Living in a period of digital revolution leading to fundamental change of our lives, it is possible to forget that there have been previous periods of substantial business transformation, especially during the previous industrial revolutions. While we are familiar with contemporary digital disruption, for example in retail, logistics, service and many other sectors, we should not lose sight of the fact that previous generations have also experienced disruption.
Disruptive projects are not those that have optimised business processes: rather they are those that have changed or eliminated these very processes (Hammer and Champy 1993). We are not talking about projects that have improved CD quality when streaming is taking over, but those that have (for example) called into question the need for CDs in the first place. The success of Uber cannot be attributed to the provision of an improved taxi service but to a transformed approach to transport and logistics. The Stockton and Darlington Railway started as a quicker way to move coal across land to the sea but ended as a new way of transporting people between towns, and thence to major economic and social change in the UK and internationally. The Transcontinental Railroad reduced the time to cross the United States from 4 months to 4 days, and had a massive impact on the US economy. The Manchester Ship Canal, whose purpose was to optimise the transportation of goods from Manchester to the sea, led to the creation of the worldâs first industrial park leading to substantial disruption. These projects have been chosen as case studies for this book because each has in common (1) this change from optimisation to transformation (2) the role of project management in this change and (3) the volume of evidence available to us today. The fact that all three are concerned with transportation is not coincidental since changes to physical transport in the nineteenth century had a similar transformational impact to changes in digital âtransportâ in the late twentieth/early twenty-first century.
The timing of such projects is vital, but their success is not due to luck or to vision alone. Behind all successful projects lies effective project management. Interestingly, however, academic analysis of what constitutes the effective management of these projects is very difficult to find. Even harder to find is any notion of the contemporary relevance of historical disruptive projects. It is our argument that there are significant lessons to be learnt from these projects from previous generations. The agility of projects from previous industrial revolutions is directly relevant to todayâs digital revolution. Project management is not a discipline that was founded in the twentieth century but a method of organisation that has evolved over thousands of years.
Furthermore, the analysis of contemporary business transformation is very limited in both the academic and professional press. Despite both the stunning successes and the substantial failure rate, the investigation of contemporary major disruptive projects is largely absent. The Project Management Bodies of Knowledge are dominated by process models, and the academic journals and programmes of study are dominated by operations management. The fundamental difference between project and operations management is that a project is by definition led by a temporary organisation which might subsequently change the established organisationâs operations. Professional publications witness the digital revolution but provide little understanding.
The lessons of transformational projects do not fit within this discourse. Not only do transformational projects (in the words of the Agile Manifesto) ârespond to change rather than following a planâ, they create the change. We believe that an analysis of transformational projects from the past can uncover how this came about. The digital revolution is just another industrial revolution driven by emerging technologies, like those in the past with the steam engine or electric dynamo/motor, but with possibly an even greater impact to society. While we do not set out to examine contemporary digital projects, this book can shine a light on the present and help to address the gap in our knowledge about the project management of the digital revolution.
The Difference Between Transformation and Optimisation
Organisations are today facing a digital revolution that brings opportunities and threats and are transitioning to new business models. Project management through transformational projects is playing a significant part in this revolution. This practice is largely conducted without reference to research or historical background. These projects are qualitatively different from projects aimed at optimisation or improvement.
According to Gartner (Prentice
2017):
Digital business transformation is an effort to create connected platforms and new industry revenue streams. It is a type of digital journey that has the ambition of pursuing [completely] net-new revenue streams, product/services and business models. It is favoured by enterprises that must adapt to an industry in disruption, or ones that want to disrupt their industries.
Also from Gartner (Waller
2017):
Business transformation is complicated, involving a constant tug-of-war between strategic vision and operational execution. One canât succeed without the other, yet few of us are comfortable in both camps. Digital business is a disruptive transformation thatâs not possible to achieve without the visionaries among us willing to push the boundaries of whatâs possible without sweating the details.
This is in contrast to digital business optimisation which is a type of digital journey that has the ambition of significantly improving existing business models through improved productivity, greater revenue generation of existing business streams and improved customer experience. It is favoured by enterprises whose industries are not going through disruption in the near term (LeHong 2017).
Based on these two definitions, some of the key characteristics of organisations undertaking these are:
- 1.
Digital business transformation typically is led by start-ups, or newcomers (or those born digital first) that are driven by entrepreneurs. They are light on business processes, willing to take risks, make investments, innovate and explore technologies. According to Taneja (2019), Facebookâs Mark Zuckerberg motto and often repeated mandate to his staff is âMove fast and breakâ.
- 2.
Digital business optimisation typically is led by existing organisations, traditional industry companies (or those born before the digital age) that are driven by competitive threats. They have a lot of business processes, and are less willing to take risk and make investments, constrained by process to innovate, explore technologies.
Established organisations that are late-comers to the digital age may be forced to change their business processes and models from ones designed to optimise the existing to those designed to explore and exploit the new. On the technology side, these changes will be substantial in the number of systems and applications to support in its current operations. Gartner Digital Business Survey (2018) finds 90% of traditional businesses are not yet transforming to digital business. Rather, they are pursuing digital optimisation, suggesting that the CIO and business leaders have not yet received board commitment to introduce new innovative digital products and services.
Right Conditions for Change
According to Gartner (Waller and Raskino
2017) technology disruptions in an industry have three tipping points: technology, culture and regulations.
To take digital to the core of the business, CIOs, CEOs and digital strategists must track when culture, regulations and technology are ripe for innovation â the triple tipping point. Moving too soon or too late wastes money and harms the brand.
Technology provides the digital business opportunities. Optimum timing is based on ensuring the emerging technology is mature enough to be robust in operation and provide the business value to put ahead the company ahead of its competition. The company may have to innovate the technology to adapt it to the industry and create products that meet market needs. It is likely a combination of technologies is required where some of these could be highly specialised.
Cultural change can be highlighted by the differing approaches to the adoption of self-driving cars and according to Gartner (Waller and Raskino
2017):
General Motors (GM) will invest $500 million in ride-sharing firm Lyft and develop autonomous vehicles where early cultural adoption will come more readily from ride-sharing services rather than car owners. By contrast, Volv...
