinking for yourself, and withstanding the pressure to sign up to useless courses. It is January, so I know many of you are trigger happy right now and signing up to everything under the sun.
Slow down and think. This goes for corporate decision makers too.
What I often see happen when there is a new tech hype is that corporates start teaching people courses on how to do something, but don’t tell them why they need to do it, or how this technology fits into a broader context.
I’ll give you an example. A corporate training program might give you the opportunity to learn Python. This could be a very good thing, or it could be totally useless and painful for you.
If you don’t know what Python is, who uses it and why, you do not have the context. In my experience, corporates, business schools and training centres like to offer courses that go deep into a skill without telling you what it is or why you need it.
It’s like teaching you how to make a brilliant surgical stitch, but giving you no other knowledge of medicine or explaining why that stitch needed to happen in the first place.
Yes, a surgeon knows how to make a stitch, but that’s not how they started their medical training. They began with a holistic understanding of the human body. You also need a holistic understanding before going deep into a specific subject area.
The thing is, it is easier to teach and to sell a course on a specific skill, like learning ChatGPT prompts, and this tendency goes back to the industrial revolution. It is the Digital Age equivalent of saying: our factory has a new machine, so to be successful here, you need to learn how to this machine.
My role here is not to teach you to be the best user of a particular machine. The person who is the best machine operator does not rise to the top. They are not in the C Suite, they are not the CEO, they are not the Partner leading an account, and they are not the strategic advisor the CEO calls on.
If you want to be the best machine operator, this podcast is not for you. If you want to be the best strategic leader, and see yourself at Davos or in the boardroom, then it is.
So, as companies invest more and more in digital transformation, upskilling their teams is also going to also be top of the agenda. For you, I suggest you approach this with discernment and use your time and your budget wisely.
Here is how I suggest you create your digital curriculum this year:
First, learn to understand how traditional businesses differ from digital first businesses. What key concepts are different, and which are the same? For example, the way digital teams measure success is different to how traditional businesses measure success. If you don’t know that, but you’ve learnt Python, you’re not going to be leadership material or strategic advisor material. So stay focussed on your aim, and don’t get lost in the weeds.
Another key skillset for you to learn is how to identify problems that need to be solved and why. This is design thinking. Technologies change, hype comes and goes, but the skill of identifying the right problem to solve, amongst a myriad of options was as useful to Kenghis Khan and Catherine the Great as it is to Tim Cook and Satya Nadella today.
And finally, get a holistic view of how a tech product goes from idea to scale. Who do you need to work with first? Usually, it’s a designer or a researcher, and not a developer. Do you know what happens once a product is released? Like what happens when Uber releases a new version of their app, what do they do next? Once you have a holistic overview of how a product goes from idea to scale, then you can make smart informed decisions for what you need to learn next.
So, to sum up, digital transformation is going to be top of the CEOs agenda in 2024. This also means that education programs around it are going to keep growing. Be clever here. Do not get swept up in other people’s agendas, because they are unlikely to be as thought through as what I’m giving you here.
Think for yourself, and design the curriculum that fits your needs, and the needs of your organisation.
If you would like some sophisticated help with this, get in touch and let’s have a chat. I obviously teach tech and innovation concepts to people on the business side, but what also really love doing is creating education programs to up skill entire organisations for the Digital Age.
All the details to contact us are in the show notes, or just reach out on LinkedIn.
As always, my dear smart person, thank you for lending me your ears today. I am so grateful for your attention.
I hope you have a wonderful day, I hope you get a nice surprise today.
And I’ll be back in your lovely smart ears next week.
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