Matrix Management

What digital can learn from international

airplane landingEvery day I see studies, blogs and reports on digital transformation. It’s exciting stuff and no doubt has the opportunity to be transformational. However, it’s not the first transformation businesses of been through and I think we can learn from previous ones.

There are particular parallels between digital and global transformations. A phrase I’ve used with several of my clients lately is “digital is the new international”.

Most organizations began by becoming strong in their home markets. The domestic market is the vast majority of their business and consumes most management time. As they start to export or to develop international sales organizations then international operations become more important that they tend not to get the time and attention they deserve and need because of the dominance of the legacy markets.

A common organizational response was to establish a “head of international operations”. This enabled organizational resources to be allocated ring-fenced to the support of international growth.

This also allowed the existing management population to stay focused in their comfort zone and on their traditional operations. For many of them it was difficult to give time to international issues that they maybe didn’t understand or undervalued relative to the big returns they could get from the existing business.

However, as international operations grew, these managers realized that they were missing out on big opportunities. Being associated with the growth of emerging markets often lead to faster career development and increased visibility with senior management.

Over time every function realized that they had an international dimension, people who were focused only on the home market were unlikely to reach the top.

Over time, the international role disappeared as international responsibilities became part of the normal operation of functions and business units. If a strong regional presence with required by the market by customers then regional geography continue to have a role at senior level. Very large countries such as China could also be represented at board level.

Digital seems to be going through a similar trend. The “head of digital” is responsible for all the new technology stuff that traditional managers may not understand. They may have heard the digital we have an impact on everything but has its outside their skill set and experience it’s easier to appoint someone to take care of this area.
Unfortunately, just as becoming an international company has an impact on many roles across the organization, so will digital. It’s hard to imagine any functional, business unit or geographic entity that won’t be impacted by digital transformation.

As a result, senior managers want to get left behind by the digital revolution. Those that choose not to play in this space will probably find that their careers are impacted in the future.

So, whilst digital may be a separate function in some organizations today, expect a power grab where the traditional structures pull digital responsibilities into their own areas of responsibility. In most cases, that’s where they probably belong, though there will be some need for coordination of technology platforms and expertise across the organization.

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