Purpose Must Drive Digital Transformation, Not Policy.

Posted on Posted in PwC Chair in Digital Economy

The digital age has forced organisations and governments to reconsider their purpose and operations. As a result, an increasing number seek advice on digital transformation. At the Chair in Digital Economy (the Chair), we work with organisations and governments to rapidly reimagine and reshape strategic opportunities in the digital economy. A common issue across our digital transformation engagements is the seeming tension between policy and purpose. This tension impacts the end-to-end transformation process, from its justification and objectives, to quality of identified future state and success of implementation.

Too frequently we encounter a misunderstanding of what digital is, what it can enable, and what should drive digital transformation. Particularly within public institutions, there are often knee-jerk deflections to existing legislation, policies and edge-case scenarios — leading to incremental change, rather than the transformative change required. Whether intentional (to retain control) or unintentional (lack of awareness), this reflects the belief that existing policy and legislation should be the core focus of any transformation. Yet, we argue the focus and driver of a digital transformation should be purpose, with the aim of achieving transformative change (breakthrough innovation). Fundamentally, transformational change comes from reimagining purpose and operations to capitalise on the opportunities afforded by technology (termed digitalisation). A transformational focus allows organisations and governments to ‘leapfrog’ today, ensuring resilience tomorrow.

Using policy as a focus for digital change is similar to driving a car by looking in the rear-view and side-mirrors, focusing on the past and the now. It involves incremental changes to the driving path, being careful not to move too far or fast (incrementalism). The end location is merely a continued path derived from the previous one, as we cannot see out the windscreen. While the road (potential paths, such as new products, markets and processes) is in front, organisations/governments cannot see through the windscreen (these opportunities are blocked due to clouded/biased judgements and perspectives).Purpose, however, asks you why you are in the car, where you are headed and why you are headed there. It provides clarity of vision, operations and strategy — clearing the windscreen. By focusing on the why, purpose provides context, and enables those creating change to challenge existing processes, products, policies, legislation and objectives.

For example, if we are tasked with reviewing the resilience of communications, a policy-centered approach would help develop the “perfect” letter to send clients (ultimately wasteful and irrelevant in a digital economy). A user-centered focus would result in us sending an e-mail. But if we take a purpose-centered approach, we open ourselves to other opportunities, as we continue to ask why are we communicating, does this make sense, and does it align with our purpose (if we are sending this communication to gain information, can we proactively get this information elsewhere).

This is not to say policy should be removed from any digital transformation, it is indeed a critical part. Successful digital transformations require expert knowledge across various fields including design, technology and strategy — but policy is another required skill — that is, an understanding of how policy and legislation is created, regulated, amended, and at times, abolished or replaced. This knowledge and understanding is critical to effective transformation, particularly when the identified future state does not fit within traditional/current interpretations of legislation or internal policy.

Those possessing such policy knowledge can be powerful allies of digital change, but this only occurs once clarity on the right context has been established. It is critical staff and management in both the private and public sector understand that policy and legislation are an enabler of a desired purpose (or outcome), and should that purpose change, so must policy and legislation.

By placing purpose at the core, the Chair has been able to inspire change, reframe purpose, create new and unique service offerings, identify new markets, shift thinking and impact policy and legislation across numerous organisations and governments.


This article was originally published on CDE’s Medium.

Author – Michael Evans
Contributing authors — Matt McNaughton & Oliver Bolton



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