The cult of the cargo ship of digital transformation

by bold-lichterman

Software devours the world. This is also true in the automotive world. More and more, a car is going to be a computer on wheels. Manufacturers seem to have understood this, and are hiring computer scientists to keep up with the “digital” time. Many large companies in all industries are in the same situation. However, will they be able to transform to this point? We can doubt it. Hiring several thousand IT specialists does not make you a digital company …

Are large companies facing the great digital disruption followers of the cargo cult? The cult of the freighter designates a set of rites that appear at the end of the 19th century and in the first half of the 20th century among the aborigines, especially in Melanesia (Oceania), in reaction to colonization. It consists in imitating the American and Japanese radio operators commanding supplies (distributed by cargo plane) and more generally Western technology and culture (means of transport, military parades, clothing, etc.), hoping to obtain the same effects. (abundance of goods). Ignoring the factories of production and manufacture, the natives believe that these goods are delivered by the supply freighter.

We can’t help but think of this cult when we observe large companies reacting to the digital disruption by hiring massive numbers of IT specialists, data scientists and other geniuses of the “new economy”. This is how the Renault-Nissan group has just publicly announced the hiring of “hundreds” of computer scientists to develop future connected cars. Clearly, the group recognizes the urgency and importance of reacting to the changes underway in the industry. But will this be enough?

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Ogi Redzic, responsible for connected vehicles at Renault-Nissan, indicates that “As cars look more and more like telephones, Renault-Nissan must look more and more like an IT company”. Isn’t that an illusion?

To find out, let’s take a step back and consider the experience of Nokia, a leader also confronted with the sudden eruption of software in its industry in 2007, and which did not survive it.

Nokia has always had a large number of software engineers. But Nokia was never a software company. It was first and foremost a hardware company, leader of a world where the telephone was complicated hardware and where the value resulted from an ability to design a radio-electronic device, with a software layer to make it work. . The launch of the iPhone in 2007 marks the beginning of a change in which, from now on, the mobile telephone is above all a software platform, which is based on a radio-electronic module. We are moving from a culture of hardware to a culture of software. The term culture is important here, because it is a radically different way of thinking. It is not surprising that, as soon as the telephone becomes an object above all software, it is the big software players who take the leadership (Apple, Google). Nokia’s great drama was not to ignore the importance of software – again, the Finnish leader employed thousands of programmers, but not to be a software company. Put another way, recruiting thousands of programmers doesn’t make you an IT company. The heart (mental model, business model, identity) does not change, and that is what matters. You can’t “look” like an IT company; we are one or we are not!

All the large companies which nowadays swear by digital or big data by hiring thousands of engineers too, they make the same mistake: they repaint the walls, but the model remains the same. They recreate the computer rites (Ah the table football in the reception hall, I just saw one again in one of the least innovative societies that I know!) Hoping to reproduce the same effects, like the aborigines of Oceania forty years ago.

When Renault got into the car low-cost with the Logan project, Louis Schweitzer, CEO at the time, understood that the project was disruptive. Faced with internal hostility to the project, he had isolated it far from the head office, at Dacia,… in Romania, so that it could build its own model: resources, processes, values. Dacia’s resounding success shows that car makers can successfully deal with a disruption, and that if they want to succeed with the software-car disruption, they had better follow Dacia’s lead…

… And to reflect on the lesson of Nokia: the autonomous car, the software-car, or connected, whatever the name we give it, is disruptive. It also requires a different business model, a different approach, a different culture, different values, different resources and especially different human resources. It is not within the existing structures that it will succeed, even if we will be keen to try.

Failing to understand it, manufacturers run the risk of unpleasant surprises, including Tesla, capable of developing a radically new car from scratch or almost in a few years, which GM had been trying to do for twenty years, is not. than the first.

Source Wikipedia for the cargo cult. The article on Renault-Nissan here.

We can compare the shortcoming mentioned here with that of the “organizational jamming” that I mentioned previously, which consists in ‘forcing’ a breakthrough innovation in its existing model, rather than recreating a relevant model around it. breaking. See the article here: ” Organizational jam“.

Article originally published on Philippe Silberzahn’s blog

Philippe SilberzahnPhilippe Silberzahn is professor of entrepreneurship, strategy and innovation at EMLYON Business School and associate researcher at thePolytechnic School (CRG), where he received his doctorate. His work focuses on how organizations manage situations of radical uncertainty and complexity, from an entrepreneurial perspective with the study of the creation of new markets and new products, and from a managerial perspective with the study management of disruptions, strategic surprises (black swans) and complex problems (“wicked problems”) by large organizations.