Digital Transformation continues to be a hot topic across organizations. In a recent IDG poll more than ⅓ of businesses have started down a digital transformation path with almost ⅔ in some state of operating mode or ‘completion’ (can a transformation every be complete?). The ground-truth of a lot of these digital transformations is while the work is well-intentioned, many businesses aren’t ready for real transformation when they hit the ground running.
How do you know if your organization is ready, or worse, how do you know if you need to pump the brakes to ensure long-term success? This is Part 1 of a two-part series on ways to ensure your business is well-positioned for true digital transformation success before any new systems, people, or processes are put in place and expected to make it happen. If are part of a digital transformation initiative and any of the following are true in your organization – raise the red flag!
No Top-Down Support
Many businesses today are talking about digital transformation and focusing on the technology aspect as a first step but any transformation, be it digital or otherwise, is 80% culture, 20% everything else. Given that, it’s exceedingly difficult to achieve true transformation if there is no executive, top-down support, and by support I mean understanding the nature of true transformation, what it takes to lead transformation, and walking the talk.
The kind of changes that are needed in a digital transformation takes buy-in at all levels and if that doesn’t exist at the very top the rest of the organization will see it, and won’t commit. How do you know if your organization has top-down support for transformation?
- They communicate about the goals and objectives clearly and consistently; themselves and across their peer group.
- They look for opportunities to educate and bust organizational walls and myths to support transformation goals.
- They work within their peer group and their teams to re-prioritize initiatives that support transformation over status quo. Start, Stop, Continue exercises are particularly helpful to get this going.
- They commit budget.
Misunderstanding of Transformation Activities that Drive Growth vs. Efficiencies
I’ve been in numerous conversations with digital leaders who are leading digital transformation activities, but don’t understand how their activities fit into the overall transformation strategy, specifically whether they are working to drive growth or efficiencies. This misunderstanding becomes destructive when building out plans and KPIs around initiatives.
I’ve found a lot of executives still look at digital transformation as a cost-savings vehicle and while many transformation plans have a heavy dose of enablement and automation through technology improvements, cost-savings alone won’t drive the top-line growth most businesses need to thrive today. What is more detrimental; having a myopic view on efficiencies in a digital transformation plan that stifles the innovation and leapfrogging that can happen for a company if they also look for areas of growth digital transformations can enable. How can you make sure your digital transformation identifies areas for efficiencies and growth?
- Use a business case template that analyzes ROI. Seems simple, but as part of digital transformation governance, this is an important tool to help evaluate and prioritize initiatives and gain alignment up and down the organization.
- Use storytelling and design-thinking techniques to identify whether a particular initiative can save money, drive growth, or both. While a business case will give you numbers for a particular scenario, thinking about broader implications of a particular initiative might help you uncover additional considerations or scenarios you didn’t consider just plugging in numbers leading to a more robust and complete transformation strategy and execution plan.
- Make friends across the aisle. Wondering if your idea for automation is well-founded? Spend a day with the person whose job will be impacted. Not sure if your initiative will actually meet the needs of a customer. Ask them. In order to set the right KPIs and understand if you’re driving growth or efficiencies, it’s critical to step outside of your department lens and get a 360-degree view of the area you seek to transform. This includes everyone from customers, to suppliers, to field-reps, to sales and marketing, to yes, accounting.
Read on to Part 2 of this series that addresses how you might go about better defining and measuring initiatives in your transformation strategy that can help you attain that top-down support and better support long-term assessment of growth and efficiencies.