Although we're in at least the sixth decade of the Digital Era, Industrial Era knowledge, skills, and strategies still dominate the thinking and behavior of most individuals. This is particularly frustrating for consultants and change agents who have been championing the idea of social business, social enterprise, and enterprise 2.0, as this lamentation from Chris Heuer (and the resulting rich dialogue) demonstrates. Although my perspective is broader (I think it's important to consider not just software, but hardware, data/analytics, and networks, as well as human capital and operational implications), my experience corroborates those of other consultants and service providers. The possibilities that are very clear and powerful and valuable to us are none of those things to many professionals. Our "wow!" is generally countered by their "meh."
People ask me all the time what I think are the main reasons that organizational leaders and other senior professionals have not made significant strides in digitally transforming their organizations - or themselves. Why are so many of them resistant, reluctant - or worse? After countless hours talking to folks, reading and researching, and pondering the question, I've identified five primary barriers to digital engagement. There is a bit of a hierarchy to these barriers, but the relationships among them are not perfectly hierarchical. Each seems to reinforce and feed the others. The core barrier in my view, however, is the third one.
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Recognizing the Barriers to Digital Engagement
The barriers to digital engagement are evident in virtually all organizations, except perhaps large consumer brands. But even they have a ways to go, as their focus to date has been primarily on external applications of social and digital technologies (e.g., marketing) and less on internal applications and implications. And of course these barriers are evident in individuals as well, not just with respect to their organizational roles and responsibilities, but also in terms of their own career management.
Barrier #1: Not Taking Digital Seriously. Obviously senior professionals recognize that digital technology is all around them, but their own experiences tend to be limited to a consumer or individual perspective. Though many consumer technologies get converted to professional applications, their use in business settings is generally more complex than personal ones. And understanding technology as an individual consumer does not readily translate to a broader perspective in terms of economic, industry and organizational applications and implications. The commonly-held notion that digital technologies are "just tools" further undermines their importance, disregarding the fact that mastering modern-day means of communication and collaboration is far more complex and challenging than traditional approaches. The pen may be mightier than the sword, but it is a far more primitive instrument than an electronic device.
Barrier #2: Lack of knowledge and understanding of Digital Era realities. In spite of their smart phones, tablets, and favorite mobile apps, most senior professionals are still digital rookies. They are unable to put today's technologies in historical context, both with respect to the Digital Era and in the larger scheme of human history and technological evolution. They are often unaware of or have limited knowledge of technology trends that could have a significant impact on their industries and organizations - either by significantly enhancing or disrupting their current business models. Current trends that have potentially widespread implications but are not not widely understood include digital currency (e.g., bitcoin), 3D printing, cognition as a service (CaaS), and crowdfunding. And of course there are a host of risks and issues that need to be understood in a digital context, including privacy, taxes, cybersecurity and more. Even when it comes to the tools themselves, most leaders remain uninformed about the wide range of platforms and technologies that enable more efficient and effective approaches to communication and collaboration.
We often talk about the need for organizational leaders to carve out time for environmental scanning and strategic reflection. Leaders must now add a digital dimension to that imperative, making it even more crucial. To date, however, few leaders have.
Barrier #3: Framing alternatives in a way that leads to risk aversion.Professor Jerry Wind has asserted that "a successful business is the hardest organization to change" (read more), and that idea certainly applies to digital transformation. Kahneman and Tversky's Nobel prize winning Prospect Theory is illustrative in this regard. Simply put, the idea behind the theory is that when alternatives are framed in the domain of gains, decision makers tend to be risk averse. When framed in the domain of losses, however, they tend to be risk seeking. Consider the following scenarios:
- Gain Framed Scenario: An organization has revenues of 1 million and is keeping pace with current industry and marketplace dynamics. It is operating at capacity. Digital engagement and transformation have the potential to increase those revenues to 1.20 million, but they could divert attention from the core business and competencies, causing revenues to decrease to 900 thousand.
- Loss Framed Scenario: An organization used to have revenues of 1 million, but they've fallen to 800 thousand due to industry and marketplace changes. It is operating at capacity. Digital engagement and transformation have the potential to increase revenues back to 1 million, but they could divert attention from the core business and competencies, causing revenues to decrease to 700 thousand.
In both scenarios, the revenue/loss figures are the same: a potential gain of 200 thousand or a loss of 100 thousand. Prospect Theory - and plenty of anecdotal evidence - indicate that decision makers in the first scenario are unlikely to consider the risk worthwhile, whereas decisions makers in the second scenario would find it much more palatable.
