The Search for Clarity

Digital Transformation: Has the apple fallen far from the tree?

January 20, 2021 Season 1 Episode 1
Digital Transformation: Has the apple fallen far from the tree?
The Search for Clarity
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The Search for Clarity
Digital Transformation: Has the apple fallen far from the tree?
Jan 20, 2021 Season 1 Episode 1

Discover the keys to digital transformation success with the Didier Bonnet, a key thought leader who has been one of the cornerstones to digital transformation thinking. We're not just brushing the surface; we go deep into how the digital revolution reshapes established companies, right down to their core. From the eye-opening insights in Didier's book "Leading Digital", we peel back layers of digital mastery that are driving businesses forward in this compelling technological era.

Embark on a journey that challenges the status quo of digital transformation. Together with Didier, we scrutinise the misconceptions and oversimplified definitions that overrun the tech world, forging a path for leaders to follow. It's about more than just adopting new tech—it's a call to foster digital leadership and craft strategies that resonate with your customers. We address the inevitable growing pains companies face, from reskilling employees to managing customer expectations, and lay out a roadmap to navigate this complex landscape.

Wrapping up with a strategic masterclass, our discussion with Didier emphasises the importance of phased, intentional action. By dissecting the pillars of digital longevity, we provide you with a blueprint for integrating transformative technologies like AI and IoT into your business, without falling prey to fads. Join us on this digital transformation odyssey while we search for clarity.

The Search for Clarity:
Youtube Channel: https://youtube.com/@thesearchforclarity?si=ISQgIOAojPJIxMOf

Executive & Leadership Coaching with Richard: www.coachingwithrichard.co.uk

Show Notes Transcript Chapter Markers

Discover the keys to digital transformation success with the Didier Bonnet, a key thought leader who has been one of the cornerstones to digital transformation thinking. We're not just brushing the surface; we go deep into how the digital revolution reshapes established companies, right down to their core. From the eye-opening insights in Didier's book "Leading Digital", we peel back layers of digital mastery that are driving businesses forward in this compelling technological era.

Embark on a journey that challenges the status quo of digital transformation. Together with Didier, we scrutinise the misconceptions and oversimplified definitions that overrun the tech world, forging a path for leaders to follow. It's about more than just adopting new tech—it's a call to foster digital leadership and craft strategies that resonate with your customers. We address the inevitable growing pains companies face, from reskilling employees to managing customer expectations, and lay out a roadmap to navigate this complex landscape.

Wrapping up with a strategic masterclass, our discussion with Didier emphasises the importance of phased, intentional action. By dissecting the pillars of digital longevity, we provide you with a blueprint for integrating transformative technologies like AI and IoT into your business, without falling prey to fads. Join us on this digital transformation odyssey while we search for clarity.

The Search for Clarity:
Youtube Channel: https://youtube.com/@thesearchforclarity?si=ISQgIOAojPJIxMOf

Executive & Leadership Coaching with Richard: www.coachingwithrichard.co.uk

Richard de Kock:

Welcome to the Search for Clarity, the Digital Strategy and Management Podcast, with your host, Richard de Kock. A very big and warm welcome to the Search for Clarity podcast. I'm Richard de Kock, and today we will be joined by the incredible Didier Bonnet, one of the original researchers and authors on digital transformation, to find out just how far the apple has fallen from the tree. Didier's research and authoring on the topic of digital transformation dates back to just before 2011, but he's probably more well known for his work as a contributing author on the book Leading Digital, which was published in 2014. He's been rated 11th in the top 50 business strategy thought leaders by Thinker360. He has a PhD from Oxford University in England and he's currently a professor of strategy and digital transformation at IMD Business School in London. Not only that, but he's also currently an executive vice president at CapGemini Invent. So we are ideally speaking to one of the central thought leaders and sources of information for digital transformation, and we're really lucky that we had Didier join us today.

