You can’t have successful digital transformation without transforming management practices and culture.

Digital transformation has already happened in the world of the customer. It is only now happening in the world of the organization. The customer is way ahead of the organization when it comes to digital transformation.

“Consumer IT spend has grown five times in a decade,” Mark Hurd, Oracle CEO stated in 2015. “Companies’ IT spend in that time frame is flat — and 82 percent of their spend is on maintenance; only 18 percent on innovation. Consumers are innovating. Companies are not. Companies have to keep up.”

If you think back 30 years ago, the customer lived in a truly pre-digital world. Those who worked in an organization — particularly a larger one — had far more access to computing power and digital tools.

Fast forward to today. The internet, smartphones and the explosion in consumer apps has created a highly connected, informed, empowered and confident customer.

Look inside most organizations and you see legacy systems of tremendous complexity and horrendous usability. Organizations are literally failing at being organized. They are simply not keeping up.

The Bring Your Own Device (BOYD) trend is a testament to management failure to provide the right tools that information employees need to do their jobs properly. According to IDC, the number of employees who will be bringing their own devices to work will rise from 175 million in 2014 to 328 million in 2017.

Imagine not having quality search on the internet. It would be a nightmare, wouldn’t it? Finding stuff quickly is so basic in a digitally transformed economy. Look inside most enterprises and finding stuff is a nightmare. 

“From my work in program development for both the Enterprise Search Summit in the US and the Enterprise Search Europe events I can say this: persuading search managers to give presentations was a nightmare,” Martin White, managing director of Intranet Focus, Ltd wrote last week. “The usual excuse offered was that search was a ‘work in progress,’ which in my book translates to no investment in work and therefore no progress.”

The root of the problem is management culture. The old, traditional management culture is hierarchical and authoritarian. Most organizations are like monarchies. Once you’re outside management, whether you are an employee or customer, you are expected to listen and be led. Traditional managers find it very difficult to empower employees or customers because they see that as undermining their power.

Digital transformation transforms power structures. Whether management likes it or not, employees and customers are empowered by digital. The very concept of leadership is being transformed from leadership by individual to leadership by team. In the non-digital / physical environment, knowledge and the ability to communicate and organize are concentrated. In other words, the people at the top have far more knowledge and far more tools and abilities to communicate and organize than the people at the bottom. That just isn’t the case anymore.

I once tried to convince a manager to support an investment in improving organizational findability. At one point he looked at me with a slight air of hostility. “Why would I do that,” was his reply. “If they need that sort of information they can ask me.” That’s a culture and attitude that must be transformed.