I don’t know why we talk about digital transformation when we should be simply talking about transformation. What is happening has nothing to do with technologies, but is driven by technological change. In other words, it’s not a digital transformation. It’s a change management transformation, and all those familiar with change management will be aware that it often means change the management.
This is where I’ve spent so long throwing rocks at bank executive teams, as they have the wrong management and, in many institutions, the wrong thinking. The idea that a transformation programme can be delegated is a good example. You cannot delegate a change management transformation programme. You cannot delegate something that is meant to change the whole mindset and thinking and culture of the company. You cannot delegate the future of the company.
And this is where we encounter the fundamental error of digital transformation, and it’s thinking that it’s all about digital. It’s not; it’s about mindset. So, my litmus test for this is if I walk into a leadership meeting and ask someone to tell me the difference between machine learning and artificial intelligence. I follow it up by asking anyone to tell me the difference between blockchain and distributed ledger technology.
Why is this a test?
Because it immediately shows me if anyone on the company’s executive is immersed in digital concepts to make the transformation work, or if they are bereft of digital leadership. You may think I’m being a bit pedantic – why should a bank executive know these things? – but the importance cannot be stressed enough.
If a bank is going through a change management process to transform to be digital, how could they do that if no one on the team understands what digital means? If you’re betting the bank on a multi-million or even multi-billion change, how can that work if no one on the team understands what change needs to happen.
Talking of change therefore brings us back to my favourite old Charles Darwin comment:
But I extend his comment. It’s not the most adaptable to change who survive if they change in the wrong way. It’s the most adaptable to change in the right way for the next generation. After all, I’ve met many executives who admit they know they have to change the bank to be digital; they just don’t know how.
Now, these are all important comments but the real hard-line is the three steps I’ve outlined above:
- transformation is about change management and not about technology
- having said that, to succeed in digital transformation, you have to have management who understand technology concepts;
- which is why digital transformation change management demands changing the management.
Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...