Richard de Kock:

Right before we begin, though, it's important for me to let you know that I'm a full-time Microsoft employee and that this podcast is independent and it is in no way associated with Microsoft. The thoughts and ideas shared by myself and all my guests on the search for clarity are our own and in no way associated to Microsoft's business services or practices. And with that, let's enjoy the podcast, right? So, de Deer, thank you so much for joining us and sharing your expertise and your experience on this really important topic that's been emerging for the last decade, and so the big topic today is digital transformation.

Richard de Kock:

Did the apple fall? Far from the tree? And it's a really important topic and one close to my heart, because, when I've been working on it for the last few years, I think it's been interesting to see the different directions that this topic has grown. Now, when I first met with Didier, I got this beautiful backdrop of an office, a very modern library in the back and at the centerpiece, embedded in the middle of the library, was this Fender Stratto cast a guitar On the far right of the room. Beautiful classic guitar. Didier, are you a musician?

Didier Bonnet:

Yes, I love music and I wouldn't say that I'm a guitarist. I actually play drums mainly, but I do have a little practice guitar and my son is really the guitarist in the house, so he actually owns most of these guitars all of them.

Richard de Kock:

I suppose it would be a bit difficult putting the drum set as the centerpiece to the library Exactly the drum set is not very practical in an office.

Didier Bonnet:

Unfortunately, not practical at all according to my wife. Who's your favorite musician? Oh, I've got very eclectic taste, from jazz to rock and all sorts, but I wasn't still a great fan of Led Zeppelin.

Richard de Kock:

Wonderful.

Didier Bonnet:

It's a band that I really treasure.

Richard de Kock:

Right. So, de Deer, you've published more than 13 critically acclaimed publications on digital transformation since 2011,. And these weren't small. These were published through MIT, sloan, cap Gemini, harvard Business Review, and then there's the major publication itself, leading Digital Turning Technology into Business Transformation, which you wrote with George Westerman and Andrew McAfee. Now, since 2014, you've now written well, I'd say at the end of last year, 2020, a refresher paper with George called the New Elements of Digital Transformation, which reviews where you are six years after the initial publication in 2014. Could you tell us about your earlier research into digital transformation, namely, what drew you to the research originally and how did you get involved with Leading Digital and other key related publications?

Didier Bonnet:

Okay, so maybe just by way of background, I used to work a lot and run the practice for telecom, media and entertainment within Cap Gemini Consulting and that really when I was working there, I saw really what happens to the music industry, to the publication industry, publishing industry and to a number of other industries that were really being tremendously disrupted. At the time I guess disruption wasn't as common as it is today, but we really saw fundamental changes in the way that the product and the services were being distributed, priced and consumed to some extent by customers. So that led me to believe that and this is around the late 2000,. That led me to really think through wow, my God, if that spreads into other sectors, we are going to see some pretty fundamental changes in the way industries are actually organized and competition is being deployed. So I moved out of telecom and media and really start focusing across sectors in trying to look at what those digital technologies could do to pretty traditional industries like banking, insurance, manufacturing, retail and so on and so forth. And at that time I started working with the MIT to really try to. We were trying to do really two things. One is you know this is back in 2009,.

Didier Bonnet:

Digital transformation was not a word that was used commonly as it is today, so it wasn't like the thing it is today. So we were really trying to sort of put some flesh around you know what does it actually mean and how does it actually work and then really focus on really the large traditional organization. And our thinking at the time was you know, we've now learned a lot about publishing, telecom, music technology companies, but no one is really focusing on the large traditional companies that have got sometimes hundreds of years of existence and, as you know, very large. You know existing legacy system processes and ways of operating and we're really trying to say, ok. The exam question was really simple. It says you know, are there in this wide world any companies that are using digital technology to really fundamentally change their operations and, if yes, what it is that they're doing different?

Richard de Kock:

Yeah, because I think everyone, yeah, everyone seems to think, when you mentioned digital transformation, that it's really the, or digital mastery is really the small, smaller companies that have, you know, like the, that have sort of been able to quickly unlock that. And when I've get asked very often from large organizations, yeah, but that doesn't really apply to us because we're so big, but to your point that's, that's not the case.

