Article Series Part 1 - Culture: Digital Transformation Debts post-Covid-19

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Editors Note: BPMInstitute is excited to share this article, written by Dr. Setrag Khoshafian, with our community and in advance of his new book release. Keep an eye on our website as we share additional articles in the coming months written by Setrag, as well as a pending Meet the Author webcast to discuss his new book 'How to Alleviate Digital Transformation Debt’ expected to air Fall 2021. This article was originally published on CognitiveWorld.com on July 14, 2020.


The impact businesses and governments faced in the wake of the Covid-19 lockdown will be felt for many years to come. The pandemic and extended lockdowns are causing mega-cultural trends that are already impacting us in a noticeable way. We may not be fully appreciating the shifts that are happening, as it is too close to home and we are in the midst of it, but it is happening in a very real way.

Pre-Covid-19 pandemic, digitization had been transforming all aspects of our lives. These changes were both technological and cultural.

Covid-19 has re-prioritized, stressed, and accelerated digital transformation change.

In 2018 I wrote a two-part article on Digital Transformation Debt (DTD). In my articles, I talked about what will happen if organizations do not address their "Debts"—the challenges we are facing from all fronts—they will have to pay a much heftier price. Recently, Cisco's former CEO, John Chambers, indicated that 50% of Fortune 500 companies would not exist in 10 years. Ignoring DTD, companies were already on a downward spiral, and Covid-19 is making matters worse. The need to "Change" (here we go again) is not a luxury, and it cannot be ignored. The main principle of "debt" is ignoring the painful transformational change in favor of easy or delayed solutions. Ignoring the trends and choosing easy solutions will only accumulate the “Debt." This applies to Technical Debt, but especially in the Covid-19 era, it refers to DTD. 

The two articles I wrote on DTD covered:

  1. Organizational Culture
  2. Value Stream Digitization
  3. Intelligent Automation
  4. Citizen Developers
  5. Citizen Data Scientists
  6. Design Thinking
  7. Customer Experience Optimization
  8. The Connected World
  9. The Decentralized World
  10. Digital Transformation Centers of Excellence (COE)

All ten dimensions remain current. But, the question to be asked is how has Covid-19 impacted these dimensions? What about the importance and priority of Digital Transformation Debt (DTD)? As we shall see…

Addressing Digital Transformation Debt has become much more critical in the post-Covid-19 era

The pandemic was a wakeup call. Organizations of all sizes cannot take "business as usual" for granted. Addressing core cultural challenges has become critical—it is a matter of survival.

Given the critical importance of DTD, this is the first of the series that will focus on the ten dimensions.

POST-COVID-19 CULTURE

The importance of Culture got accentuated in the post-Covid-19 era. Transformation starts with Culture. The conventional "Org Chart" did not inspire agility, change, or empowerment in the pre-Covid-19 age. 

Post-Covid-19, it has been challenged and stressed to the limit. It is a model that is no longer working—especially with the newer, technologically savvy, independent-minded, and entrepreneurial younger generations. 

Connecting through Virtualization 

The new norm is virtuality. The move to the virtual presence and virtual interactions is a mega digital transformational trend that will impact enterprises of all sizes forever. Video conferencing tools such as Zoom, Cisco Webex, Microsoft Teams, GoToMeeting, and others have witnessed an explosion in downloads and use. Conservatively virtual conferencing and the use of virtual conferencing tools is at least an order of magnitude more than pre-Covid-19. For example, a recent survey has indicated 72% of consumers had their first-ever virtual care visit during Covid-19. Zoom has become a household name and one of the most popular video conferencing platforms—though all the others have witnessed significant growth as well. One of my favorite platforms that I use almost daily is Facebook's Portal. Though more for personal and family use, I have used it for professional meetings, and it's quite good. Such widespread use of video conferencing tools—both for business and personal—will have a long-lasting impact on organizations and individuals for many years to come.

