Digital déjà vu
Digital transformation - rhetoric and reality
“Those who cannot remember the past are condemned to repeat it.” — George Santayana 1
Back in 1990, I’d been helping organisations throughout Europe, Asia and the US create future-fit cultures of innovation, agility, and adaptiveness for just a handful of years when the Business Process Reengineering (BPR) wave swept in.
As usual, all the big consulting firms jumped on the bandwagon, but the limelight was mainly on one man — Michael Hammer, President of Hammer & Company.
Hammer had previously been a tenured professor of computer science at MIT.
Then he wrote an article for Harvard Business Review (HBR) with the catchy title: “Reengineering Work: Don’t Automate, Obliterate” that propelled him to consulting superstardom. 2
BPR exemplified the traditional US management consulting approach in its response to Japanese firms challenging the status quo. 3
Comparing the two countries, Hammer claimed: “They develop products twice as fast, utilize assets eight times more productively, respond to customers ten times faster”. 4
He asserted that a massive transformation involving hordes of external consultants was the only solution:
“At the heart of reengineering is the notion of discontinuous thinking — of recognizing and breaking away from the outdated rules and fundamental assumptions that underlie operations. Unless we change these rules, we are merely rearranging the deck chairs on the Titanic. We cannot achieve breakthroughs in performance by cutting fat or automating existing processes. Rather, we must challenge old assumptions and shed the old rules that made the business underperform in the first place.” 5
He asks, rhetorically, “So why did we design inefficient processes?”:
“In a way, we didn’t. Many of our procedures were not designed at all; they just happened. The company founder one day recognized that he didn’t have time to handle a chore, so he delegated it to Smith. Smith improvised. Time passed, the business grew, and Smith hired his entire clan to help him cope with the work volume. They all improvised. Each day brought new challenges and special cases, and the staff adjusted its work accordingly. The hodgepodge of special cases and quick fixes was passed from one generation of workers to the next.” 6
Hammer claimed these “improvisations” led inexorably to inefficiency, which BPR would eliminate once and for all.
Unfortunately, his philosophy overlooked three things:
Many “improvisations” embodied ways of working developed in interaction with customers. Stripping them out and replacing them with reengineered processes — designed by consultants — may have sped things up, but at what cost to the customer experience?
When outside “experts” reengineer work processes, it prevents people in the organisation from building their own value creation muscles. This undermines autonomy, curtails competence, and restricts relatedness — the three essential elements of intrinsic motivation. 7
What organisations do today is not what they need to do tomorrow. So, even if reengineered processes might yield greater short term efficiency, pouring IT concrete around them impedes long term adaptiveness.
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Hammer further asserted that:
“Of the business processes that were designed, most [were designed] to check overambitious growth — much as the typewriter keyboard was designed to slow typists who would otherwise jam the keys. It is no accident that organizations stifle innovation and creativity. That’s what they were designed to do.” 8
There is of course an obvious irony to that claim — because having outside consultants impose reengineered work processes is guaranteed to destroy people’s intrinsic motivation — which is the very lifeblood of innovation and creativity…
Hammer then ramps up the rhetoric in his final section, ominously titled “THINK BIG”:
“Reengineering triggers changes of many kinds, not just of the business process itself. Job designs, organizational structures, management systems—anything associated with the process—must be refashioned in an integrated way. In other words, reengineering is a tremendous effort that mandates change in many areas of the organization”. 9
Just reading that paragraph you can see the dollar signs spinning in the eyes of consulting firm partners everywhere.
But how might they justify the cost of such a “tremendous effort” to “refashion everything in an integrated way”..?
Could the prodigious price tag be sold in terms of saving clients money overall..?
Hammer approaches the answer:
“Big, traditional organizations aren’t necessarily dinosaurs doomed to extinction, but they are burdened with layers of unproductive overhead and armies of unproductive workers. Shedding them a layer at a time will not be good enough to stand up against sleek startups or streamlined Japanese companies. US companies need fast change and dramatic improvements.” 10
And finally, he hammers home his main money making message:
“We must have the boldness to imagine taking 78 days out of an 80-day turnaround time, cutting 75% of overhead, and eliminating 80% of errors. These are not unrealistic goals. If managers have the vision, reengineering will provide a way.” 11
“Reengineering will provide a way” — a way to dispense with all that “unproductive overhead” and all those “unproductive workers”.