Didier Bonnet:

Yeah, exactly, and that was really our focus. I mean, you know we love startups and all the tech companies, but we're really trying to put the emphasis on the other side, where really transformation is a very complex exercise. If you've been in operation for 150 years and you're covering 28 countries, you know it just means something very, very different in terms of capability, skill set and how you actually approach that. So that's, that's, that was really the focus at the at the outset and, of course, after.

Didier Bonnet:

What we ended up with was this framework, that that it was captured in the book leading digital, which is really tried to say okay, there are two parts to that. One is, obviously, if you're going to do digital transformation, you need to invest smartly in digital technology to sort of influence your, the way you connect with your customers, or the efficiency of your operations of, or how you, you, you collaborate with your employees. But it but there was a second. You know, if that were the only dimension, then the richest company of the one with more capital will always win, and this is not what we found in our research. So there was another dimension that was equally important, which is the sort of what we call the digital leadership capabilities, which is really around. How do you actually affect change inside your organization? I think, introduced these kind of technologies and the two dimensions are at minimum, equally important. And I would even say you know, with hindsight of a decade of digital transformation, that the the softer side, the leadership side, is actually more important.

Richard de Kock:

I would agree with that, and so I'm not sure if you're aware of this, but I noticed when I was doing my research on the topic that when leading digital was published in 2014, a few months later, the search keywords for digital transformation and digital strategy on your browsers shot through the roof and are still climbing to this day, but excessively like a significant explosion of growth, and I'd always hypothesize that leading digital was, by and large, the catalyst in the establishment of digital transformation as we know it today. What do you believe is the key element about the original research that would have sparked this revolution, and what do you really feel created the burning platform that sparked the attention that it got?

Didier Bonnet:

Well, so, so, yes, and so I've seen those numbers on. Whether you look at Google search or anything else, you'll see a massive increase in the search and utilization of the word to the point where today it's become like a virtually full quiz them.

Didier Bonnet:

You know, everyone is likely. You know, if you, if you, you don't have a single annual reports without the mention of digital transformation. I'd love to think that you know it's because of our book, that's the term shot ahead, but I don't have the data to prove that I think, I think we can do that, but it's just, it is okay.

Didier Bonnet:

So it makes me, makes me and my colleague happy. No, I think what happened is people suddenly realize, I think what we, what we were trying to do, is really to, to you know, look at a very practical managerial way of saying, hey, this is, this is something that's really important. That's going to radically change a number of ways that industry behave, but also ways about how you actually manage your corporation, and try to really put a framework for senior executives to start thinking through. Okay, what would it mean for me in retail in the UK or in Japan or in China? You know what are the implications and what are the levers that we can actually play around with.

Didier Bonnet:

That are important because, remember, at the same time, the nature of consumers, consumer behavior, but also consumption was changing. Yeah, consumers being, you know, we're all equipped with incredible amount of computing power in our pockets but also consumption. Like you know, we saw the gig economy appearing. We saw, you know, network sharing, for instance, and things like that, which was really fundamentally changing the nature of demand as well. So it was just not a transformation from the supply side, but also from the demand side.

Richard de Kock:

Yeah, I mean one of the big. I think one of the big drivers of the big burning platforms that I picked up on was that master digital masters are 26% more profitable than their average industry competitors, that they were generating about 9% more revenue from existing physical capacity and drive more efficiency in their existing products and services. I would have thought that would also have been quite an ear prick for many executives, especially ones that started to see the disruption occurring from the smaller companies. That was something that really caught my attention when reading through the publication.

Didier Bonnet:

Yeah, yeah, yeah, so we're. You know, one of the questions that was immediately asked by a lot of clients and industry observers when we came up with the framework is okay, this is all very well, we all want to be digital masters, but, you know, do we make more money, which is a totally fair question and also a very difficult one. So, and at the time, if you remember, you know, most of the studies and research that was done was very declarative. So, you know, you go to see somebody and say you know you've done a digital transformation, your customer experience, did you get any benefit? And it was very rare that people would say no, because they were usually in charge of these programs Absolutely, so it was slightly subjective as a measure.

