Choose Growth Over Stagnation
“Growth must be chosen again and again; fear must be overcome again and again.”
Abraham Maslow
Why quote a famous psychologist in an article on digital transformation? Because ultimately digital transformation is about profound organizational change. It’s about the psychology of humans and less about technical complexity. Change that has an enormous, career changing impact on many individuals. It is that fundamental change that will make some very determined to see those efforts fail. Few will do it directly; many will do it quietly and some will do nothing. This is why most organizations have not embarked on digital transformation projects. Transformation endeavors are, by their very nature, highly disruptive to not only processes and systems but more importantly people. Most individuals loathe change. Change brings fear of the unknown. It requires personal growth. It requires overcoming preconceived notions about the end result. Change is hard.
Not a day goes by when I don’t receive several emails from prominent management journals on Digital Transformation. Webinars, articles, classes you name it. A cottage industry is being built up around those two words. There is a long list of firms that will happily extract consulting dollars from your budget to tell you what the best approach is to getting your company into the 21st century. They will tell you what your organization should look like and what type of people you should hire. Beautiful decks with professionally designed graphics will be shared with management and most will agree that they should embark on modernizing systems, people and how everyone thinks to save the company from obsolescence. But few will tell you the brutal difficulty of a real digital transformation and recent advances in Generative AI (Gen AI) are accelerating change.
Most companies will fall far short of their goals when they start these transformation initiatives. We have all seen the grandiose goals that are articulated in presentations about how changes are going to make the organization perform better and there is truth in that. There is a big push to get the entire organization onboard. Lots of rah rah, group hugs and singing kumbaya. But then the reality of making the changes kicks in. The message rarely permeates to the employees on the line and is most responsible for executing those changes. Changes are decoupled from goals. Some managers are openly hostile to change especially when it will impact them. Gen AI, by its very nature, can easily be embraced by all levels of employees without input from management. Change is going to happen without it being managed unlike a traditional transformation project. Potentially highly disruptive change.
It’s difficult to have management take on the enormous risk required to make fundamental changes to how their division operates when there is significant fear of the unknown. I’ve seen this time and again but once managers reach a certain level of their career, they become highly risk averse. As long as their ‘area’ is performing reasonably well, making fundamental changes to operations, no matter how much sense changes may make, becomes very difficult. Rarely does a manager want to potentially sabotage their career to make changes when something is operating ‘OK’ even if those changes can bring about much greater success. And it is often those that are the most risk averse that have the institutional knowledge to bring about the greatest changes. They have the political connections, the wisdom of experience and failure and the temperament to bring change yet they don’t. But with wisdom and experience often comes far greater fear of risk and starting over again. Humans tend to like stability. But stability, in a highly dynamic world, is nothing but a false illusion. And as Maslow says growth must be chosen again and again and fear must be overcome again and again.
Organizations are like individuals, and some have a propensity for embracing constant dynamism and some stagnate. Short term success masks deep stagnation underneath. Stagnation that will eventually bring an organization to a point that limits its ability to respond to exogenous events. Profound change is often required for survival when an organization can least adapt to those changes. It is like training to run a marathon in sub three hours when you are getting rolled into the operating room for open heart surgery for a quadruple bypass because you neglected your body for decades. You figured if you were walking you were OK until some sudden external stress showed how weak your heart really was. Why push yourself if you never need to? Maybe, just maybe, you should have been taking care of yourself for years. Unfortunately for those that have spent years stagnating, Gen AI is going to force them to try and run that three hour marathon without having ever walked around the block. It is going to make evident how blocked those proverbial arteries are from years of not embracing change.
Having listened to many earnings calls I rarely find the questions particularly deep. Analysts are satisfied with quarterly earnings numbers and if those projections match theirs within reason everyone is happy. But when things go sideways everyone acts surprised. Success is defined as meeting quarterly numbers. High risk, high reward transformations when a company is seemingly performing well are not viewed positively.
But stagnation and rot occur over time and are often hidden from outsiders. Companies inadvertently reward complacency and make change extremely difficult. I don’t know many people that have lost their job for being caretakers of their area, but I do know plenty that were let go when they tried to make the right long-term decisions that involved significant changes. Few managers feel a sense of urgency about the future, and I must admit that I am utterly baffled by that. Business is changing faster than ever yet so many businesses just don’t see it. Technological change is happening faster than ever and yet so many continue to push back on it. We are going through a time of deep profound changes that are going to have a massive impact on ALL businesses. Not taking a long-term strategic view where some very difficult questions are asked is corporate suicide by a thousand cuts. Moreover, changes in social mores make it even more difficult to ask the hard questions lest individuals get offended. And in taking a hard look internally to make the organization more resilient will, by default, offend many. It shouldn’t but it does. Profit, resilience, and efficiency are taking a back seat to social issues at many companies. Managers should want to answer the brutally hard questions to make the organization more resilient, but they are forced to avoid them.
Transformation projects have always been difficult even in pre-digital times, but no organization should do them when survival matters. They should be done constantly. So how does an organization go about a digital transformation? One that revolutionizes every aspect of the business and embraces new methodologies such as AI/ML and the use of all data in decision making? Like the individual that is trying to make some massive change in their life before they are necessary (e.g. before they have a heart attack) to make those changes you must take a long, deep hard look at yourself.
Start taking a deep introspective look at your organization today before it is too late.