Small surprise that within a few years, “BPR” was widely recognised as “Big People Reductions”.
Six years after the tsunami started sweeping the organisational landscape, it was clear that BPR ripped the human heart and soul out of organisations, with Hammer himself eventually confessing to The Wall Street Journal:
“I was reflecting my engineering background and was insufficiently appreciative of the human dimension. I’ve learned that’s critical.” 12
Digital Transformation
So here we are, 30 years on.
BPR is but a distant memory.
And Digital Transformation is the shiny new panacea promising to propel organisations into a fabulous future filled with sparkly new goodness.
But what is it exactly..?
According to CIO Magazine, Digital Transformation is: 13
a necessary disruption
a foundational change in how an organization delivers value to its customers
a key strategic initiative
a catchall term for describing the implementation of new technologies, talent, and processes to improve business operations and satisfy customers.
In other words, Digital Transformation is important, big, strategic, foundational, disruptive, and naturally enough, expensive.
So how will vendors justify the cost to clients?
Will they persuade them that their technology will help create and sustain a future-fit culture of innovation, agility, and adaptiveness, so the organisation can thrive in our increasingly uncertain and unpredictable world?
Or will they simply reach for the old BPR playbook, and justify the cost through big people reductions?
Imagine for a moment that you’re an IT vendor — sorry, I mean a “digital transformation solutions provider” — looking to ride the wave…
Do you, either:
Educate senior executive buyers into how they can create a future-fit culture; help them persuade their senior executive colleagues that such a culture change is vital; help them credibly demonstrate how and why your technology is a wise investment that will support the culture change; help them bring onboard, or alternatively sideline, any of their more traditional senior executive colleagues who prefer the perks and privileges of positional power, etc; or:
Go straight to the Finance Director with a spreadsheet showing how your technology can get rid of 10, 20, 50, or 100 people — all for a price tag much lower than the headcount cost savings..?
How many IT vendors will be able to resist the lure of Option 2 as the much easier sell?
And, for all the hope and hype about Option 1, Option 2 is what seems to be happening.
Take, for example, the experience of a close family member here in the UK, who recently received a Penalty Charge Notice (PCN) for allegedly driving their car in a bus lane, in a town they’d never visited. 14
The PCN demanded online payment of a fine, to be doubled if not paid within 14 days.
The digital image of the alleged offence on the PCN clearly showed a large panel truck with a different registration number to the family member’s small compact car.
In the past, this mix up would have been quickly resolved with a simple phone call.
But the local council who issued the PCN has a digitally transformed process, devoid of human intelligence, involving a tortuous online experience that forces users through a rigid pathway via, after the usual identity checks, a dozen or so sequential and in this case completely irrelevant statements:
“I understand that using the bus lane to drop my kids off at school is not a valid reason to have this PCN cancelled”.
“I understand that using the bus lane to stop at a local shop is not a valid reason to have this PCN cancelled”.
“I understand that using the bus lane to avoid being abducted by aliens is not a valid reason to have this PCN cancelled”. 15
“I understand that <another excuse someone has tried in the past> is not a valid reason to have this PCN cancelled”.
etc.
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Each step required trawling through a drop down menu, ticking “I confirm I am not seeking to have the PCN cancelled for this reason” before moving on, sequentially, one by one, through each of the remaining irritatingly irrelevant items.
Only after spending ages navigating this labyrinthine digital maze of dross did the call eventually get put through to a human operator.
Of course, the call didn’t go through straight away, but only after another lifetime listening to the looped recorded message: “All our operators are currently busy assisting other customers, please be patient, your call is important to us”.
Just obviously not important enough to actually have someone answer it.
Eventually, after a long wait, a human being picked up the phone and quickly confirmed that yes, the bus lane camera did indeed capture an image of a vastly different type, make, and model of vehicle with a different registration number.
Great — success at last..!
Hold on — not so fast…
The human operator couldn’t actually cancel the PCN.