Didier Bonnet:

So what we did is use our maturity framework to actually go back into our sample of around 400 industry and try to look at the maturity on one side and then try to measure the financial impact through published data so actual data from published financials and the two effects that we found were the two you mentioned. So the first one was really, the more you invested in digital technology, the more you had efficiency in your sales, if you will, and logically, that makes sense because if you think about, at the time where I take retailers, for instance, launching e-commerce platforms, you're kind of increasing the reach to your consumer without fundamentally increasing the asset base. You do a little bit, but it's marginal.

Didier Bonnet:

So that was the first effect, but, if you notice, it was very single digits, so it was not dramatic. What was really more dramatic was the impact on profitability. And when we look through, why would that be? And it was really all around the notion that, you know, at the time, if you remember, a lot of executives were saying this is great, we're going to do loads of pilots, we're going to do loads of experiments all over the place. And what that showed that was the need to have a coordinated approach to these kind of transformations. So in other words, that the old strategy of saying let a salesman flower bloom and you know we'll pick up what works and scale it actually didn't work. What you ended up with is the salesman disconnected flower.

Didier Bonnet:

So it needed to really have some coordinated and we make that point very strongly in the book.

Didier Bonnet:

You know it's top down driven. It doesn't mean that you don't have bottom up effects, but it needs to have a sort of a top down driven type of approach and it needs to be coordinated in a governance kind of way, because digital transformation cuts right across the sort of traditional silos that we've created in organization. Silos could be functions, could be departments, could be geographies and so on and so forth, and you do need to sort of to some extent using a crude word paper over the cracks of our traditional organization for a governance system that allows you to really drive the best application and scaling. And even today, when I work with clients, what I see is a lot of the mistakes are still this notion of not being able to coordinate and scale the successes to any significant advantage. So you have companies having dozens of pilots running around the place but never managing to actually scale any of them, which is unfortunate because, as you know, the ROI and the business case is really on the scale part, not on the experimentation.

Richard de Kock:

Well, yeah, I think system theory also suggests that just changing the elements of a system isn't going to give you the transformation you're looking for.

Didier Bonnet:

It needs to be the much sort of meta layer, and I guess that's where your leadership capability comes in, to really start driving that growth and that scalability of any of those initiatives Exactly exactly and I think it also shows the you know, as you mentioned, the complexity of the system, because you know, at the same time and this is one of the big change that we've seen, and this is why, you know, we've updated a little bit our views is the importance of employees, the people in that process.

Didier Bonnet:

You know, and I would say that our, if there was something we under emphasized in the first research and in the book was the question of people, capabilities, skills, you know, collaboration, which has really come to the fore because, at the end of the day, everyone, you know, now that we have nearly a decade or a decade of experience, you can see that where people are struggling is not in acquiring the technology, it's actually in making people change the way they work, and that really is. That's why we've emphasized this employee experience dimension in the new model, because to me, that's become one of the biggest limitation, to be honest.

Richard de Kock:

So now it's six years later since the original publication in 2014,. When I say the original, of course I'm talking about the big one. One would expect. A lot has changed since the original work, and I think 2020 is testament to that in a very large way. But what prompted you in George, to revisit your original work?

Didier Bonnet:

So two things I mean. One was the. You know, we were very conscious that it's always beyond just the framework, which is actually today remarkably stable. I mean, you know, I would still the question would be you know, what would you write differently if you had to rewrite the book or whatever? Actually, the framework still is totally applicable. So the components of governance that I mentioned, customer experience, the operation I do mention. I did mention that, you know, the employee side is and the people side is much more important than we anticipated.