Unfortunately, many organizational leaders seem to be guilty of the "frog in boiling water" syndrome, waiting until technological trends become disruptive and threatening before choosing to take action, instead of recognizing they can avoid the threats altogether by pursuing potential opportunities.
Barrier #4: Poor/no roadmaps for effective digital engagement and transformation. This barrier seems to manifest itself in multiple ways. I'd start with the overwhelming tendency of leaders to focus on the short term and tactical approaches rather than taking a longer-term, strategic view. As I've discussed with Didier Bonnet of Capgemini, digital transformation doesn't have to be either dramatic or immediate. It doesn't require revolutionary or disruptive change. It's perfectly appropriate for it to be evolutionary, incremental, and iterative. The key is to recognize that digital engagement and transformation will ultimately be a strategic imperative, and to start developing plans now to get from today's realities to tomorrow's necessities.
Given the lack of longer-term perspective, few organizations have developed a roadmap for digital transformation. In addition, leaders' short-term focus causes them to view digitally-driven changes as current expenses rather than investments in the organization's future. That view in turn leads them to develop unrealistic expectations for immediate ROI as a justification for moving forward.
In short, rather than recognizing they're embarking on a journey and preparing for it, they're basically just thinking about the next turn in traffic.
Barrier #5: No, inadequate or inappropriate resource allocation. This barrier is effectively the culmination of the preceding four. Although many organizations may have moved away from the "give it to the intern" approaches to digital engagement they employed a few years ago, they're still far from employing an optimal resource allocation strategy. There seems to be a general tendency to add these responsibilities to existing roles that appear to be related (e.g., marketing, sales, IT), even if the people in those roles don't have the expertise or capacity to execute them well. I've also seen instances where organizations "reward" someone who has done well in another capacity with spearheading digital transformation efforts based on their enthusiasm and interest, even if they aren't qualified. And in other organizations I've seen leaders assign people digital responsibilities simply because they are being underutilized in other areas.
These approaches can often result in suboptimization and/or failures that are more likely to be (mis)attributed to the inappropriateness or inadequacy of the technologies and tactics the organization is trying to employ rather than being recognized as management failures in understanding and deploying the proper resources to pursue digital initiatives. If it's not appropriate to assign someone with no education, training, and experience in accounting to manage accounts receivable, it shouldn't be appropriate to assign someone with no education, training, and experience in social and digital technologies to manage digital engagement.
Breaking Down the Barriers to Digital Engagement
What will it take to break down the barriers to digital engagement, so that organizational leaders and other senior professionals will commit themselves to digital transformation? First and foremost, they have to make a mental shift, to recognize that it's actually in their best interests to give serious consideration to how they and their organizations must adapt to Digital Era realities in significant ways.
How do we get them to make that mental shift? Based on my experience, the tactic that seems least likely to work is a full frontal assault from advocates and change agents. Threats and lectures only seem to increase resistance, and even logic and reason have limited impact. Even when organizational leaders understand the impetus for and potential value in digital transformation at a conceptual level, that high-level comprehension isn't enough to change their behaviors in any significant way.
Getting to the tipping point, when digital engagement and transformation are considered the norm, is going to take:
- Time. Change of this magnitude is going to be slow, especially in industries and organizations where there's not much precedent for the potential value that new technologies and ways of working can offer. It will take time to shift perceptions of Digital Era technologies from novelties to utilities, and from short-term fads to long-term trends.
- Increased media exposure. A year ago, little was written in the mainstream press about topics like digital currency and cybersecurity. More recently, ideas like digital transformation and cognition as a service are still being introduced. The more subjects like these move from technical and niche publications to more widely-read outlets, the more likely their importance and implications will be understood.
- Education and training. Both formal and informal approaches to learning - especially programs targeted to leaders and experienced professionals - will help accelerate the necessary shifts in knowledge and understanding, and ultimately behavior. Academic institutions, private service providers, and employers themselves need to make digital literacy a strategic imperative for workers at all levels in a all types of roles.
- Relatable market leaders. The more examples there are of organizations that have successfully undertaken digital engagement and transformation initiatives, the less resistant later adopters are likely to be. These examples have to come not just from the consumer space, but also in business-to-business enterprises, the public sector, higher education, non-profit organizations, and more. As we emerge from the economic doldrums we've been in for years, organizations with stronger appetites for risk will take chances and start to reap visible rewards. When they do, others will start to follow.
Your Thoughts on the Barriers to Digital Engagement?
What would you add to my list of barriers to digital engagement for organizations, their leaders, and other senior professionals? What other factors do you think are necessary to break those barriers down? I'd love to hear your thoughts.