From Strategic Initiative to Strategic Imperative: Digital Transformation According to Karim Michel Sabbagh
This is part of our Dialogue on Digital Transformation series, in advance of the upcoming 2020 Network Readiness Index.
Karim Michel Sabbagh is a global thought leader in digital transformation with a long track record as CEO, investor and advisor covering space-based multi-orbit comms networks, terrestrial comms networks, ultra-secure comms, cybersecurity, AI and applied analytics. Most recently, he was CEO of the DarkMatter Group; Sabbagh was also the President and CEO of Société Européenne des Satellites (SES). Additionally, Sabbagh is a visiting Professor in Tech and Innovation Management at the Ecoles des Ponts Business School, and sits on the Board of Advisors for Portulans.
For Mr. Sabbagh, the key takeaway is that “digital transformation in the time of COVID-19 is unprecedentedly accelerating, increasingly disrupting, and constantly evolving as new internal and external factors reshape its trajectory (…) In this new normal, the status of digital transformation is being elevated from strategic initiative to strategic imperative..”
Portulans: Tech readiness and innovation are powerful tools to achieve the UN Sustainable Development Goals. Can you share any examples or best practices for leveraging tech to achieve the SDGs?
Mr. Sabbagh: Four innovative cases come to mind when thinking about digital transformation supporting SDGs. These stem from start-ups I’ve been exposed to directly over the past 12 months, and each one of them through tech-centric innovation and disruption is making its marks vis-à-vis a specific goal.
- Goal #3 (Good Health and Wellbeing): Allurion (www.allurion.com) is providing an innovative approach to deal with obesity by leveraging technology. At the centre of the programme is a revolutionary soft balloon that creates a feeling of fullness in the stomach. The approach is supported by a 6-month dietary support plus tracking through digital to enable life-long transformation
- Goal #4 (Quality Education): Aanaab (www.aanaab.com) is providing professional development programs and certifications to teachers through an online learning platform. Its single-minded focus on educators in the Middle East and its digital business model is enabling it to expand rapidly and positively impact the skills and knowledge of the teaching corps
- Goal #10 (Reduced Inequalities): rise (www.gorise.co) aims to serve the 250 million migrants who support a billion people and are an engine of economic growth globally by providing them access to banking services. Through its proprietary digital platform, it brings essential financial services from their home and host country on one platform. The end results is to put migrants in charge of their finances seamlessly
- Goal #12 (Responsible Consumption and Production): Winnow (www.winnowsolutions.com) is tackling the challenge of food waste through AI technology. It is targeting commercial kitchens and provides them with always-on information as to exactly what they’re putting in their bins. The end goal is to help the food service and hospitality industry cut down on food waste by making the kitchen smarter.
Portulans: What leadership and culture is required to achieve this and ensure digital transformation does not exacerbate the global digital divide?
Mr. Sabbagh: At the policy-making level, digital centricity must become de rigueur along with the proper safeguards. The essentialness of digital would become a national priority until the society and economy under transformation reaches an adequate level of maturity. Estonia and Luxembourg are good cases in point of government-led leadership and culture to drive digital transformation in an inclusive manner.
In the case of a private enterprise, leadership and culture would put digital front and center. This would start with the ways of working, how policies and processes are designed to best leverage digital capabilities, and how investments in future capabilities are prioritized and executed. In other words, digital is an integral part of the management agenda as opposed to a fringe transformation program dictated by unique circumstances.
Portulans: Related to this, how best should firms and governments build a supportive ecosystem for digital leadership, leveraging technology, governance and people for impact?
Mr. Sabbagh: The first tenet to achieve digital leadership is for decision makers to be clear about the objective, what good looks like, and how to measure success. Again, the challenge is to elevate digital from a functional enabler status to an essential capability in the organization. This may be far more difficult to achieve in incumbent environments than it is in new institutions as legacy models would de-facto resist the incoming transformation and disruption.
The second tenet would be to embrace a “hard conversion” to a digitally enabled ecosystem, and literally eliminate the optionality of “soft conversion”. Along the way, business processes, ways-of-workings, technology infrastructures, and other components of digital transformation would need to evolve rapidly. And, leadership in this context would be to drive this movement, allow for adaptation as needed, and possibly use emerging crises to accelerate the pace. COVID-19 is in fact serving as a magnifying glass as well as an accelerator of digital transformation.
Portulans: Has your organization’s digital transformation strategy changed due to COVID? In which ways has the pandemic kickstarted digital transformation in your sector?
Mr. Sabbagh: Unprecedented acceleration better describes the digital transformation experience that most institutions are going through. Starting with the end outcome, productization of the value proposition has now integrated digitization at its core (e.g., delivering professional development content to teachers, providing financial services to the unbanked, conducting automated and continuous cybersecurity assessments).