Didier Bonnet:

But I think what prompted us was, you know it's in a technology field where it moves that fast we were saying, wow, you know, six years of digital transformation is like a hundred years of organizational movement, you know it's like. I mean, if you remember, in the original book we kind of eluded in some chapters to artificial intelligence, but it certainly wasn't what it is today in terms of at least managerial focus. And you know, whether it's over-hyped or not is another question, but it is, you know. So these kind of things where we're being driven, we got a lot smarter in analytics generally, you know, cooperation were really advancing, their understanding of how customer were behaving digitally. So we've seen a lot of these progress. You know, we've had everyone pretty much being trained in agile design thinking and all this kind of stuff that were really our assumption was really, you know, we must have made huge progress somewhere and we have, and we have we being, you know, large corporations. But we were sort of trying to understand. So that was what really prompted from our side was to say, wow, you know, it could be that there's been some massive changes in the field of digital transformation.

Didier Bonnet:

The second one was really because the first article we published in SMR was reasonably successful and Sloan was actually asking us to say, you know, you guys should do an update and really see what happens.

Didier Bonnet:

So it forced us to really look at the individual components of what we'd say back in 2014 and really rethink okay, what has really fundamentally changed? And, as you can see from the paper, I would say masses of changes in the technology side, because we have much more connected products, systems and everything else. We have much more, I would say, maturity in the customer behavior on digital platforms. We have business models that we're. We've made huge progress in understanding these famous digital platforms, particularly multi-sided platforms, and how they work. So we have made huge progress in trying to understand all of this, but I would say the fundamental structure of what matters, you know business model, customer experience, operation, employee experience and digital platforms that actually allow you and enable you to do all that. I haven't really changed that much. I mean, the components are roughly the same. It's more in the individual components that we've seen masses of progress being made.

Richard de Kock:

So, since the first research publication, I'm sure you've seen many companies trailing the way in adoption on the notion of digital transformation, and I think something that possibly would have been very entertaining is seeing a lot of vendors and consulting firms coming up with their own proprietary frameworks and a plethora of good authors writing on the topic itself. In terms of interpretation of the original work and the way it was adopted, where, would you say, the biggest gap in understanding has been or, if we put it another way, what has been the biggest inhibitor to companies succeeding with digital transformation in your view?

Didier Bonnet:

So I still think the people are.

Didier Bonnet:

So I put it two ways. I think the biggest inhibitor today that I see for the companies, particularly the companies that are really rolling into what I call the second phase of digital transformation, the first one being let's digitize our current existing operations, so we introduced technology in the current processes, and so on. The second phase being more, let's actually transform and use the technology to its potential so we can serve customer better or run our operation more successfully through IoT, ai and all this kind of stuff. So, even in the people that are motoring on the latter, we're still seeing that the biggest inhibitor is around people, and people being, of course, traditional change management stuff that we've seen for years, like resistance to change and so on and so forth. But I would say a difference layer, which is more around skilling people, and I was talking to a client last week who were telling me we're actually the victim of our success. So now, at first we were trying to roll out all these digital transformation programs for the corporation. Now everyone is buying into it.

Richard de Kock:

And we have a second problem.

Didier Bonnet:

Yeah, we don't have enough capabilities to actually deploy all this stuff. So they're thinking of creating a mass reskilling university within their corporation to globally retrain people so they can be more effective on the digital side. So I think back to the answer to your question. The biggest inhibitor I would definitely put employees people getting people to really work differently using this technology still the bigger impediment.

Richard de Kock:

See, I could see that as well, but one of the biggest things I thought was a massive inhibitor was the lack of a clear industry definition, especially at an organizational level. Very frequently when I come across organizations, it becomes quite clear that for many of them they've got the strategy in place, but it's something like Cloud First, or we're modernizing our workplace, et cetera. And do you believe this has been a contributor to organizations successfully adopting digital transformation?

