The forward drive of organizations — or at least the desire for forward motion — is clear. Just look at some of the surveys from AIIM, such as the State of the Industry — Content Services report:
- 45% of organizations said their organization was at significant risk of disruption in the next two years.
- 79% said that in response to this threat, digital transformation was “important” or “very important” to their organization.
I admit a lot of this talk is exactly that — talk. Previous waves of hype suffered from the same disconnect between organizational intentions, fueled by supplier marketing engines and analyst conferences, and the reality of implementation. Too often, hype like this leads to big strategies that seem divorced from reality, destined to lead to overly simplistic models of innovation. I still haven't been able to shake the image from over 10 years ago of a huge sign at a trade show hanging over a scanner. It read, "The Knowledge Management Scanner."
The digital transformation equivalents of that pesky scanner are ebooks with titles like “5 Reasons Why Invoice Processing Is the Key to Digital Transformation.” (Truth be told, I’ve written some of them.) Is digital transformation — something that always struck me as an extremely strategic priority — potentially being hijacked to sell tactical process improvement solutions? Or is the fault mine: Have I bought into an overly simplistic view of digital transformation?
Related Article: Think Digital Renovation, Not Digital Transformation
The 4 Zones of Organizational Performance and Transformation
I recently rediscovered Geoffrey Moore’s "Zone to Win: Organizing to Compete in an Age of Disruption" (thank you to Atle Skjekkeland from the Digital Value Institute for bringing it back to my attention) and it has me thinking that perhaps the heart of the problem is my assumption that there is indeed just one flavor of digital transformation strategy — Big! Strategic! Game Changing! — rather than a variety of flavors tied to the individual circumstances of any particular firm or organization.
At the heart of Moore's book is the idea that there are four zones of organizational performance and transformation:
- The Productivity Zone: “The productivity zone is home to a host of enabling investments in shared services, all managed as cost centers. These include marketing, central engineering, technical support, manufacturing, supply chain, customer service, human resources, IT, legal, finance and administration.”
- The Performance Zone: “The focus is on material revenue performance derived from established businesses that are sustaining to the status quo .... These are people who pride themselves on delivering the goods — on time, on spec, and on budget — and making the number — quarter after quarter after quarter.”
- The Incubation Zone: “On the disruptive side of the ledger, the incubation zone plays enabling host to fast-growing offers in emerging categories and markets that are not yet producing a material amount of revenue. Its charter is a simple one: Position the enterprise to catch the next wave.”
- The Transformation Zone: "The transformation zone is the place in an established enterprise where a disruptive business model goes to be scaled to material size. It is primarily a tool for offense."
The trick in managing against the requirements of these zones is twofold: 1) the performance measures for success in each zone are unique to that zone; and 2) your strategy for optimizing performance across these zones depends on the nature of the disruption you are facing.
Related Article: Goodbye Digital Transformation, Hello Cathedral Thinking
Should Your Company Be Playing Offense or Defense?
Moore's approach seems like a much better and more nimble way of thinking about digital transformation than my one size fits all, Big Bang model. The digital transformation prism actually has many facets. Your transformation strategy, and the content management strategy that goes along with it, depends on the nature of the disruption facing your organization. Is it one that requires a defense of your incumbent advantages or one that requires you create an entirely new business model, perhaps in an adjacent space? Content management capabilities can play an especially key role for incumbent organizations looking to capitalize on the advantages of their established products and customers and scale — if they are willing to focus their efforts on modernizing their information toolkit.
Ruthlessly automating the core back-end processes in the productivity zone — a primary competence from the ECM era, and something that is second nature to companies in the content management space — can be a suitable transformation strategy if the underlying assumptions of the business are not under siege. Likewise, a transformation strategy focused on content-enabling and automating the core industry-specific processes that are central to the performance zone (i.e., through a more modular and modern content services strategy) can be a way of warding off disruptors. Per Moore, “The reason the Transformation Zone has to get involved here is that, left to its own devices, the Performance Zone will just keep on performing."
Related Article: The Oft-Forgotten Fundamentals of Digital Transformation
Understand the Threat and Act Accordingly
Yes, sometimes the ground shifts dramatically and quickly, and organizations must stake everything on an offensive strategy. But not every transformation challenge is as dramatic as an Uber disrupting the taxi industry, Netflix lapping Blockbuster or digital photography leaving Kodak in the dust. Sometimes death by disruption occurs by a thousand cuts, damage that could have been avoided by embracing a more modern strategy for intelligent information management. Modernizing the information stack is not easy, but it is better — and less painful — than the alternative.