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Digital Transformation : Organisation Culture

The In-sourcing Trend

One of the big changes that we are seeing in the market today is the change in the relationship between business and technology. From being a separate organization that was mostly treated as a cost center, technology has gradually moved to the core of running a successful business. I have heard business leaders routinely make statements like “I don’t want to see the sausage factory” meaning that they didn’t want to understand how tech got things done as long as things got done. Most businesses are realizing that such an attitude towards technology is not helpful in today’s business environment. Business leaders HAVE to understand technology to be able to take advantage of it because that is the only way to drive new business models today. Whether it is “creative” underwriting using algorithms that assess a person’s risk profile by seeing which apps they have on their phone OR generating meaningful descriptions for e-commerce products by just analyzing the images, businesses can create tremendous competitive advantage for themselves by understanding and leveraging technology.

Changing relationship between business and tech

In this climate, the technology function that was once outsourced to a faraway world being considered a non-core competency, is being brought back into the business because it has suddenly become a core competency for almost every business.

The Talent War

A decade ago, it was big IT services organizations that would hire technology talent. Today every established bank, telecom company, airline and hotel chain is trying to build their own tech organization by hiring IT talent not to mention the startups with the x-tech (fin-tech, edu-tech, med-tech, etc) companies.

To add to that, technology isn’t getting any easier to deal with. There’s an explosion of tools, frameworks, languages even paradigms, that technologists have to deal with. The only meaningful response for them is to specialize in a subset of these technologies.

As you can imagine, there’s fierce competition to acquire the limited talent pool of really good technologists.

Competitive advantage in the talent business

Money can only take you so far in this competition for talent.

With plenty of options to choose from, good technologists are looking for more than just making lots of money. As Daniel Pink describes it, what really drives people (not only technologists) is mastery, autonomy and purpose and so the way to hire and retain good talent is to create a culture that clarifies and aligns organizational and individual purpose and enables mastery & autonomy.

Simply speaking, going back to the sausage factory analogy, it is not enough to bring technology closer to business but it is equally important for the technology talent to understand “why” we are creating sausages and for the business to understand “how” sausages are made and for everyone to engage in the dialog of whether “sausages” is the right way create value for end users or should it be “pancakes” instead.

This means that the enterprises are going to go through a double shift. They will need to understand the technology but they will also need to understand and establish the culture that let’s technology prosper. If you hire a bunch of top technologists but keep measuring them on the same criteria as before, its going to make little difference to your business.

Easier said than done

This is a very difficult transformation for most enterprise businesses. It is long, it is difficult to measure objectively and it is extremely nuanced.

In the next few articles, I aim to elaborate on some of the big drivers and hurdles in such transformations.

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