Didier Bonnet:

Yes, absolutely, and I feel to some extent really sorry for business leaders and CEOs that are faced with this massive overhyping of digital transformation that we have today, because I don't think what happened is a lack of definition. I think you can argue there's 20 different definition of what digital transformation is, but you can be fairly academic about it and try to find the best definition. At the end of the day, it's pretty simple what digital transformation actually means, and I think we provided a pretty standard definition in our work in the early 2000. But I think what happened is different. The whole term was bastardized and hijacked by a large number of people, like tech companies who are selling you Cloud, and this is the ultimate solution to digital transformation is Cloud. And then you go to somewhere else and the ultimate answer to digital transformation is my e-commerce platform. And so you've got this massive hijacking of the term to describe components of digital transformation that really most of them don't transform on their own.

Didier Bonnet:

And it's back to your point about digital transformation is systemic. I mean you have to get various components together leadership, customers, operations, business model, the way you price, and so on and so forth. If you don't get all these elements in a role, then you will not succeed, and that's why it's complex and my fear it's not today. And the reason I say why I feel sorry is executives are being bombarded with the latest solution to your digital transformation or the free way you're going to succeed, or the seven ways you're going to succeed. And actually we must remember that, and I think it's something a lot of people have forgotten, that people are looking for instant solution, instant gratification. Digital transformations are long cycles.

Richard de Kock:

They're the three years or so, if I remember, from your book, right?

Didier Bonnet:

Yeah, I have clients that have been at it for 10 years and once you finish your first phase, wow, it opens up all sorts of opportunities for the next one. So these are long cycles and we shouldn't be looking for the silver bullets, or I think, because there ain't any.

Didier Bonnet:

Exactly, yeah, and I think all these technologies I mean technology progress is massive and amazing, but it's only one of the components of what needs to be done. So I think this notion of long cycles, commitments stick to what you're trying to do is really important, rather than going for the latest fad and to some extent, we've had the fad about analytics, now it's a fad about AI, and then it'll be. At one point it was IoT, and all these things are useful, of course, they need strategic context, I suppose.

Didier Bonnet:

Exactly. There's just one component of the solution, and that's why it's long cycles, and that's why it's complex and difficult.

Richard de Kock:

And I suppose it's tricky because I know many vendors would be you know, with the best intent driving a lot of these, and I suppose it's where the message gets mixed up, because these are all paramountly important to effective digital transformation, things like cloud and so forth. The parts they play are pivotal to the success of the strategy. I think it's just clarity. For my side, did you hear? It's making sure you have a clear strategy. That's the trick here. Is that right?

Didier Bonnet:

Exactly, exactly. I mean. I think that you know the simplest analogy is like, of course, to you know, to use your car efficiently, you need an engine, you need tires, you need a steering wheel, you need plenty of things, but it's when all these components are together that you get a good experience from driving. It's kind of the same. You know people are. You know, if you sell tires or if you sell a steering wheel, you can't claim that you're giving the ultimate driving experience. You're not. You're giving the component of the course.

Richard de Kock:

It's a good analogy.

Didier Bonnet:

And that's kind of where we are today, unfortunately. So there's a lot of over-iping, which is, you know to what extent we should rejoice, because it means that this notion of digital transformation is at the forefront of every executive and every corporation. So that's great, but I think we need to cut a little bit through the fog and go back to some of the basics that we outlined back in 2014. But you know, what do you need to put in place to make sure this transformation has increased chances of success? Because the failure rates, as you've seen, are pretty high. So, absolutely so that's. You know, the risk profile of doing a large transformation is not insignificant.

Richard de Kock:

Absolutely. So let's go get a little bit more practical for a minute. So let's briefly dig into the capabilities themselves, namely your new findings. So you state that the leadership capability, the elements such as vision, engage and governance, they've endured, but in the digital capability elements, such as customer experience, internal operations, business model, innovation, those have expanded and, as we mentioned before, more prominence has been given to the digital platform itself. Can you share a bit more about these changes and what I mean? We've spoken about them, but what? What do they mean in practice for practitioners out there?