In doing so, management teams are radically revisiting their business processes to eliminate unnecessary friction and inefficiencies, optimizing work-steps and information flows, and in fact markedly improving productivity. In this new normal, digital transformation status is being elevated from strategic initiative to strategic imperative.
Portulans: Where has this momentum for digital transformation come from?
Mr. Sabbagh: Three elements were central in supporting the momentum of digital transformation during the crisis. First of all, transformation was already underway with a core objective to eliminate process frictions at the development, distribution, and servicing stages of the business
One of the key objectives was to automate many – if not most – of the touchpoints with customers, and this proved to be essential during the crisis. And another key tenet of the transformation was the delivery of products through an “as-a-service” mode, pushing out the need to deploy on-premise hardware and managing it as such with all what it entailed in terms of physical dependencies
Portulans: Does every organization need to be digitally transformed to survive COVID-19?
Mr. Sabbagh: The short answer is yes, and the approach could yield incremental, transformational, and/or disruptive dividends. The COVID-19 chapter has served as a magnifying glass and accelerator of this movement. In the context of the education sector, digital transformation brought incremental benefits that are now deemed essential. The question is how this new factor will transform the sector in the long term. In the case of cybersecurity, digital has transformed the reach and impact of related services. Organizations had to move during the crisis from a long-entrenched practice of rule-based management of a finite inventory of risks to a more adaptive model that leverages cognitive technologies to cater for a constantly expanding threat landscape.
Finally, in the disruptive chapter, the over-the-air-software-updates of Tesla (I’m both a customer and investor) presents a formidable digital capability that is re-framing the value proposition in the industry. If anything, the COVID-19 experience has premiumized the importance of this capability as Tesla’s maintenance was done over the air, overcoming the obvious constraints of economic lockdown; conversely, servicing capabilities for the rest of the industry was markedly hampered.
Portulans: What could we learn from the first wave of COVID-19 for the future?
Mr. Sabbagh: There are three key learnings from the pandemic. Digital transformation is everyone’s objective and way-of-working. Additionally, digital transformation must be underpinned by business process transformation – in other words, digital must not attempt to perpetuate an obsolete modus operandi. Finally, digital ways-of-working will increasingly demand greater horizontal and vertical integration as business resilience takes center stage
Portulans: Looking ahead, how could we leverage digital transformation to rebuild more inclusive, diverse and equitable economies and workplaces?
Mr. Sabbagh: First, digital transformation can be leveraged by redesigning the business processes and ways-of-working that may hamper inclusiveness, diversity and equity in a social or economic context. By way of example, availability of information and knowledge, transparency, security, and mobility are some of the levers that can be markedly transformed for the better under a digital agenda and enable as a result the workplaces and cities of the future.
Secondly, digital transformation can play a central role in re-wiring the culture of an institution or society towards greater propensity for improved participation, decision making, and accountability in execution. To illustrate, discourse and action can evolve from a small and self-constrained circle to a broader and more participative model that could yield better outcomes across different time horizons.
Thirdly, digital transformation has the potential to democratize access – in the broadest sense – across different strata in societies and economies. This may include for illustrative purpose education, healthcare services, financial services, professional opportunities, and social groups to name a few. The idea is that digital can go a long way in removing the barriers of geography, gender, race, legacy regulations, and other discriminators that have fostered the conditions for asymmetrical access.
Portulans: How could digital transformation help fight unemployment in a post-Covid world?
Mr. Sabbagh: Digital transformation can go a long way to mitigate the risks of unemployment. Its first lever is the ability to support and deliver reskilling programs to a large section of the workforce. In parallel, the unprecedented possibilities of digital can be put to use in order to redesign underperforming business processes and focus the workforce on value adding tasks that may become location agnostic. Going digital can help efforts post-COVID to redesign the physical workplace and create in parallel the sustainable virtual workplace. Finally, this transformation can elevate practices around information flows, knowledge transfer, and collaboration in a way to create more inclusive communities.
Portulans: What is the role of reskilling, upskilling or lifelong learning in becoming a future-ready society?
Mr. Sabbagh: Reskilling, upskilling, and lifelong learning are and will continue to be for the foreseeable future essential ingredients of the digital transformation journey. The main objective is to ready today’s and tomorrow’s workforce for the jobs of the future.
Some of the future jobs could represent a linear evolution of today’s functionalities, e.g. in-class vs. remote teaching. An event such as COVID-19 is serving as an unprecedented accelerator: a case in point is the unsurpassed rise in some countries of online professional development programs for school teachers, as they come to grip with the realities of social distancing.
Another category of future jobs could represent a new paradigm in specific economic sectors, and where reskilling, upskilling, and lifelong learning would be critical. The case of cybersecurity comes to mind as the advent of digital transformations is markedly expanding the attack surface of any organization, and this requires as a result new capabilities to secure and defend the associated perimeters. The shortage of cybersecurity professionals has been echoed in public and private circles in recent years, and COVID-19 has accentuated this gap.