True transformation: how to not be in the 70% of digital transformations that fail

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The stats can be discouraging: most digital transformation efforts fail, and failures can have knock-on business impacts. How, then, to be among the minority of successes? Emma Lewis, senior strategist at Siegel+Gale, argues that the key is a true transformation mindset. Read on for her three keys to transformative success.

Cast your mind back to October 2020, when Public Health England admitted that nearly 16,000 confirmed Covid-19 cases were missed from daily reporting figures in the space of a week. They’d used Microsoft Excel instead of a bespoke solution to store the health status of millions of people. And, worse, they’d used a file format that dates back to 1987 to transfer the data, ultimately resulting in the error.

Elsewhere, 56% of e-commerce sites are not meeting the expectations of business customers, and 44% of consumers don’t fully trust digital services.

Transformation isn’t just essential for Public Health England. It’s mission-critical for every forward-thinking organization.

True transformation

There’s a distinction to draw between incremental innovation and transformation. Audi showcases the former, having introduced digital experiences into their customer journey, including in-store screens displaying life-size cars for prospective buyers to modify. These digital experiences improve the purchase journey, but fall short of a complete pivot to a digital business model.

Contrast this with Tesla, whose entire organization is grounded in a digital-first approach. Alongside pioneering artificial intelligence (AI) technology and systematic driver data capture, Tesla is the only manufacturer in the world to provide automatic over-the-air updates to firmware, remotely augmenting infotainment, safety and performance of their cars. Tesla is now the most valuable car company in the world.

Becoming a brand committed to a digital mindset is necessary to stay competitive in today’s market. Yet it’s not always a straight path to get there. 70% of digital transformation efforts fail.

Attempts to build technology in a vacuum, meeting perceived rather than actual demand, encounter issues. Every digital transformation effort should be driven by a desire to stay close to the customer, build value for audiences, efficiently satisfy unmet needs and provide untold benefits.

Understanding the disruptor mindset: GE and Novartis

In the last two decades, disruptive tech companies changed the way we listen to music, watch television, interact with friends, pay for our groceries, date, travel and shop. New approaches enabled these giant leaps. Disruptors deployed business models grounded in customer proximity, experimentation, rapid feedback loops and agility. They built brands that effectively communicated the benefits conferred to customers, ensuring they knew that their services made life more convenient and contemporary. The experiences they built were personal, intuitive and simple.

Customers at both the corporate and consumer level got smarter. Demands evolved and expectations rose. Industrial-era giants found themselves scrabbling to keep up.

At GE, digital transformation efforts have been in play since the early 2010s. GE created an internal development department GE Software, primarily a resource for business units within the GE fold to source their software needs. Most of GE Software’s revenue could consequently be traced to internal entities rather than the global market. The brand hadn’t learned to listen to what its customers wanted, and instead was trapped generating limited value within its own four walls.

If an organization hasn’t adapted to meet the evolution demanded by the market, implementing effective change will be challenging. Novartis set about transforming itself, recruiting AI specialists and investing in data platforms and integration. Until taking a more interdisciplinary approach, they found that critical players across the business were not embracing the new information that was available to them. They couldn’t decipher how it could improve their output. Pilot programs had limited success; investment returns sagged.

If an organization hasn’t cultivated an aligned mindset among employees, transformation efforts will magnify (rather than resolve) divisions.

At Siegel+Gale, we’ve identified three simple brand levers that organizations can deploy to set themselves up for transformative success.

1. Direction

Identify the core purpose of the organization that underpins the transformation effort. Embed the purpose and use it as a benchmark for determining the efficacy of interactions and experiences.

Disney set out to radically reshape its business, evolving in under three years from a company rooted in analogue customer experiences to become a brand synonymous with digital streaming that now boasts 129.8 million global subscribers. The brand achieved this by honoring its objective to “be one of the world’s leading producers and providers of entertainment and information.”

2. Demand

Customer-centricity has never been more critical. The future of a company needs to be designed from the outside-in. Experiences need to be personal, adaptive and intuitive. Feedback should be actively captured, measured and incorporated into every development phase.

Amazon chief executive officer Andy Jassy wrote in a recent shareholder letter that what’s needed is “blind faith but no false hope.” The ability to incorporate feedback loops from the starting point of a customer’s need is integral to success. At Siegel+Gale, we take a fact-based approach to determining what customers are looking for, deploying proprietary methodologies to build a picture of their needs, aspirations and emotional drivers.

3. Depth

It’s not only the C-suite and IT teams that need to lead the transformation charge. Employees must be brought on the journey. Brand-led change ensures that employees understand what the plan is, why it’s needed and what the business impact will be.

It’s teams on the ground who, when aligned on the ambition, can work together to ensure the success of the transformation. Their expertise should be leveraged throughout the journey because their understanding of the organization is vital in determining how the brand should evolve.

By building clear, deeply embedded direction, and ensuring that it meets actual customer demands, true transformation is possible.