I’ve seen many attempts at digital transformation stumble because there were three things missing at the start of the project.
These three foundations – objectives, data and people – are not new concepts. Deloitte makes the point that getting digital transformation right takes more than just ambition and bold investments.
What is changing the impact of transformation success is the capabilities of teams inside organizations, including the need for increased accountability across ever-larger groups and teams, and for data-led decisions being made on everything from digital marketing to AI.
Building out that capability is crucial to the success of transformations. McKinsey placed it second only to capable leadership in importance. My experience and observations are that this, along with an ability to understand and act on data, is often overlooked.
Not focusing on the required capability building within the organization can lead to frustration especially with individuals, if they are suddenly being held accountable for results that they either have little control over, or which they have not been trained to analyze and act upon.
With business transformation, the objective is never a strategy
The digital transformation journey therefore needs to be planned for and managed. Organizations can’t just want things to happen, or expect things to change by company edict.
This was something we discussed late last year at a seminar held with the Australian Computer Society. A number of the panelists emphasized the point that the skills of employees need to be mapped to the needs of the business and the destination that is the new focus for the business. Where are they today? Where do they need to be tomorrow? What support, training, development and program of change do they need to be taken upon?
Success requires good people design, training and capabilities, measured against the organization’s overall objectives. This also includes review of KPI’s and remuneration that is tied to performance to ensure total alignment to the new outcomes you are looking to drive.
This is not a one-off process or approach. It’s a continued planned journey towards those pre-defined objectives. As one example, the concept of accelerated growth is attractive, but it requires the right talent in the right people, and the right type of investment, inside the organization.
Without that, it matters little what the company or its senior management want: success by any full measure, won’t be possible.
Where to focus: multiple touch-points, customer expectations, first-party data
In working out what the transformation destination might be, along with the business objectives, the answer as to what needs to be solved, is rooted in the needs of the customers.
Their expectations change continually. Understanding both the changes themselves and the process of change is what triggers and drives the requirements of digital transformations.
At its heart, you need to understand how you can better serve and meet the needs of your customers, on their terms, when and where they wish to be served. This may be what is required to allow them to self-serve, but also in what information that is required to better support them from your people, or help them make better decisions around serving your customers and your business.
People’s capabilities can then map to customers’ needs. Otherwise, change in itself won’t create or deliver the desired outcomes. The capabilities of teams inside the organization may change, but they must meet the customers’ expectations.
An example of where I have seen this fail is the desire to upgrade a business’s web platform with a view that it will provide “everything”. However, the design of the website is either not mapped strongly enough to customers requirements, or the data that needs to flow and be available to the customer or internally has not been designed with the view of what needs to happen to it, or because of it, at the speed it is required. The other key failure point is having a great system built, but a team and those who need to get information, unable to do so or use it effectively.
Many commentators share the same, general areas of focus for success, but I think it’s helpful to distill these down to just three. These can be applied to organizations seeking to transform their marketing operations, all the way through to large companies seeking to transform their entire organizations.
Driver one
The first driver is that there are multiple customer touch points, increasingly possible by smart devices and always-on digital connectivity. Very few of us now walk into a bank for a one-to-one engagement with a bank teller. And many of us do not wish to (for instance, I had to go into the bank last week to change an address for a business credit card. This was unable to be supported online and was a colossal waste of my time and a poor use of their time for something that could easily be supported online).
This goes much further than back-end apps and delivery processes. These multiple touch points represent new ways for brands to engage with customers, by creating previously unheard of customer experiences. So people’s capabilities need to be adept at e-signing and fulfilling these multiple touch points, across multiple data points.
Driver two
The second driver is that customers needs have changed. They expect much greater self-service, personalization, and they expect real-time responses on their terms, wherever that is, at whatever time that is. Particularly around support and when purchasing or tracking progress from you.
One implication of digital transformation is that every part of the journey needs to be considered, and a change here will likely directly influence a change over there. An accelerated success in one area can also lead to roadblocks in another, which in turn will frustrate customers who have been taken so far along a customer journey, but are now forced to wait.
Driver three
Finally, businesses need to rely more and more on first-party data, which means developing value to first exchange the permissions to obtain their data and to engage them as you hope, and in building trust with customers around acquiring and using their data to create positive and meaningful changes of value. And of course, this is increasingly driven and governed by regulation. Organizations that don’t get this right will add risk and costs to their businesses.
A complete understanding of all of these drivers will change any digital transformation from being something that an organization hopes or perhaps even demands will succeed, to something that will succeed with some degree of success, if built on objectives, data AND people capabilities.
This approach also minimizes the constraints (such as the ability to deliver through the transformed customer value chain) that can appear later in the transformation.
One thing we’ve seen with companies is that customers will not give organizations who cannot meet customer expectations the time and flexibility to catch up. Organizations will lose their positions in the market, their originality and competitiveness, and their ability to delight their customers.
Fundamentally, digital transformations are less likely to succeed if they don’t build people capability, aligned with a clear objective or strategy. BCG found that only 30% of digital transformations succeed. As BCG also points out, the inverse is likely to hold true: set clear objectives, align teams with those objectives, and transform the skills and capabilities of employees, that success will be achieved
Use data to inform and accelerate change, but also make data something more than a set of tools used by teams. When thinking about Digital Transformation, embed data and data-made decision making in the culture of the organization. Make data an essential attribute of the capabilities of your teams.
A version of this article also appears at digivizer.com