Struggling with digital disruption, moving to the cloud, maybe even trying AI? Listen to Drucker. Go with the flow and try incremental change.
The late management guru, Peter Drucker is attributed with the quote: “Culture eats strategy for breakfast”. What does this mean? In a very practical sense: No matter what business strategy or strategic plan you try to implement with your team, its success and efficacy are going to be held back by the people implementing the plan. This is especially true when looking at digital and cloud strategies.
The digital/cloud hype is everywhere. The drumbeat is getting just brutal and you are not doing enough:
- “The digital economy will steamroll your business if you don’t adapt.”
- “In The Future You Are Either a Digital Business or a Dead Business.”
- “By 2021, 94 percent of workloads and compute instances will be processed by cloud data centers.”
Hold on a moment. You may not need radical change. Maybe your culture and organization aren’t ready for it. There are other ways and there is good news; unless you are in certain industries you may not have to overturn your entire shop. You can take it slowly. It’s time for some perspective and balance.
Believe it or not, the odds are on your side. Sure, certain businesses seem to be consumed by digitization and cloud but it’s more than likely that your industry is not. Most of the economy is relatively immature when it comes to digitization. And the cloud – while growing wildly – is still only a drop in the bucket of all IT spending. Take a look at this McKinsey study that measures U.S. industries by their digital maturity and growth. The sizes of the bubbles represent the industries’ relative share of total GDP.
Most of the American economy is digitally immature. Why should this be so? It’s because most industries are fairly conservative due to the massive long-term capital investments (e.g. manufacturing and mining); or the consequences of performance failures (e.g. healthcare or government) or both (e.g. utilities).
Digital transformation and moving to the cloud is hard enough just technologically. Legacy systems – often the backbone of your shop – are notoriously difficult candidates. Now add to that getting people to change the way they have done things for years takes even more effort.
Ask yourself: Do you have the talent to undertake a digital transformation? How about expertise in cloud computing? Surveys show there is a big skill gap and it is a real barrier to success. How about your management processes and organizational structure? Does it encourage lots of experimentation and quick decision-making? Is it very flat with little hierarchy?
Consider instead making incremental changes that take advantage of some of the innovative tools and techniques that have emerged. But do it without tearing apart your culture. You can confine the risk, minimize the expense and raise your chance of success. Maybe you should just modernize a system but keep the people processes and structure the same. Or, think about substituting a new technology for the way you are doing it now.
Let’s say you are in a utility: How about drones for inspecting pipelines and power lines? Or maybe you are a manufacturer: Maybe try 3D printing (additive manufacturing) for certain parts to be used in manufacturing. What if you are in healthcare? What kind of small incremental change could you try? One doctor came up with a way to use the iPhone to give eye examinations in the field.
The increasing digitization of almost everything we do is coming but it will not happen overnight. We forget how long it takes for new technologies to actually percolate through a society. Don’t be fooled by exaggerated claims like how fast smartphones were adopted. Remember they were built on the development of mobile phones, the internet, email, search and a whole host of technologies that took decades to mature.
Now that you have taken a deep breath which modernization or new technology will you try?