Digital Transformation Is, Fundamentally, Not about Technology

As David Rogers, faculty director of Columbia Business School’s Digital Business Strategy program, notes in his early remarks, “Digital transformation is, fundamentally, not about technology.”

This sentiment was at the core of the Center on Global Brand Leadership’s co-produced webinar with Drew Ianni, Founder and Chairman of CDX, on “Digital Transformation - The Future of Work and Organizational Design,” which featured both Rogers and Juliana Nunes, Global Head of HR - Enterprise Technology, Johnson & Johnson.

Technological changes have influenced business and consumer capabilities, and digital technologies are obviously at the core of executing a transformation, but such efforts are only successful when there is an initial focus on strategy, organizational design, and culture. When those three elements aren’t attended to properly, you can get “the stymied CEO,” as Rogers phrased it, “who says ‘I’m allocating money to it, I’m talking about it, I’m giving authority to do this... why is it moving so slowly?’”

Rogers’ 2016 book, The Digital Transformation Playbook (video), focused primarily on the strategy side. It looked specifically at the need to better understand your customers, think more broadly about your competition, understand the value of your data, develop an innovation process that permits failure and iteration, and consider new areas of value you might provide to your stakeholders.

Working on his next book, Rogers is now illuminating the importance of developing new procedures around how the work effort of employees is measured and incentivized; what the governance model of an organization is; how projects are chosen, managed, and run; and how to better distribute the decision-making processes to all levels of an organization.

At Johnson & Johnson, Nunes is working directly on how to create environments in which people can do their best work; gain the skill sets they need around technology; and embrace an agile model in which projects are developed, tested, and refined before a decision is made to scale them. She notes that on their IT teams, this wasn’t hard, likely because they had read or trained on one of the “four religions of innovation,” as Rogers calls them – Agile Software, Lean Startup, Design Thinking, and Product Management.

Among the commercial teams, however, Nunes noted that making these changes was much harder. So to get started, they got permission, and had leadership support, from their EMEA region – driven in part due to underperformance – to push for new organizational processes. They moved into “squads” that combined staff with different responsibilities into specific product line groups to work together. “We saw quick success, and now have begun moving that training out to 6,000 employees,” Nunes noted. “We have found that agile is about removing waste, rather than about speed, and from that our product development efforts move faster.”

In terms of metrics, Rogers has found in his work with companies that approaches like OKR – objectives and key results – are most effective. This provides a vision towards what you are shooting for and is less quantitative and more mission-oriented. The key is to be “clear enough that you know when you get there, but this isn’t something you measure by quarter.” The results of your near-term efforts help evaluate whether you are getting towards the larger objective, rather than being “go or no go” metrics on their own.

At Johnson & Johnson, Nunes concurred, “We are trying to focus on the outcome. How can we see we are more focused on the customer, rather than internally? Can we use something like Microsoft Analytics, that manages our calendars, and see if teams are spending more time on internal meetings or on conversations with customers and stakeholders?” As Rogers states, “Companies that do best [in digital transformation efforts] spend much more time defining the goals and objectives, and then communicate about them repeatedly. Then they work on the metrics. Too many companies do the exact opposite.”