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July 16, 2018

Simplifying Digital Transformation in 4 Steps


The hardest part of a successful digital transformation is knowing where to start. Paralysis and inertia are everywhere and can be the proverbial sand in the gears of progress; however, successful transformation always starts with small, simple steps.

I will be the first to admit that I really dislike the phrase “digital transformation.” It sounds enormous, overused, complicated and highly imprecise, which are all ingredients to why so many people either look confused or dismissive when you mention it. However, when you dig a bit deeper, the reality is that all aspects of your business and organization are being empowered by digital, i.e. software, solutions, and these solutions need to interact with many other digital solutions.

There are many examples, articles and blogs touting why it’s important to transform, but I think the simplest way to capture and explain it is that ‘this-is-not-your-dad’s-innovation’ that we are now seeing. The rate of technology and digital innovation is directly aligned to computing power, i.e. Moore’s Law, which has grown exponentially every 1.5 years for decades. As of 2018, we are now at a point that our human and organizational ability to comprehend these innovations and adapt to them are being challenged in ways we have never experienced or anticipated. The common ways we have organized, operationalized, and implemented technology are quickly becoming obsolete, and we need new ways and processes to survive future technology disruptions.

Chart - Rate of Change

As further example, Thomas Friedman’s latest book, “Thank You for Being Late,” thoughtfully addresses the accelerating technological change that is girded by “Moore’s Law” and is driving more social, commercial, educational, etc. upheaval today far more dramatically than earlier phases. Take for example the iPhone. It is hard to remember a world without smart phones, but it has only been since 2007 that the iPhone 1.0 was launched.

Consider how many things have changed since that point. It’s astounding to step back and index all the changes that have taken place in just 10 years on your job, at home, interactions with friends, your family, reservations, concerts, your doctor, etc. The impact is almost incomprehensible and the changes we all have gone through are difficult to digest. However, I want to focus on what organizations need to do in order to not only survive but thrive in an increasingly unpredictable and brain-spinning world.

The answer on how to flourish in this new world order is pretty simple. Healthy organizations must develop a learning ecosystem and culture that increases alignment between (1) leadership, (2) operations, (3) technology, and (4) organization where strategy and execution are closely bound together, tracked, and measured. Silos and opaque departments are poison pills. Institutionalizing individual and organizational learning is the antidote.

Your organization needs to be in a state of constant, rapid evolution, or maybe even revolution. You cannot expect to survive if you make a change and then just sit back and wait for the next five years of business as usual regardless of what industry you are in. It’s imperative to build a new momentum and continuous planning, measuring, and learning rhythm in your business that reflects the new reality of increasing digital expectations of your industry and consumers.

We believe that organizations should start small and keep it simple. Focus on an area of your business where you can easily align, track and measure your operations, organization and technology. It’s all about learning and improving quickly. These four simple steps should be your blueprint for digital transformation that can be repeated and scaled eventually to incorporate your entire company.

1. Leverage What You Have in Place.

Digital transformation should start by taking a close look at your entire technology ecosystem and see if you are using all the software as you expect and need. If not, consider that you might not be using the capabilities that are being offered. Too many times, an organization will look to replace a tool without really understanding how to use it. It is much cheaper to get some additional training than an all-out replacement effort that costs significant amount of time, money and effort. In the end, the new tool ends up being no better than the replaced one.

2. Enhance Areas of Weaknesses

Accept the fact that your business has weaknesses and look to make incremental improvements. For example, we have a client who manages their technology requests using a trouble ticketing system. This system ranks the request by FIFO (first in, first out) and does not prioritize or align the requests to the company’s most important initiatives. This results in the “whoever screams the loudest” gets the priority. A small change to the tool to automatically align and categorize the requests based on the strategic priorities and goals of the company not only helped prioritized the most impactful and meaningful requests, it also dramatically reduced the culture of interruption and constant fire drills.

3. Measure

In a famous quote fight between Peter Drucker and Market Twain, who wins? Who’s right? “If you can’t measure it, you cannot improve it” (Peter Drucker) and “”There are three kinds of lies: lies, damned lies, and statistics” (Mark Twain). I believe both are right. There are many times that your analytics, KPI’s, statistics etc, are really not the best ones to use to measure your changes and progress; however, it’s also true that if you do not attempt to quantify your goals and plans for improvement, you are simply left guessing. Keep an open and inquisitive mind about your data and your plans; test all your assumptions. We also believe that a new way is necessary. One that aligns and binds your data (quantitative) with your plan (qualitative). This allows you to see your data in context and see if your plan is producing the expected results. Be open to changing the metrics and your plan as you learn.

4. Learn and Adjust

Your culture needs to embrace learning and improvement for you to be successful; however, too many times, organizations do not allow for people to admit “failures.” Notice I used the word “admit.” We are all flawed, and organizations are even more prone to chaos and weaknesses; however, why not encourage your staff to be proud of their mistakes, talk about them, and then learn how to improve, together. Reward lessons learned *and* shared. Out of the 4 steps, this is the most difficult because of culture and human nature; however, it’s also the most important one for the future of your organization. The speed of innovation is accelerating, and it is imperative that our speed of individual and organizational learning keep pace.

Executives at legacy organizations, struggling to meet the challenge of an aggressive digital disruptor, sometimes think they have to overhaul their entire business from top to bottom. However, that’s not true. You do not eat an elephant in a single bite. Your digital journey starts with a single, simple step. Start by assessing your true digital health along 3 major dimensions: (1) organization, (2) operations, and (3) technology ecosystem. Take an inventory on what is really working and what needs to be replaced. Then make small improvements, measure, and learn and adjust. Rinse and Repeat. Your digital health starts with a realistic understanding of where you are and where you need to go. Digital Transformation is a journey with no destination, but you can and should get stronger along the way. These steps will help you lay the foundation on which to better adapt to and overcome future technology disruptions.

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