For many, the term ‘digital transformation’ has become a tired cliché, devoid of meaning. But how did we get here? And does organizational fatigue around the subject risk derailing vital business improvements?
My first client-side digital transformation project was back in 2009. It was considered bleeding edge back then and although I managed to build an enthused external team of the industry’s leading lights around me, the business I was part of had a far harder time understanding the task ahead. We had a dozen workstreams and we were focused on stuff like ‘content becoming marketing’ and ‘social becoming customer service’. That was revolutionary thinking back then, but things move quickly.
By 2012, I was helping other brands with digital strategy and transformation which, to be honest, was a hard sell. Although it felt like the industry norm to talk about the subject, it transpired that I was slightly ahead of the client adoption curve and often presenting to blank expressions. From 2013 onwards though we saw traction and brands woke up to scale of gain or loss connected to their strategic approach.
For me digital strategy and digital transformation have only ever meant organising one’s brand and business in a way that best connects with the customer of tomorrow. It doesn’t matter if the seed of change is in marketing or technology or customer service, provided it is allowed to ripple out across the business. In this context the word ‘digital’ is simply shorthand for the future of now – the rapidly changing environment we all operate in.
What’s the problem?
‘Digital’ can mean many things and its scope as a term seems to get broader every day. Some marketers may see it as the adoption of emerging technologies and channels to better reach their target audience, where as an enterprise technologist might see it as agile development teams and embedding AI and cloud services. This breadth of potential meaning has given the term a ‘slippery’ feel when connected with transformation – a perceived bandwagon that people have wrongly grown suspicious of.
‘Transformation’ sounds grand and as a result can sometimes scare business leaders about the potential scale of change required. In practice, however, digital transformation should be the umbrella and overarching opportunity to enhance and alter lots of small component parts - parts that the leaders within any organisation should feel confident about evolving. Provided the right type of support is in place, it can be the single most positive change programme a business can undertake.
Despite its potential, however, in my experience, the perceived pace of digital is driving bad decisions once transformation is under way. Research from the likes of Cap Gemini has failure rates at 70% and Forrester attribute over 40% of this to internal business units fighting over ownership as the transformation proposition evolves.
Organisations take the huge effort to change for the better, but often through internal pressure from competing stakeholders they evolve the structure too quickly. For example, the transition from a digital centre of excellence, through a hub and spoke model, into honeycomb and beyond is a 10-year cycle. That means your initial structure change could be a 4-year test. Too many think they’ve nailed it in 18 months and then start to spread the skills back around the business without achieving any real maturity in the space. It’s easy to spot these brands because their visible transformation through their website, customer service or media footprint stalls and often doesn’t start moving again for a number of years. Meanwhile the slow and steady are increasing their market lead.
Make ‘transformation’ great again
As marketers we spend time thinking about the bigger picture, the latest greatest case study or opinion piece, and scanning what’s on the horizon but it’s naïve to think that specialist senior business leaders are on the same page when their day-to-day focus might be in manufacturing, agriculture or supply chain management.
It’s not that the theory is complex, but unless its framed as relevant one can forgive business leaders for feeling like they don’t need to know. Its most likely someone else’s problem and that’s where the biggest challenge lies because to truly transform it requires the whole business to embrace a potentially different way of thinking.
It’s also vital to engage an external partner to some degree – an important first step is to be open to feedback and change. Bringing the outside in and getting the customer and industry perspective is key to any transformation project’s success. Neutrality will also be important throughout the journey. At key stages you’ll need your partner to become ‘invisible’ – this is crucial because the organisation needs create its own bespoke approach and own everything single part of the change – but also a partner that has a direct relationship with some of the key deliverables in various workstreams. This ensures that the strategic thinking isn’t pure theory and, crucially, that a real-world understanding on how to meet the challenge has been achieved ahead of execution.
Another important key to success is to start off at a high enough strategic level. Get the building blocks in place so that the senior leadership can work as a team on the total transformation solution - what success means for the customer first, then for the organisation and related stakeholders and finally what it means for the brand and its longevity.
Once these are established and agreed the boardroom can quite naturally divide up the key transformation task. For example, the board may want to approach culture as a group, the CEO may want to lead on structure, HR could be best placed to lead on people and skills, and it might be useful for the CMO/CTO/CIOs to collectively tackle process and technology. These streams combine to create the roadmap – which should contain the long-term vision, medium term direction but also the quarterly sprints that will make the transformation happen.
Ian MacArthur is global experience optimisation director at Sagittarius