This newsletter struck me. There is a slow gradual change in the “mindsets” for digital transformation. I am not sure if the word disruption applies here. I for once don’t see a meaningful change in the actual “levers” of the transformation. Everyone else is waiting for the other to take a stab at it.
Organisations are designed to create and maintain stability. They are designed to actively resist change in favour of stock prices and employee retention. Because the structures and systems they have in place are not designed to change, they struggle to keep pace with digital transformation across sectors, industries and all of society. When technology changes quickly, organisations change slowly, and mindsets change really slowly, we get what Stewart Brand from the Long Now Foundation, calls pacing layers. If we wanted an imaginary timescale to visualise the different layers we could say technology changes in a matter of years, organisations take decades to change, and mindsets last for centuries. That’s the kind of difference in scale we’re talking about, and that’s why change doesn’t occur on a schedule. Digital transformation has to happen across all three layers, and that takes longer than we’d like.
What is required for the digital transformation? Data? Well, that occurs in buckets. The sheer lack of structure makes it difficult to run it for “analysis”. No one has taken a clear shot at the electronic medical records, or at least provided a template for health records. I have seen start-ups go after the lowest hanging fruit of “wearables” or try to gauge repetitive habits of chronic disease sufferers by adjusting the e-commerce B2C model (business to consumer). It won’t provide a “holistic modelling of health-seeking behaviours” because the mindset is curated towards seeking “discounts”. I have read accounts of millions of dollars going up in smoke for customer acquisition but healthcare is not a “created-need”. An individual seeks a medical prescription only if there is something seriously wrong. For everything else, new-age companies are creating “convenience moats” without pushing individuals towards “better health”.
Precisely, that explains why legacy organisations don’t want to invest in “digital health” because it doesn’t have a ROI model attached. New age start-ups can’t invest in high gestation projects like hospitals (brick and mortar structures) to remain asset-light. Can they partner, then? Well, no. They are catering to the same patient pool, albeit with a focus on different spectrum of their needs. Digital transformation will require patient capital and burning both ends of the candle.
The author poses an interesting question:
All of which leads us to an interesting question: If there’s no productivity benefit for organisations because new technology does not lead to more output, and change is so difficult because organisations are designed to be stable, then why are so many companies trying to digitally transformation themselves? Do they even know why? Is digital transformation a fools errand of outdated organisations trying to keep up? Just as we see new technologies replacing old, is the only way for digital transformation to occur for new organisations to replace the old, and for new ways of thinking to replace outdated mindsets?
Food for thought.