Flattening the Organization 

Virtual meetings and virtual presence have had an equalizing and flattening effect on most organizations. Suddenly, all the levels of the organizational hierarchy become accessible and physical restrictions—such as the number of people who can physically be hosted in a conference room or even the availability of conference rooms for interactions—are lifted. The speed of organizing virtual meetings, their accessibility, and the ability to record and then analyze are other key advantages that have a flattening and potentially empowerment impact on the organization—especially if the management encourages and endorses it. The top-down pyramid and functional unit organization structures are tired and passé: They do not inspire innovation or digital transformation. Employee empowerment has been elusive and hard to achieve within a rigidly hierarchical organization. The Covid-19 pandemic provides a wonderful opportunity for organizations to re-assess their rigid structures and flatten their organizations.

Flattening organizations with increased communication, collaboration, and empowerment is an irreversible trend.

We will continue to face many labor challenges in the Covid-19 era. A digital and agile organization with empowerment can leverage the innovative talents of its employees and improve their morals. The idea of challenging hierarchical structures and removing bosses (or replacing them with "mentors") has been around for a while. The need to quickly change and adapt to digital enterprises is compelling them to re-consider their rigid structures.

THE HOME OFFICE EXPERIENCE


 The cultural shift is complex and multi-faceted. The reset of "normal" work in a recent survey had some impressive results. It indicated after the lockdown, Employees want greater flexibility in the percentage of time they spent at home vs. office—the breakdown is 51% office and 49% home. Other trends included a focus on results vs. hours of labor; the end of the 9-5 model, changes in leadership attitudes, and desire to be upskilled. In other words, the employment world will be quite different post-Covid-19.

  • Trust and Empowerment: Working from home is creating a milieu of trust and productivity. In some traditional hierarchical organizations, managers wanted to physically "observe" employees at work. Now, that is still possible (through monitoring technologies) for the home office. However, increasingly managers are realizing focusing on productivity vs. control of physical presence is a much better approach. Some managers—and the HR within many organizations—are realizing they need to be more pro-active in trusting and empowering their employees (vs. micro-management that is so pervasive in traditional hierarchical organizations). The survey mentioned above indicated the individual autonomy of scheduling work increased from 7% to 22%, resulting in a much higher demand for flexibility. It hinges on trust and empowerment. This shift is a positive development in the cultural transformation and its impact will be felt for decades to come.
  • Stress: Working from home alleviated some stress—such as the long hours of commute for some. But it has created other stressors. The lockdown and quarantine have blurred the home-work boundaries and sometimes created tension within homes. Managers and HR had to mentor employees on balancing personal life and work. We are starting to see best practices and a lot of experimentation of different approaches to alleviate stressful situations for employees. Some strategies include frequent and on-point communication, clear and repeated articulation of available resources to mitigate stress, and pro-active guidance, especially for employees who are finding it challenging to work from home due to a plethora of reasons. Managers and C-level executives need to make empathy, trust, and wellbeing high priorities in the post-Covid-19 Culture.

 RECOMMENDATIONS

So, what should organizations do to alleviate the Culture aspect of DTD—perhaps the most important one? Here are two major action items and recommendations with action items. 

Prioritize Servant Leadership

Enterprises need to change their Culture by example. The need for "Servant Leadership" is compelling. The servant leader's primary focus is to serve—not to lead. Servant leaders do not try to impose their opinions or approaches on others. Instead, they attempt to serve the needs, wants, and aspirations of the people they manage or serve. The pyramid is reversed. At the top are the people or organizations you are trying to serve. The "leader" is at the bottom. As described in Service Oriented Enterprisesother characteristics include the Sharing of Vision, Involvement in Decisioning, Teamwork Focus, and others. These are top priorities in the Covid-10 era. Servant leadership is a cultural change. The executive board needs to make it a top strategic priority. C-levels, vice presidents, and managers need to go through rigorous education, training, certification, and evaluation in Servant Leadership.

 

This is a ten-part article series centered around Digital Transformation Debts in the wake of the Covid-19 pandemic. Be sure to check out all ten articles!

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