The Prime Minister is doing what many Australian companies have failed to do, putting digital transformation at the strategic core of government.
The original of this article appeared in Australian Financial Review
The Prime Minister has made a great show of consulting business and is fluent in all its buzzy phrases. But this is not a government swooning passively into the arms of the economic doers. Turnbull has cast himself as the new CEO of Australia and feels among peers with the captains of industry. He is set on bringing government into the 21st century. And he's doing what many Australian companies have failed to do: he is putting digital transformation at the strategic core.
The appointment of Paul Shetler, CEO of the federal government's Digital Transformation Office, preceded Turnbull's ascendancy by a hair. But this will be immaterial to whether Turnbull can claim credit for Shetler's successes. Like any good CEO, it is Turnbull's job to contribute by clearing the way and allowing his executive the room to deliver, while holding him one hundred per cent accountable for results along the way. If Turnbull does his job, there is no reason to believe that Shetler won't do his. With an impressive track record of effecting massive change in the UK government, Shetler has both the technical know-how and experience with intensely complex systems.
As government gets its act together, businesses which have failed to realise digital transformation should take a moment for introspection. Australia has the second highest number of chief digital officers per capita yet according to PwC's most recent Annual Global CEO Survey, Australian companies' digital readiness lagged well behind the top-ranking multinationals. This has significant ramifications for the economy overall. Earlier PwC modelling suggests that building an ecosystem based on innovation and digital technologies has the potential to raise GDP by 3.5 per cent over the medium term.
The excuses which businesses use to explain why they can't transform themselves will ring hollow as the immensely complex machinery of government makes headway.
One of the most common excuses offered by business is excessive complexity. If you ever want to find out whether a company is serious about lean and agile processes or is just hiding behind buzzwords, ask about their approach to tackling big data. The jargonistas still believe in extended preparation, which they will blame on complexity. Meanwhile, genuinely agile organisations are biting off small chunks and achieving results iteratively. If business thinks it faces complexity, it should have a look inside government. Departments like Centrelink don't talk about statistics, because their data is not representative of the population, it is the entire population. In the face of this, Shetler has flagged his intention to launch a few "quick, brilliant and convincing deliverables" – the definition of an agile approach.
Another excuse we hear a lot is that business feels shackled by outdated technology that will take years to replace. In the meantime, they argue, digital transformation is impossible. Shetler points out that governments across the world are struggling with their legacy systems and acknowledges that they are not the only ones. But he warns against a "rip out and replace" approach, as it's so easy to get wrong. If government can run tests within their existing systems, there is no excuse for business not to. Manual work-arounds are entirely adequate for undertaking small tests. When a test is successful, it can be scaled, so you're only investing in confirmed winners.
The CEO of the DTO will also rob business of the right to claim their teams don't have the capacity to undertake digital transformation. Working with a public service which has been subjected to years of productivity dividends and natural attrition, Shetler sets timelines tighter "because it forces people to make decisions and produces quick feedback loops", counteracting bureaucratic drag. Shetler understands that the best internal engagement tool is a quick win.
None of this is to say that business doesn't face enormous challenges implementing digital transformation. But if the complexity, inertia and bureaucracy of officialdom can be overcome, there are no more excuses for business to hide behind. CEOs who truly believe in the strategic centrality of digital transformation to the businesses they lead – and over 80 per cent told PwC they do – must act.
After all, it would be highly embarrassing for business if Turnbull were to transform the federal government into a more agile beast than his pals at the BCA have managed to make their private-sector companies.