Digital is finally reaching a tipping point. It is now transforming old organizations and giving birth to new types of organization; and indeed, to a new type of society.
Way back when electricity was invented, when some architects heard about this new invention, they thought: "How do I add an electrical system into the buildings I’m designing?" Other architects thought: "How does electricity change the nature of the buildings I’m designing?"
The second type of architect invented the skyscraper. Before electricity, the height of buildings was limited because you couldn’t efficiently move masses of people up and down countless flights of stairs. The electric lift solved that problem and opened up a whole new way to design buildings.
Companies such as Google, Amazon, Uber and Netflix, who are thriving in this digital age, are not thriving because they are digital. They are thriving because they have adapted new models of organization that opened up as a result of digital.
Too many organizations want digital transformation without having to do any real transforming. Digital is not the transformation. It is the agent of transformation. Fire is not cooked food. Fire is the agent that cooks your food. The questions organizations must ask is: What is the best practice new model organization that will thrive within a digital environment? How do we become that type of organization?
A PDF is not digital transformation. A print, old model mind-set will never achieve digital transformation. In the early days of the digital revolution it was enough to be thinking about digital technology, but the leaders have moved way beyond that sort of basic thinking. And yet so many organizations see this as a technology issue.
Unfortunately, the IT department is probably the least digitally savvy department within most organizations because they are still obsessed with the technology. A great many organizations still seem to think that the answer to digital technology is in buying the right technology.
We need digital architects who are thinking about new models for new societies and economies. If we’re talking about technology we’re having the wrong conversation.
So what does digital do? Digital facilitates networks far more than hierarchies. Digital massively frees up the flow of information. Digital makes the tools of organization incredibly cheap and widely available. Digital is about flow and speed, malleability and flexibility, impermanence and uncertainty.
The skyscraper idea of digital is organization around the customer. This is true digital transformation. Old models had the organization and state at the center and the citizens and customers circling around this organizational nucleus. Digital, in a way, has no center, no hierarchical pinnacle. It is a massive network.
In this massive network, much more power flows to the masses and away from the elites. The real transformation at play today is about organization around customers, who are far more populous and powerful within the network. They have their iPhones, they have their networks of friends, and they are totally plugged in to a treasure trove of information.
Old model organizations sitting on the sidelines thinking that if they just digitize by buying more technology are sadly out-of-touch. It is the old model organizational, hierarchical, controlling mindset that must be transformed.