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Isn’t Digital Transformation just Transformation?
Digital and business transformation programmes have dominated the corporate landscape for many years now. Whilst digital capabilities have been around for some time, the notion of transforming an organisation to become ‘digital’ appears to be a constant for many business owners and executive boards.
The famous quote by Reed Markham - “if you are standing still, you are also going backwards” - got me thinking about the notion of transformation. The word transformation suggests there is an end to the process. Complete a digital transformation and your organisation will be digital.
But this isn’t true.
To be a successful digital business, you have to continually transform.
You cannot stop. Just as technology doesn’t stop evolving, digital transformation doesn’t have an ending. To be truly digital and exploit technology, you have to constantly transform your business.
John Kotter wrote in his Harvard Business Review paper ‘Leading Change: Why Transformation Efforts Fail’ that “it is the premature victory celebration that kills momentum”. Too often an organisation makes changes to its processes in order to cope with a shift in the market environment or the latest technology, only to stop and pat themselves on the back, celebrating a job well done. However, with the pace technology is evolving, organisations cannot afford to undertake a digital transformation in the hope of reaching an end point.
Goal posts will constantly be moving as technology continues to change the market environment. Digital transformation is about the commitment and culture that organisations adopt to continually improve processes and technology. Transformation takes place in people, processes and technology. People and technology do not stand still, so why should your processes?
James Maunder, Director of Information and Digital Services at the Institute of Directors (IoD), has driven a digital programme in his time with the organisation. I asked how he defined digital transformation at the IoD:
For an established business like the IoD, it’s about making sense of what digital truly means for the business and then putting digital at the centre of everything we do. Digital is defined by the opportunities and threats of powerful new technologies coming together and causing a change in customer and employee behaviour. It’s the changes in behaviour that are the key drivers for digital transformation.
James explained that there are key benefits if you focus on digital:
Digital created the opportunity to build closer relationships with customers. For organisations which want to forge closer ties, digital can make a big difference. It also enables greater efficiency through personalisation and delivering a better understanding of customers.
I ask James what he’s learnt about managing a digital transformation and it seems that culture plays a huge part:
You need technology, process and importantly culture to achieve a digital business and achieve change. Also, digital transformation should never stop. Companies should embrace change, experimentation and also failure. It’s through the failures that you learn what doesn’t work and can shine some light on what does work. The culture of experimentation is important.
The big difference now, compared to ten years ago, is that innovation time periods have gone from years to month to weeks to days.
You have to focus on agile innovation.
Chris Michael, Global Director, Digital Technology at Reckitt Benckiser, defines digital transformation as “using digital platforms and techniques to transform a business”. Chris says you need to track revenue, growth and/or cost savings, taking a mid-term view.
Ultimately there is no point unless you grow profit. BUT you need to give enough time as often you need to invest in year one to get benefit in year two and beyond... So I recommend a three-year view. Five years is way too long.
Chris also stresses that the need to build in house capability is key:
You need to do this first so you know what good looks like and can better manage partners - using them to help you scale and/or fill gaps.
As discussed earlier, digital transformation needs be continuous. You have to commit to becoming a digital business, particularly as it can take one to two years for returns on investment. This requires strong leadership and direction from the top, but also great management and staff to continually attempt new things. Getting the culture is very important, to ensure you can fail fast, whilst embracing the opportunity to learn from those failures.
Chris Micklethwaite, a CIO & Digital Transformation specialist with recent roles at TUI and Brakes Group, says that for digital transformations to work you need “stability in ways of working, tooling, platforms, skills & knowledge, and a product-led approach, to able to respond to change in the smallest possible cycles”.
He goes on to say that:
For established companies and traditional businesses, digital transformation is a step change to new way of thinking and operating, to deliver new technologies quickly, continuously being able to adapt and innovate.
Chris is an advocate for using metrics that are relevant for your business, but does note that:"One common theme is anything that measures customer experience, the feedback on digital products and services you are developing, and their satisfaction in all interactions with you should be tracked."
Getting the right culture is very important, so you can attempt new things quickly and fail fast. Organisation should embracing the opportunity to learn from feedback from their customers.
Vivek Banga, Chief Digital and Offshoring Officer at insurance giant AJG International, says digital transformation is about: "Creating an environment where people can see there is a better way to deliver a customer solution using digital processes rather than manual. For transformation programmes people and culture are key, you need to get some early wins. Build something quickly that people can touch and feel so they can see the benefits. Always measure revenue and importantly, customer endorsement."
For those starting on a digital transformation, Vivek advises companies to:
Learn to work with smaller budgets and minimum specifications. Build something quickly that is compliant and then measure its performance. If it’s working, continue to invest more in that product. If it isn’t, kill it. That way you avoid wasting too much time and money.
As digital transformation is ongoing, organisations should be hiring people who can help with the continuing transformation. People are key to any transformation. External appointments bring fresh energy, ideas, experience and optimism. When you’re hiring, look for people who can demonstrate involvement in previous digital transformations. Seek facts, figures and strong metrics in their career history.
When you’re interviewing, make sure to ask about unsuccessful projects they’ve been involved with. This will highlight the person's self-awareness and you can begin to understand how they respond to failure. Hiring an interim leader at the start of a transformation is advisable. It enables you to quickly augment your existing team with people who have track records of successful transformations. Interim staff bring valuable knowledge to get your transformation set off on the right path.
Find out how we’ve helped companies going through digital transformation secure the right staff. Please contact Robert White, Director at Page Executive or James Barrett, Director at Michael Page Technology.
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