Didier Bonnet:

So so I think the yeah. So that's a complex, complex question because let's take customer experience as an example. So we've been through a number of ways where we've seen, as I mentioned, your own consumers behaving differently, patterns of consumption changing quite radically, and then we had this wave of it's all about customer data. So you know, he or she who has more, more data will win the customer battle. And actually when you, when you look more in detail, of course we've become more intelligent. Of course customer experience as a practice has become much more scientific than it used to be because of the data side. But you know, the design of the experience is still important and design is about creativity. So we've seen more introduction of creative skills into this process. At the back end, we've also seen a lot more work and I'm talking of the company that do that well spending time of on the emotional engagements of their customers. You know the way that customer participate not just at the end of a value chain, but participate in the process of building your products or your services. So I think that you know what's become more complex is if you if I just take the customer experience, it's kind of you need good experience, design, creativity in the way that you deliver the system. You need, of course, good customer intelligence to be able to refine, to recommend, you know, the next-back purchase or whatever. But you also need to understand the softer side of the emotional engagements with your, with your products and your services, and I think it's people that are getting this recipe right that are actually shooting ahead, not just you know again one component of that so you can have, you know, the best customer data you want. If your experience is terrible, then nobody will stick with you. You know, and that's particularly now. I mean, customers are becoming more and more fickle because if it doesn't work within, you know, the first two minutes of using your app, for instance, they'll go somewhere else, you know, and so they should. And then the second part is once they've used something that works really well and we've seen that with Uber and other platforms that becomes the facto standards from which everyone else is judged. So that's raising the bar in terms of expectation, and I could have the same thing around, you know.

Didier Bonnet:

So this is for the customer experience, for the operation. It's really more around. You know, we've talked about automation for a long, long time and in fact it has happened in a number of manufacturing environments, like automotive, for instance, for a long time, but we're really now getting into a much more profound way by which we automate processes through things like like, like RPA and others. We're getting really to the point where most of the machinery and most of the products are being connected dynamically so they can transfer data, and this is kind of IoT and another type of application which you know are still we shouldn't dream, we're still in the infancy of these developments. But the fundamental changes for operation is we are able to get data from the point of use, which we never been able to do before. So in terms of decision making, you know, data management has become absolutely essential to running good operations. So you can. What does that mean? Practically? That means that you could be sitting in, you know, on the coast in the South of France and actually drive your engineer in Canada for repair and maintenance, you know, because of this technology. So a really different way of managing, I would say, connected systems within organization, and I think you know as much as we spent a long, long time in the early part of digital transformation on the customer side, and quite rightly, because that's usually important, we're seeing an explosion now on the operations because, you know, we have these new technologies that really provide amazing and we haven't talked about robotics, but we have the same argument about robotics it's amazing ability to really provide a step change in the efficiency and the effectiveness of operations. So those are the components and then for employees, what really matters is so that's why we've put employee back in the center is, of course, I think we've done quite well in, I would say, employee using different tools, in deploying collaborative tools, file exchange, zooms and all this kind of stuff.

Didier Bonnet:

I think what we're seeing now is a really different sort of game. I mean we need to. I've mentioned the reskilling and the building, the capabilities for employees and people in organization to really use these tools to the maximum. We're also seeing a lot of what we call augmentation in the paper, which is this notion of how do you get employees and algorithm or machines to work together effectively, and I think we've passed the stage now where it's kind of robots are gonna steal my jobs and everybody's gonna be an employee type of discussion. I think it's much more so. Of course there will be losses through automation, but of course there also be gains. I think the important part in the next few years is really to try to understand how we get these machines and people to work together effectively within organization, as well as reskilling people.

Didier Bonnet:

And then the last one, which we know is kind of a buzzword we call it flex forcing, but I think it's got a profound implication Is we are today talking about with organization who have about up to 30 to 40% of their employee who are not on their payroll? Very good point, yeah, and this may sound like so. Who are they? They are gig workers, they are contractors, they are professional services people, whoever. And I think the world is moving more to a model where the whole notion of a company owns everything, owns all assets, owns all employee and everybody else is outside of the wall is kind of crumbling.

