The ‘caterpillar - chrysalis - butterfly’ analogy is a staple in discussions on digital transformation or DX. But is it time to retire - or refine - this metaphor for DX? After all, the transformation of an organisation does not end when the butterfly emerges from the cocoon. What happens when the butterfly soars for the first time, in a new, if always changing, environment?
Indeed, what’s next for organisations when they reach the end state (‘metamorphosis’)? These are questions I posed to Alan Hesketh, founder of Business Value Consulting, and principal advisor, CIO advisory and digital strategy at Ecosystm. He responds with perspectives organisations can take as they shift to thrive in a changing environment.
For Hesketh, it is not about digital transformation, but organisational transformation, making essential choices using what he calls the VIE model: Value, Integrate, Evolve.
Underlying the model are these questions:
Value: Why are we doing this? “Focus on delivering people centred value.”
Integrate: What are we changing? “Integrate old and new technology into a single digital platform.”
Evolve: How do we change? “Iterative, continuous change.”
The method, he says, applies irrespective of sectors - public, private or not for profit. The approach is borne from his experiences and lessons learned from more than 30 years in digital and information technology roles in both public and private sectors, in a range of different industries, within and outside New Zealand. “One of the reasons why many digital transformation (DX) changes actually fail, [is] because when they start, they have an end point in mind. By the time they go to the end of metamorphosis, things have changed,” says Hesketh.
He then points out that another stage towards metamorphosis - the chrysalis - “is actually an area of high risk for organisations”. “By freezing yourself while you're undergoing that metamorphosis (when ‘the chrysalis is attached to a leaf’), you are putting the whole organisation at risk as everybody else is continuing on their tasks and customers' expectations continue to change.” “If you look at the length of time of organisations in the Fortune 500, the duration of time or how long they can stay there has changed dramatically in the last 20 years,” he states.
“So the need to keep changing and evolving for organisations is more important now than ever with new technologies coming. They are going to change the way we do things,” says Hesketh, who discusses the VIE method in his upcoming book 'Start Fast: Achieving Rapid Impact from Digital Transformation’.
Hesketh stresses it is evolution not revolution, it is about continuous change, and organisations should continue to invest in the process. “The idea is to get organisations really focused on changes that really matter.” As he points out, when organisations get into change, they get swamped with details. “You need a mechanism that reminds you of your why.”
“You take another look at the horizon.” It is, he says, like that story of flight crew members of Eastern Air Lines Flight 401 who were trying to figure out a problem with a burnt out warning light on the plane dashboard. The plane was reducing altitude slowly and steadily. The crew failed to heed the ground proximity warnings and the plane crashed. “They were so focused on solving that one problem,” says Hesketh. “If they checked the horizon, they could have asked, are we still flying at the right height? Are things basically going well?”
He cites the power of accumulative advantage or one percent rule as stated by James Clear. Where, one percent change everyday compounds rapidly. “If you’re improving daily by 1 percent, then 1 percent, then 1 percent compounding, after a year you will have improved by over 3,700 percent.”
He says HBR research finds 5 percent of an organisation’s roles account for 95 per cent of an organisation's ability to execute its strategy. “Everybody else is there to support that 5 percent,” he says. “That is where the value is created. Why not focus your time and money on improving the real value differentiators?”
“What are the new capabilities we have to develop? Where do we get those from? Some of them we do internally, because they’re leading edge and are important to the five percent [that provides the differentiators].
Any changes have to be people centric, he stresses. They should consider the impact on customers or consumers. “Without thinking of them, you're not going to survive. If you do not deliver the services that are going to meet their needs, you will cease to exist.”
He adds: “Your employees are doing the work, do they have tools to do the job? Do they enjoy what they're doing?”
“If you want to change, you need to identify and accept where you are, define what you need to change and get rid of. We need to make decisions now because the world has changed. What did we do well? What did we do badly? What can be improved? Where should we go from here?”
As I see it, the stories after an organisation’s ‘metamorphosis’ will be more compelling as the world moves post-pandemic… and the search for a new metaphor for change continues.