This year, all you hear and read about in regards to businesses is “Digital Transformation.” How COVID-19 has pushed companies over the edge, sped up their adaption of digital technologies, forced management to make faster decisions in regards to implementing digital processes and procedures, but personally “Digital Transformation” is just another keyword being thrown out there. The only real “fast” adaptation companies have had to make this year is their remote work policies and adapting communication and teamwork tools (Slack, MS Teams, etc.). Many other business procedures are still in the works of technological adaptation – how to automate, cut operational expenses through AI, etc. This part of the business has not changed with the onset of COVID-19. The only difference being the assessments of how to pivot quicker in regards to market demands, changing consumer behaviors, product, and service delivery with the COVID-19 environment have led to a strategical shift of the management mindset
So, in our “new” era of dealing with COVID, digital transformations are at the forefront of business initiatives, however, according to Forresters Digital Transformation report, only 22% of companies that strive for some sort of digital transformation actually achieve the expected value and relative business results. Reading through that, along with all the other media-related topics around digital transformation, spurred some thought which I have wanted to dispel for some time now and I believe that with the right planning and knowledge, businesses can develop and implement successful strategies that if sown correctly will reap technological transformations for an organizations future.
You see, products and services are designed and delivered to the market at a rapid pace, trying to keep up with the ever-evolving state of consumer and client expectations, including user/customer experience. The driving factor behind this is logically the technological advancements of big data, artificial intelligence, cloud computing, machine learning, process automation, supply chain automation, etc. – therefore companies that want to survive and thrive will need to (and as previously mentioned nothing has really changed albeit COVID-19) assess and evaluate their digital tools, business and operational processes along with their digital talent pool to continue adapting to the marketplace. The points below are my thoughts on how to achieve digital transformation – points I personally believe companies need to develop and execute on for digital transformation initiatives that achieve results.
1 . Company culture needs to be defined
This is the most important factor. All too often I read, see and hear how management simply says “we are going to be digital leaders by implementing this and that digital tool/process.” And when you look at the results of Forresters report, many companies and organizations fail in the mid to long run to actually implement digital strategies because their culture is not where it needs to be. The culture for a successful digital transformation is key.
In a study done by BCG, they noted that companies that included a focus on culture were 5x more likely to succeed in their digital transformation strategy than companies who did not. And I am not saying every company needs to have the same mindset when it comes to a digital culture – there is no “right” culture as a variety of factors play a role in the overall company culture. Personally, I believe that in order to succeed in a digital transformation strategy organizations need to break down work silos and first approach the digitalization with an open, x-organization approach with an efficiency-minded team. The employees of a business need to be empowered to think creatively, critically, innovative, communicative, and collaborate. Yes, those are all terms you will find on just about any company’s values board, however, in digital bringing aboard the employees to create that empowered understanding is key to transforming employee mindsets to adapt.
Therefore, in order to begin the digital transformation journey, leaders need to honestly look at their fundamental company culture including how management interfaces with one another and the employees of an organization. Develop a plan for the company culture to turn resistant employees into accepting ones is crucial to the overall success. Then understand how products/services are designed and delivered, along with customer interfaces, and ultimately identify how these changes would impact company culture
2. How will employees contribute
Look, having a critical look at your culture is key, yet a significant part of that which I want to extract as point number 2 are those minds that make the culture – employees. They are the lifeblood of any organization. That is why many businesses fail in their digital transformation because adoption of technology without taking into consideration the employees, or the human element is absolutely bogus (or foolish) to me.
A plan for adaption and pushing the company towards successful digital transitions begins by having a management strategy that prepares, equips and supports all individuals to adopt the new tech and organizational mindset change. Therefore once the business culture has been defined and, we need to work out where each employee fits into the bigger picture. Some are more adept to adaptation, others fear it. Some understand various tools, their upsides and lacks, other’s won’t even bother. And I know many leaders just think about throwing out those that don’t come along for the ride, but what does that again say about your culture and values? Everything is intertwined and great leaders know how to bring it all together.
Change, almost always, brings fear of the unknown and especially fear of job loss within an organization due to technology “I/we don’t understand.” What needs to happen here to avoid panic, gossip, etc. is to determine how digital transformation will benefit, empower, and continue including employees as part of the companies mission. One word – ownership.
3. Fresh talent
Digital transformation in business will most likely require workers with different skills and know-how to support a transition. Upskilling employees in basic digital terms is one thing, however, understanding the work and skills needed is imperative to identify significant ways to leverage not just new employees but the current workforce and integrate existing talent. Fresh talent can be right under your nose, however, most managers are just keen on conveying their “bla bla’s” and deliver financial results that they do not take the time to identify talents and ideas within the existing workforce because they themselves do not really understand what they are looking for.
