It’s Not Enough to Call Yourself a Digital Business – Here’s How to Operate Like One.

When your organization faces scary numbers – a weak quarterly report, low customer satisfaction, sluggish time-to-market – the natural instinct is to play the change card. Something decisive. Dramatic. Digital.

Their fingers pointed at the “old” system, so many CEOs want a “new” one. Learning from their IT department that a new system will take 18 months, they go shopping for a tech partner to do it faster. Six months later, they’ve got a new system, a disgruntled tech department, and friction all around.

A story that starts like this always ends the same way: with more scary numbers on the next quarterly report, stagnant customer satisfaction, or the same bloated TTM.

That’s why, before undertaking a digital transformation, leadership needs to answer two questions:

  • What problem are we trying to solve?
  • How will we measure success?

If an organization enters a digital transformation with a vague goal like, “make this group better,” it will end up with overly complicated systems that demand more work. Instead, ask yourself what’s motivating the drive to build the new system, for example, “deliver insurance products faster.”

Once you have your reason, you need to determine measurable outcomes, such as cutting delivery time in half or getting higher marks on customer surveys.

These questions will have unique answers, depending on the level of your company’s maturity and the challenges it faces. Regardless, companies that succeed at digital transformation follow a consistent pattern.

Change, Grow, and Scale These Three Things for Successful Digital Transformation

We’ve all heard the old adage, technology is only as good as the people who use it. But in a large-scale company, your people also need to be tapped into an organizational structure that allows them to get results in a timely fashion. People, process and technology – they’re like three wheels on the same tricycle. You need to address them all, if you want to change direction and get where you’re going faster.

As a certified executive coach and strategic adviser, I’ve seen company after company make huge technological investments in the hopes it will catapult them ahead, only to fail because they only checked two of the three boxes. Of the three, however, most of these struggles are related to the people – not because they lack skills, but because leadership does not prepared them for the change with transparent explanations about why it’s happening.

Get Your People on Board

When the sound of change echoes through the halls, every employee’s first thought is, “How does this impact me?” And no one does their best work in survival mode.

An announcement can’t just be, “Hey guys, we’re going to the cloud.” No one will be listening if they’re wondering what happens to their job security after an automation.

Start with the motivation: “The competition’s time-to-market is x times faster; going to the cloud keeps us in the game.”

Remember, the change is not the outcome; it is the approach to the outcome. Being transparent about the stakes allows employees to know their part in reaching it: “We need to be more efficient… Here’s why.”

For example, when introducing the dreaded automation, point out that the goal is to replace low value job functions, giving employees more room to develop the high value skills that increase future prospects.

Another way to get your people on board is to experiment with one multidisciplinary team and use their success as an incentive to the company as a whole.

A team mindset – that highlights the mutual benefit to employees and company – makes your people more likely to grease the wheels rather than throw a monkey wrench in the gears of change.

Even if an employee isn’t actively generating friction out of fear, they won’t be able to put new technology to use if they aren’t trained on all aspects. I’ve seen companies adopt the latest and greatest products – only to have their processes take just as long, because they failed to get their employees up to speed.

Make Your Process Reflect Your Objectives

Once your people have the mindset and skills to tackle your goals, you have to look at how they interact with one another across the company.

For example, an insurance company won’t be able to optimize its speed with the traditional approach to compliance that requires multiple checks at every step. Instead, it should build compliance into the new process.

Whatever your goal, you need to ask yourself, “What communication structure optimizes for the outcome?”

That likely requires a reorg, because, as Conway’s Law suggests, “Organizations which design systems are constrained to produce designs which are copies of the communication structures of these organizations.”

So if your company is structured in siloes – with traditional marketing, finance, operations and customer service departments – you’ll likely get siloed thinking: operational departments that are discouraged from working with each other and, as such, unlikely to achieve any higher order objective.

However, “reorg” can risk being as much of a buzzword as “digital transformation.” Any reorganization has to serve your motivation – and your people. You might incorporate direct and dotted line reporting, so that performance reviews take place within traditional departments but day-to-day work happens in t-shaped teams that have the depth and breadth of knowledge to execute high level work at a fast clip – along with constraints that ensure they make decisions in alignment with the OKRs.

Choose the Technology that Fits Your Why

Once you’ve checked the boxes on people and processes, the last step is to choose the technology that will let you get the job done.

You aren’t shopping for features and functionality; you are buying or building a product that you can integrate into your enterprise with your people and processes, optimized for your specific business outcomes.

Before you reach for the “shiny new object,” have you done the market research? If your problem has been solved before, how? If not, do you need a bespoke solution? Make your technology respect the patterns. Is it a buy or build?

Don’t customize if it’s not necessary, but if it is, what’s the approach? What does maintenance look like? Are you kicking your problem down the road or, worse, creating new ones?

How long will the build take? This is where it pays to have your objectives in mind: If your goal is to accelerate your transformation but a build takes two years, is that too high a price?

If you go down the “buy” route, find a technology partner that understands the business value to your company and the impact of their solution. Are they talking about features and functionality (red flag!) or about how to move you forward to your measurable outcomes?

Put Your Company’s Needs First

Digital transformation succeeds when it starts from a problem and metrics to determine whether it has been solved. As with reorgs, mergers and acquisitions large-scale changes fail more often than not. That’s because so few leaders understand the need for a holistic approach that takes into account people, process and technology, using the “why” as a touchstone.

This underlying why will allow you to get your people on board and up to speed; it will influence any needed changes in process; and it will help you select the proper technological product.

Then, as you get your people, process and technology in place, you’ll want to apply the three Rs (right formula, right tactics, repeatable actions) to ensure your change takes root and helps your company to thrive.

Stay tuned, and I’ll walk you through how the three Rs apply to digital transformation in Part 3 of this series. (Missed Part 1? Check it out here . Want to be sure never to miss my communications? Subscribe to my mailing list below .)


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