Didier Bonnet:

We're moving to a model where it's more about how do you orchestrate ecosystems of partners, but also of employees. And that's got a huge implication for how particularly for if you think about HR leaders in this world who really think, well, how do we actually run companies where over half probably of the people who do the work are actually not on our payroll? So let me give you a practical examples. One of my clients was that's gonna be the other day? Do I give them an email address? So really, really small example, but it's just one of the thousands of problems. That an opportunity is to some extent, because what this flex forcing does is gives you huge amount of variable cost base. So, in other words, you can tap on these people when you need them and not when you don't need them, which is a massive, massive leverage in terms of the cost part of an organization.

Richard de Kock:

So and I think 2020, it's really contributed a lot to that as well, because we had to get a lot more flexible with our resources.

Didier Bonnet:

Right, and then we haven't mentioned the C word yet, but I think what we've seen in the last year also is if I go back a few years, to be honest, I mentioned people as being one of the big inhibitors so we became really good at deploying applications, tools, collaboration platforms, blah, blah, blah, all this kind of stuff, and the key to making the ROI was always the adoption, and we know that the business case is actually in the adoption of tools, not in the deployment of tools, and we spend months and years with clients trying to build adoption models so people could see the benefit of actually using these tools in their day to day work.

Didier Bonnet:

And then comes COVID and it's no more about adoption of these tools, because the tools are actually the only game in town. So if you don't want to sit in front of your PC and do video calls or exchange files or collaborate on different platforms, then you're going to be pretty lonely in the workplace because there's nothing else. So I think that to me and you've probably heard the same saying about people saying oh, we've achieved 10 years of digital transformation in 10 months, or three months or whatever. We've heard that all over the place I think that's a little bit simplistic. What we've seen is we've seen an amazing acceleration of the adoption because of necessity.

Richard de Kock:

And that doesn't give you competitive advantage, and that's, I think, the key message right, that just brings you up to speed with everyone else. So it's not how I would view a proper digital capability transformation. If that makes sense, yes, I think it does.

Didier Bonnet:

So this is a question that everyone's asking is that a blip in the system? So when we go back to normal, whatever that is, everything will go back to resistance and non-adoption and things like that? I don't think so. I think we've seen a massive, we will see a massive increase in people's or employees adoption capabilities of these tools, because they've been through the pain of trying to figure out how this platform works and then suddenly you realize well, actually they're quite similar in their format, so I can use several, and so on and so forth. So I think we'll see that. So I think we'll see that. Where I think it's overplayed a little bit is it doesn't mean that your digital transformation has advanced by 10 years, because when you go back into your operation and you still have to connect your product and do your IoT application, you will find exactly the same hurdles as you had before COVID. So I think it's accelerated a big part of transformation, but not the whole part in my group.

Richard de Kock:

Yeah, that makes sense. Well, it's been absolutely wonderful speaking to you and this has all been extremely informative. I'm sure our listeners are gonna really, really enjoy this session we've had today. As a final message out there for everyone who's practicing digital transformation, desperately trying to get this right, what's your key message you'd like to leave with people today?

Didier Bonnet:

One is. So I would say don't get carried by the hype. Digital transformation is hard work, long cycles, but there are things that we've learned in 10 years about what you need to put in place to at least maximize your chances of success. So get those right. And there are various phases in digital transformation, from the initiation of the first one to how you run and scale your initiatives. So really try to stick to it. If it gets too complicated, I would say limit the impact, Do something very well until it's actually delivered and then move on to the next one. You don't have to do everything in one go, but this. So stick to your investment and your commitments and really don't forget the basics, the basic element that actually make this thing work and it's really easy to do. So those will be my main message.

Richard de Kock:

Thank you for joining us and I really hope you enjoyed our session today. Please subscribe to future podcasts and your favorite podcast platform or go to wwwthesearchforclaritycom. Keep an eye out for our next exciting episode in two weeks. Until then, take care and stay safe.

Digital Transformation Introduction
The Rise of Digital Transformation
Digital Transformation Challenges and Definitions
Long Cycles and Digital Transformations
Phases of Digital Transformation Strategy