They could only confirm that they would now pass it on to another department that dealt with these matters…
And, to add an ironic dose of insult to injury, a reply could be expected within 56 days — despite the warning in the original PCN that the fine doubled after 14 days…
As it turned out, it only took about three weeks for a confirmation letter to arrive, saying: “The matter has been considered and as a result it is considered that there are sufficient grounds for the notice to be cancelled. No further action will be taken.”
Note that it didn’t say: “We sincerely apologise that our terribly badly designed and wholly inadequately implemented digitally transformed dog’s breakfast of a system put you through all this unnecessary rigmarole — despite the blindingly obvious fact that it wasn’t even your vehicle”.
“No further action will be taken” — welcome to the world of the digitally transformed apology.
The family member involved is no shrinking violet, but found it hard not to feel guilty, even though they’d done nothing wrong.
Someone less robust might have found the whole experience much more distressing.
But it’s cost-effective for the council issuing the PCN because all the work involved in rectifying the problem falls on the shoulders of the innocent victim, not on the nameless numpties who bought and implemented the dumb-as-a-doorpost digital transformation.
I could go on.
About the online bank where I couldn’t change a beneficiary name, five days after a bot, and then three different human customer service representatives, each promised I’d be able to do it online “the following day”.
About the session on another banking site where “Dot the Bot” took two days to return an “answer” — “It could be a problem with your internet connection.” Sorry Dot, but it was Not.
About the customer who had a new bank card sent to their former home address, even though the bank had his new address on its system, but the bank couldn’t take any action to investigate what had happened to prevent future occurrences unless he filed a formal complaint. When he agreed to do so — in the interest of helping the bank improve its security — he was offered a £20 bribe if he’d drop the complaint instead… 16
About the ubiquitous “customer satisfaction” forms we’re increasingly coerced, cajoled, or co-opted into completing, so someone can demonstrate the system is working — even if, as far as the customer is concerned, it’s clearly not…
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Are “digital solutions” deliberately designed to make it difficult to get issues resolved, so the average user with a life to get on with will pay up, shut up, or give up?
What about the cost to the customer experience?
And what would happen if a competitor actually did provide a genuinely better one?
Hacking human weaknesses
The examples above are troubling enough, but they’re nothing compared to the shenanigans of the superpowers of digital transformation — social media platforms.
In his 2019 testimony to the US Senate Commerce Subcommittee on Communications, Technology, Innovation, and the Internet, former Google ethicist Tristan Harris pointed out that: 17
While we were worrying about the point at which digital technology’s asymmetric power would overwhelm human strengths and take over our jobs, we missed this earlier point when technology hacks human weaknesses — which is all it takes to gain control.
At Google, Harris was concerned with how to ethically wield influence over two billion people’s thoughts — because in an attention economy, there’s only so much attention — and the advertising driven business model always wants more. So, the competition between different platforms becomes a race to the bottom of the brain stem. 18
As attention gets more competitive, social media algorithms go deeper down the brainstem to your identity — to get you addicted to attention from other people. By adding the numbers of followers and likes, technology hacks social validation, so people become obsessed with constant feedback from others.
The growing asymmetry between the power of technology and human weaknesses is influencing more and more of society. This leads to a compounding system of “human downgrading” in which we’re increasingly unable to create shared agendas to solve the world’s urgent problems — due to reduced attention spans and diminished capacity for complexity and nuance.
As part of his testimony, Harris was asked whether social media companies have a social responsibility to design technology for consumers’ digital wellbeing?
He said yes, they absolutely do have that responsibility:
“More than do no harm, technology platforms should have a responsibility to get clear about the goods they aim to achieve, while avoiding the many harms and externalities to mental health, civic health and the social fabric. There is a precedent for this kind of responsibility. The asymmetry between technology’s power over those it impacts is comparable to that of a lawyer, doctor or psychotherapist. These occupations are governed under fiduciary law, due to the level of compromising and vulnerable information they hold over their clients. Because the level of compromising information technology platforms hold over their users exceeds that asymmetry, they should also be governed under fiduciary law. This would make their advertising and behavior modification business model illegal, much like it would be illegal for a doctor, psychotherapist or lawyer to operate under a business model of extracting as much value from their clients by manipulating them into outcomes only possible because of their knowledge of their clients’ vulnerabilities.” 19
Harris cited the following as examples of YouTube’s “algorithmic extremism” designed to trigger strong emotions “lower down the brain stem”:
Teen girls that played “diet” videos were recommended anorexia videos.