Digital talent needs to be identified upfront. Understanding what the organization needs and why allows businesses to scale the workforce up or down to support/enhance a core team during the digital transformation process. This is where I see HR and management responsibility to use a talent platform that identifies relevant skillsets within the company and allows a business to utilize internal or external talent “freshly.”
4. Assess customers, competitors, trends in the marketplace, and business goals
Digital transformation is not solely about implementing robotics to improve the process. Congrats, well done on the cost savings. That to me is just not the cherry on top. True digital transformation goes back to the roots and has companies revisit market trends, market sizing, and carry out competitor analysis. Why?
Well, look at the current pandemic. It’s a great example. Companies have finalized their sales and marketing plans, operating plans, strategic plans, budgets for the quarter, etc. and then all those assumptions in 2019 changed nearly overnight due to COVID. Now suddenly everyone is scrambling to cut costs, save here, optimize there, and yes adaptation is needed for financial success, however, digital transformation is about aligning business objectives with up-to-date data on current and future needs. Digital transformation is not just about process enhancements utilizing AI software, it’s about identifying gaps, inefficiencies, and how the “digital” can be phased in to best meet the needs of the organization and its customers.
So assessing the overall needs is critical to a successful plan. Understanding the scope of digital disruption in businesses served markets and verticals including potential new ones are important in the plan, along with how they will change the customer experience, the hurdles that come along with it, and the tools needed – may potentially not be appropriate at this time. Even if it means “becoming more digital.”
For instance, you may have a service for customers who ultimately are not happy with innovative technological advances and may not be ready to accept an automated customer interface. However, this does not mean that a non-customer facing digital transformation is not required to streamline a process to bring products and services to the market more rapidly and efficiently.
5. Trial and error. Testing.
Over the years I have had experiences where management looks a digitalization and comes across the “answer” and that “answer” now becomes the only “true answer” because they understand it, it does what it needs to do and it delivers efficiencies. However, this goes back to culture and employee talent. There are more ways than 1 to execute something. I believe that establishing a digital platform that allows for pilots, trials, and result analysis is best when it comes to digitalization. This allows a core digital team to evaluate, your tech-savvy employees to evangelize, and employees to enhance their knowledge and skills before completing a digital transformation in a specific area. On top of this, it is impossible to evaluate and anticipate every scenario before digital execution. Tests, pilots, and trials will uncover the things businesses and people (of any background) do not expect (or simply don’t know).
6. Slow & steady
Often times, digitalization fails because of the inability to scale digital innovations. This can be for several reasons – like technological shortcomings, fast-paced roll out because of management, etc. When businesses begin transformations, employees may be subject to greater workloads and higher stress levels. And believe me, I get it when it comes to P&Ls and cost efficiencies, I’ve been in operations for quite some time and I love optimizing, but in this case rather then massive overhauls, I believe a multiphase slower rollout will cover point 5 above, and allow for a better more effective adoption and understanding of the nuances of a new workflow. This will help identify gaps in processes and overall operations to initiate changes, enhance the ability of an organization to revector or shift resources as needed.
The problematics in business is management always seeks complete perfection from the get-go. Don’t get me wrong, I do not want to try to describe a utopia here. These thoughts are realistically implementable when it comes to digital transformation, yet it all boils down to how leadership interprets and conveys the idea, message, and execution. Organizations will stumble and fast-paced delivery will cause problems – again adaption in a certain process is not what I am discussing in this article – it’s about the overall digitalization of a company. If Elon Musk waiting on long, slow multi-phased roll outs we probably would still be waiting for the first Tesla to be built.
The message here is things constantly evolve, change is everywhere, from tech to markets to customer demands. Embrace it and adopt a company philosophy of continual learning. Remain flexible and foster an atmosphere of creativity. Allow employees to challenge the status quo in a productive, positive fashion, being allowed to take risks and experiment, seek feedback as management, and stay open to new ideas.
At the same time don’t get caught up in the “newness” of something or chase a market hype. The ability to continually learn, re-evaluate, and innovate can take a company from surviving to thriving. You’ll need to stay ahead of the curve, but thorough analysis and carefully planned digital transformation roadmap could potentially deliver significant rewards and keep your business viable in both short and long terms.
That to me is a pure digital transformation. Culture, employees, and an actual understanding of the tools end result.