The Digital Transformation Office: Controlling the Digital Vortex

By: Alec Talan

When it comes to critical transformation projects, to get the project done on time and successfully, you may end up stepping on some toes and leaving a few bodies by the road on your way to go-live. It’s miserable and oftentimes scary to be involved in full-contact corporate sport where you’re competing for time, limited resources, et cetera. 

This often stems from the fact that senior leadership has multiple ‘top priorities’ but doesn’t do enough integrated feasibility work to make sure the jumble of competing activities don’t run into each other months down the line. 

As the old gripe goes, if only there was ever enough time and willpower to do those  pesky feasibility assessments up front — and properly —  or if only there could be put in place an effective mechanism for managing the air-traffic control, many things would be easier.

Enter the concept of the Digital Transformation Office (DTO). But before I talk about what that entails, let’s talk about why it’s needed.

Why Strategy Often Submits to Tactics 

I often reflect on the times I’ve been called by a program sponsor or champion to tell me that they had to do damage control on my behalf. I’d like to say that this was just a temporary period of that peculiar time when you’re branching out into uncharted realms but before you mastered your domain, but I’ve yet to find any practitioner that can attest that they have completely moved beyond this reality when leading complex business transformations. 

The hard but kind truth is that if you care about your work, you will upon occasion sojourn into choppy waters and face flak acting as a fiduciary for all, at the expense of some. But that doesn’t mean it can’t get better!

This is what I’ve come to call the Ivory Tower dilemma: when you’re trapped in your tower, as many high-level execs are, how do you know what’s happening on the ground, and how do you know what you want to happen will actually happen?

Sun Tzu famously noted that a general will fail for three reasons:

  1. Giving an order to an army that it cannot follow (hobbling the army)
  2. Managing the army as one would a kingdom, being ignorant of the needs of the army
  3. Misusing or misapplying the army’s key leaders

While 2 and 3 are each worth discussing separately, let’s begin with 1: the best strategy is only as good as its ability to be executed.

Consider this situation: a global organization bigger than most municipalities identifies the problem that it has so many different systems of record, it is virtually impossible to have any traceability of a product traveling through its supply chain, or the flow of accruals or receivables through its shell entities. It is in practical effects, a collection of nesting dolls. 

The leadership, quite wisely, decides to embark on an initiative to standardize both its processes and data in order to create an ecosystem where information flow can be measured and traced.

The C-level aligns and makes the directive to make the vision happen. The next level salutes and obeys, in theory. Entire teams are mobilized, external experts are brought in, and an entire micro habitat develops to spread the vision across the many dimensions of the organizational matrix.

Simultaneously, a supply chain program starts up to upgrade existing customer-facing capabilities, while in another corner of the organization, a quality initiative is running in its fifth year to enhance current practices. Meanwhile, not to be outdone, the technology leaders begin a new multi-year overhaul of their middleware solutions to drive operational efficiencies. 

All of these initiatives have hard deadlines and budgets, and more importantly, each has a motivated, ambitious, capable leader on an upward trajectory. You can see where this story is headed: each is pitted against each other for limited resources, even before you throw the C-level standards initiative into the mix.

And so you will inevitably end up with conflict and tension among the various program leaders and their lieutenants, as each is maneuvering to ensure the success of their work, even if it can run afoul of another program’s needs, whose leaders are in turn following the same approach to protect and advance their interests. 

In best cases, the various program leaders are able to work things out directly, and at worst, you have sporadic border skirmishes as teams fight to plant their flags in the unclaimed territory called Priority.

This is where accounting for dependencies at the portfolio level becomes a crucial exercise. At the portfolio view, it is a matter of asking three simple questions:

  1. How do I know that [insert a program] is taking [insert some other program] into account?
  2. What will happen if they do not? 
  3. What is required to make sure (2) doesn’t happen?

It may be tempting to simply push the problem down and let the next layer of implementation leaders sort it out, but that is inefficient and unkind. Inevitably, major priority conflicts, resource overallocation, and fundamental strategy collisions bubble up to the senior steering committees or councils to sort out.

Enter the Digital Transformation Office Concept

In the end it saves a whole lot of time and pain to start the whole thing with an integrated multi-year plan and bring each of the various program leaders to the table on a regular basis. 

The typical knee jerk response I hear from leaders is that “no three-year plan has ever been attained, so it’s a fiction not worth the effort.” This is a true statement, for the most part. But I’m a firm believer in Eisenhower’s view on the matter, during his time at D-Day, “I have always found that plans are useless, but planning is indispensable.” 

The goal here is to not create a static view with a blood oath to adhere to the plan at all costs, but rather acknowledge the reality of complexity, interdependence, and the various forces across people, process, technology, and data dimensions shaping the various activities, and create a starting integrated view that takes all of those aspects into consideration. From there, it’s vital to regularly and relentlessly re-measure, re-evaluate, and update the integrated plan. That regular exercise of ‘air traffic control’ management is by far the single biggest risk mitigation and success assurance you can engage in at the portfolio level.

The somewhat unpleasant truth is that doing this properly rather than paying lip service to it requires having accurate insights based on current data signals from the front lines of every program, a leadership team dynamic that encourages transparency and trust to speak the necessary truths no matter how uncomfortable, and a culture of high-velocity decision bias to inflect and adapt with 70% information rather than deliberate and wait until getting to 100%, which may be too late. 

Another factor for this model to work is the need for leadership confidence in their teams in order to empower the entire command chain for distributive decision-making, the so-called development of ‘digital acumen.’ This means that necessary changes and actions to drive in a  direction are defined and implemented quickly by the most closely proximate leads who have the most knowledge about the matter because they are the people closest to the action. 

Overall velocity is thus protected by decision-making at the lowest level necessary for an informed decision to be made by most knowledgeable leads who are empowered to do so, rather than vaulting every potential cross-program conflict up into the stratosphere of senior leadership. The Digital Transformation Office is the formal structure for air-traffic control, but it is a distributed structure built upon a culture of rapid information, bias to action, and distributed agency. 

So with this concept in place, you mitigate or even eliminate the situation where you have leaders or lieutenants doing heroics for the sake of ensuring their program success where they may end up in conflict or friction with other teams and initiatives. Because there is a proper forum and a proper decision-making culture that allows for these sorts of issues to be resolved in a more productive fashion, the tragedy of the enterprise commons is prevented.

This is the value of the Digital Transformation Office in today’s digital transformation landscape. It is an integrated portfolio view of all operations and all transformation initiatives that connects the dots at every level of decision-making to control the so-called ‘digital vortex‘ and effectively orchestrate the entire enterprise digital transformation vision.