Viewers of NASA Moon landing videos were recommended “Flat Earth” conspiracies hundreds of millions of times.
Conspiracy theorist Alex Jones’ InfoWars videos were recommended 15 billion times — more than the total combined traffic of New York Times, Guardian, Washington Post and Fox News.
RussiaToday was most recommended of 1,000+ channels following the Mueller report into Russian interference in the 2016 US election.
Adults watching sexual content were recommended videos that increasingly featured young women, then girls, then children playing in bathing suits. 20
Fake news spreads six times faster than real news — it evolves to confirm existing beliefs whereas real news is more constrained by what’s true. 21
In a chilling summary, Harris concluded that:
“There’s a popular conspiracy theory that Facebook listens to your microphone, because the thing you were just talking about with your friend just showed up in your news feed. But forensics show they don’t listen. More creepy: they don’t have to, because they can wake up one of their 2.3 billion avatar, voodoo dolls of you to accurately predict the conversations you’re most likely to have.
This will only get worse.
Already, platforms are easily able to:
Predict whether you are lonely or suffer from low self-esteem
Predict your big 5 personality traits with your temporal usage patterns alone
Predict when you’re about to get into a relationship
Predict your sexuality before you know it yourself
Predict which videos will keep you watching…”
“Put together, Facebook or Google are like a priest in a confession booth who listens to two billion people’s confessions, but whose only business model is to shape and control what those two billion people do while being paid by a third party.
Worse, the priest has a supercomputer calculating patterns between two billion people’s confessions, so they can predict what confessions you’re going to make, before you know you’re going to make them — and sell access to the confession booth”. 22
Putting the technology cart before the culture horse
I’ve written previously about how future-fit cultures of innovation, agility, and adaptiveness emerge only when learning based on 2D3D mindsets is alive in an organisation — expanding understanding, skills, perspectives and relatedness through iterative sense making, decision making and action taking. 23
Such a culture develops the organisation whilst, at the same time, delivering new value to society, as contributions to sustainable widely shared prosperity, measured in terms of human flourishing and wellbeing.
When senior executives genuinely focus on creating the conditions for such cultures to emerge, “digital solution providers” will follow suit — shifting their focus to providing technology that makes them money by supporting the wants and needs of such clients.
Until then, they’ll continue to provide technology that makes them money in the old way — justified by financial cost savings, largely through headcount reduction.
The bottom line: You need to put your culture in order before you place orders for technology — or any digital transformation will simply pour concrete around your organisation, locking it into the past and preventing it from creating a viable future.
Questions for reflection
What digital transformation activities are going on in your organisation already?
Who bought them, and how have they been sold by the solution provider — on cost reduction, or on creating a future-fit culture of innovation, agility, and adaptiveness?
What metrics are being used to evaluate the progress of digital transformation?
What percentage of the people actively driving — not just peripherally involved in — the digital transformation process are people within the organisation as opposed to external consultants?
George Santayana The Life of Reason: The Phases of Human Progress (1905-1906) Vol. I, Reason in Common Sense.
I wrote in more detail about how the Japanese embrace of TQM challenged Western firms and changed Western notions of Quality — and how something similar is required in HR, in this previous article.
Ibid — Don’t Automate, Obliterate p3 (p104 in the full HBR July-August 1990 magazine).
Ibid — Don’t Automate, Obliterate p4.
Ibid — Don’t Automate, Obliterate p6.
I’ve written previously about the vital importance of these three essential components in motivation, engagement and commitment here.
Ibid — Don’t Automate, Obliterate p6.
Ibid — Don’t Automate, Obliterate p8.
Ibid — Don’t Automate, Obliterate p8.
Ibid — Don’t Automate, Obliterate p8.
Wall Street Journal 26 November 1996 - cited in The Manufacturer 13 November 2009.
UK Government website page on Penalty Charge Notices for parking and other motoring offences.
OK — I admit it, I made this one up.
“Optimizing for Engagement: Understanding the Use of Persuasive Technology on Internet Platforms” June 25, 2019 — Senate Committee online documentation.
In other words, a race to trigger baser human emotions such as fear, anger, and disgust.
In this piece The Boats in Boston Harbor.