Every company knows the importance of digital transformation. However, according to Accenture’s research, the average score of China’s digital transformation index is only 52 points (out of 100), and only 17% of companies have achieved significant results from digital transformation. Therefore, many companies lament: “Not going digital is waiting for death, going digital is looking for death.”
Why is digital transformation popular but not effective? The real reason lies in the internal management structure of the company. Digital technology is just a tool. If the company’s management structure does not change, advanced technology not only often has no place to use, but even breaks the original internal balance and becomes a resistance to management and business.
For example, many companies adopt a bureaucratic management model. The company forms a level-by-level communication and reporting information transmission method. Obviously, the more levels, the more information transmission loss. Bureaucracy, and the accompanying responsibility system, determines that employees often exhibit behaviors of reporting good news but not bad news, making the organization slow to respond to the outside world. Then, shouldn’t digitalization be able to speed up information transmission within the company? It seems so on the surface, but in fact it destroys the original “rules of the game”.
Under the condition that the original management system remains unchanged, the digital system becomes a digital “evidence retention” system. When problems may occur in the business, due to the existence of this digital “evidence retention” system, everyone needs to leave more and sufficient evidence to prove that they are not responsible. Everyone is busy retaining evidence, and there is no time and energy to deal with the real business. For example, our employees will pay attention to the time and number of phone calls with customers, but no one really thinks about how to communicate effectively with customers, how to understand and help them. What’s even more frightening is that the existence of this digital “evidence retention” system will destroy the original flexibility of the business. For example, facing customer dissatisfaction, customer service staff can deal with it quickly and flexibly. But now they are afraid of “violating regulations”, or they simply don’t have the “authority” of the digital system. They can only mechanically repeat the company’s rules and regulations to customers over and over again. Obviously this will make customers even more dissatisfied!
The essence of digital transformation is innovation. Companies need to use sustainable innovation capabilities to cope with changing external environments. This requires us to build a new learning organization structure. As Peter Senge, a master of learning organization management, said: “Structure determines behavior.” Obviously, to truly unleash the power of digital transformation, we need to work both internally and externally, not only need technological upgrades, but also need to promote the redesign of organizational management structures. This is a change.