Obsession with digital replaces obsession with structure – both miss the point

“Digital” is receiving a huge amount of attention at the moment, quite rightly given the accelerating pace of automation and integration of businesses is. Digital is a great opportunity or threat depending on your perspective.

However, in the context of leading real change, an over-focus on systems and IT risks making the same mistakes that an over reliance on structural change has led to over the last 20 years.

True transformational change flows from the successful management of systematic change in strategy, structure, systems and skills – the 4Ss.

In the last 20 years organisations have focused on structural change – matrix organisations in particular. At the same time, they have invested hugely in enterprise wide systems such as SAP. Despite this they have struggled to achieve the hierarchically flat, silo busting, horizontal way of working that a truly integrated and connected organisation requires

We believe that this is largely because they have not addressed their culture and way of working. You don’t get more flexibility by adding more reporting lines or more monolithic systems.

Today the promise is digital (which means very different things to the different organisations we are talking to) and the focus is on technology, either to introduce whole new business models or to radically improve the capabilities of existing ones.

Research is already showing that successful digital transformation relies on twin strands of both technology and management going hand in hand.

However, again, it is likely that skills, culture and ways of working will be the poor relation. In managing change, it is clear to us that the technology will not be the limitation. It is outmoded corporate culture, hierarchical and controlling management structures and siloed ways of working that will take the most time to overcome – just as they still do in matrix implementations.

If you can’t make your matrix work, you are probably not ready for digital yet!

The cultural and behavioral underpinnings of a successful matrix or digital transformation are very similar. Neither structure nor digital technology alone can overcome a dysfunctional culture or way of working.

As Euan Semple recently tweeted “companies find it easier to digitize their dysfunctions than deal with them”. Your corporate culture will shape your matrix or digital transformation, if you don’t fix your corporate culture, digital will either break it or lock it in by automating your existing dysfunctions.