Surfing is easy. You watch the waves and catch the right one, get up on your board (platform), and pick up speed going vertical. You then cut across a wave until you can bottom out—a horizontal turn, which you do again and again. The better you learn to bottom turn, the better you maneuver the wave, and the better you’ll surf on the next wave and the next. Like I said, digital transformation is easy.
I grew up in the surf, spending my summers in Surf City, NJ on Long Beach. There are a few obvious surfing lessons that could be reapplied to a Digital Transformation effort, but let’s review the main one: too much verticality is bad. Going horizontal is good.
Twenty years ago, businesses were built on stability. Organizations were structured to optimize vertically—Sales, Marketing, R&D, Engineering, Manufacturing, and in many cases, it was ship-and-forget. Technology was used to modernize these silos to keep our siloed users satisfied.
While we may have seen an increase in individual productivity, the use of technology had little impact on business. We added more and more PLM (mostly PDM), plenty of CAD, ERP, CRM, and a lot of automation to improve how discrete manufacturing organizations used technology for incremental vertical change.
These types of vertical improvements have continued and will continue indefinitely, and have proliferated systematically, as managers and directors have been rewarded for this behavior. The resulting siloed organizational cost-cutting and short-term efficiencies gained create a loss of focus on what should matter most—the customer.
"It's all about where your mind's at." – Kelly Slater, champion surfer
With this existing state of mind, customers benefit in only minor ways, as few groups within the organization have access or direct links to customers and the information generated by them. As a result, there are often only incremental improvements to products, such as gains created through product design that make a product more price competitive, adding features to make the product cheaper to operate, or adding features that “hopefully” apply to many requirements/use cases. In all, the strategy is to build a “better mousetrap,” but the lack of data availability inhibits a deeper understanding of customer requirements. The inability to see and use data horizontally across siloed domains hampers the collaboration and flexibility organizations need to make data-driven decisions and react quickly and decisively.
This blinded view fosters a legacy way of thinking and an inability to react to changing market conditions. It allows competitors inside and outside the industries they serve to disrupt, seemingly coming out of nowhere, delivering products and services that seem ahead of their time, yet map to the needs of the customer.
The stability created by both technologies and vertical processes, once the stable of most organizations, has become a liability—the barrier to digitally transforming horizontally across organizations.
Despite many years of attempting digital transformation, the rate of success remains around 30%. Much has been written about the barriers to successful digital transformations. One of the major obstacles is transforming across vertical, organizational, and data silos—going horizontal.
Alignment Across the Leaders
It should go without saying, if business leaders aren’t aligned with the same transformational goals, then they’re hardly working on the same team, and, in fact, are likely working against each other. One of the biggest challenges in going horizontal is alignment. The CEO may have made it the company’s top priority, but they have also incentivized the top executives with a set of vertical goals and objectives that are likely in conflict with horizontal transformation. The average manager and their direct reports want to get their business-as-usual work done. And to be fair, many have seen these digital transformations come and go. So, perhaps the biggest challenge is gaining alignment at the top of each vertical silo. There are many ways to do this, such as using cross-functional teams, but the power has to shift toward any horizontal transformational movements.
Playing “Telephone” With Your Digital Thread
Without the right information, we base our assumptions on perceptions as if they’re facts. We make our decisions based on what we think we know, though these are often gut decisions based on past realities. Understanding what must change is important, but even more so is understanding why. If you can understand why, you can inspire people to follow. Given the obstacles every working person faces—trying to get their work done—the reason why we transform needs to be clear and compelling.
Without that understanding, it’s more like playing a game of “Telephone.” Whisper a message to the person beside you, and they pass it on to the next person in the chain, and down it goes, until the message gets back to you, mangled into something else entirely. It doesn’t matter if everyone in the chain fervently believes they are acting in unison—the message simply will have passed through too many filters to stay intact. Depending upon how complex your legacy infrastructure is, this might also describe your digital thread or lack thereof.
Strict verticality creates organizational silos, which ultimately become data silos, stifling the flow of information across the chain. A more horizontal approach, then—say, a megaphone—is needed.
It’s therefore critical to have everyone be able to articulate why we, as a company, are transforming our processes. This is the only way successful organizations permeate the vertical silos at all levels. Rather than hoping the message trickles down the chain to everyone, it’s much more reasonable to make the effort to see that each leader’s goals are aligned with the company’s transformational goals.
Underestimation of Data
Data is accelerating at a pace that most companies cannot keep up with. Most organizations have severely underestimated the power of data and emerging innovative technologies.
In the 1990s, IDC estimated that 1.2 zettabytes of new data were created. By 2020, it had grown 44 times. By 2025, they predict 175 zettabytes of “new” data being created. Years of vertical modernization without consideration of how to use data horizontally across your organization has resulted in most companies using just a small percentage of their data in processes that cut across vertical organizations.
Companies need to bottom-out and weaponize data, using it horizontally across silos to drive efficiencies, make better data-driven decisions, and be more collaborative across domains, throughout the product lifecycle and with their extended supply chain and customers.
This is where a resilient platform—a connected digital thread—gives you the flexibility to see more data, make better decisions in a more collaborative manner and pivot quicker.
If organizations don’t get out in front of this tsunami of data, it will collapse on them. Wipeout.
Empowerment
Change is happening faster and faster, and will only continue to accelerate, much like the surge of a wave behind your board. Your team and team of teams need to be empowered to change across a platform that can change with you. This will require moving away from steadfast top-down verticality to horizontal network organizations where people at all levels are inspired to make transformative decisions rather than simply follow along with business-as-usual. Agility, flexibility, and a readiness to pivot aren’t qualities of people who feel rigidly locked in place by bureaucratic red tape and extreme risk-avoidance. People comfortable in their silos are people hesitating as the wave of change crashes over their heads.
Real Transformation
Many transformations are not actual transformations, but discrete, disconnected projects that change something with a vertical benefit. You could, for example, do a big migration project to upgrade or replace an ERP, PLM, or a consolidation, and achieve some benefits. But those are IT projects with only vertical benefits—unless you’re using data horizontally across an organization to change the way you work so that it impacts how you interact with customers. They’re not necessarily bad, but they’re not transformative. Did your product change? Did the interaction with your customers change? Were your processes up and downstream changed?
To be truly transformative requires not just organizational change management, but the flexibility to adapt midstream—quickly bottoming out, but with resources and collaboration that run across organizational boundaries. If you’re waiting for someone to tell you what to do, you’re going to wipeout. A surfer has no choice but to look ahead while everything is crashing behind and around him. Digital transformations are like that—they require momentum, flexibility, and cross-functional collaboration, all while looking ahead.
Catch a wave and pick a good board—an Enterprise Digital Transformation Platform