Can the COVID-19 Lockdown be a catalyst to drive your digital transformation

When you think about the best digitally transformed companies, a pizza company isn't probably what you first think of and yet Domino's reinvention of their products and  their customer experience has seen their share price go from an all-time low in 2008 of $3.00 a share to $383..75 just before COVID-19 impacted the markets and they have become an exemplar case study.

The drivers behind this were Kelly Garcia (SVP e-commerce & Emerging Tech) and Dennis Maloney (Chief Digital Officer) who convinced their board to think about their business as an e-commerce company that happened to sell pizza as a way of turning around their business.  They then used this buy-in to drive an incredibly successful digital transformation and business change programme for their business, leveraging a mobile first / Domino Anywhere platform that enabled customers to pretty much order from any device, anywhere.

There are many similar success stories to this, where organisations have used digital transformation to create competitive advantage: disrupting entire markets by launching new digital products and services, out performed their competitors through superior customer engagement and user experience, or simply been more profitable due to a streamlined cost base for their organisation.

However there are still many organisations that have yet to digitally transform their organisation  and as their employees and customers are working and living 100% at home due to COVID-19, those organisation are now suffering through lack of online sales or through difficulty to operate as their paper processes don't work well in lockdown.  If you are one those organisations, then COVID-19 may be the catalyst to kick start your post lockdown transformation programme.

I appreciate this is always easier said than done.  Transforming your organisation from one that engages with and uses digital technologies to a digital enterprise takes more than just a focus on technology.  Areas such as focussed leadership, strategic and operational priority, appropriate incentives, appropriate investment, great communication and employee buy-in are key to a successful transformation. In effect, a business change discipline is key to digital transformation.  Here are some simple principles that may help you as leaders pf this change.

Where to start?

When building your plan, understanding and identifying the key customer and employee user journeys, across the organisation but focussed on specific tasks, is where you should start. 

Focusing on the customer journey helps start (and keep) the programme realistic and helps give all of the organisation a common purpose.  Optimizing a customer journey challenges every technology and process in order to deliver an improved user experience.

After mapping the customer journey you can focus on how to make each touchpoint better, faster, and more efficient through the use of digital technologies, plus integrate then into a single experience. 

Measure what is important

• As part of the transformation, revisit your key performance indicators and associated incentives, adjusting them or re-focussing them to reflect your new digital customer journey and what is important to that journey from across your organisation, so that everyone is measured and incentivised around the customer.

Taking an end to end 'whole business' approach

• Clearly, digital transformation is a team sport and will not have the desired impact if the transformation is limited to an single part of the organisation or a single part of a customer journey or is owned / sponsored by a single person.
• Joint board ownership and Internal collaboration across organisational boundaries is a fundamental building block for success, with incentives to deliver overall business transformation as a priority over their induvial operational area.
• Where possible, utilise cross functional teams that have board level sponsorship and the mandate and resources to get things done.  Incentivise the team on the delivery of the end to end transformation.

Operate an iterative / agile approach.

• We all know that we need to strike the right balance between planning and doing and no matter how much planning we do, we still won’t get things right first time.   Successful companies will work in an agile way, testing with customers whilst building a solution or process.  This ongoing testing with the client enables them to build something that meets the customer's (and the organisation's) needs, now and in the future.
• Successful organisations also constantly test and review their digital processes and services, even once the initial transformation has gone live, so they keep pace with the customer and market need.

Transform in areas where your market is also changing

• In addition to existing customer journeys, leaders should also look to areas of disruption in  your market or other markets.  It is important that you look beyond your own market for signs of disruption that will eventually head your way.  Example of these changes could be: IoT / Industry 4.0, digital logistics / supply chain and manufacturing at the edge, e-health, digital media etc.
• It is also important that you take into account forthcoming legislation / regulation.

Leverage innovation as part of digital transformation

• Given you often need your digital transformation to help you disruptor in your sector or to react to being disrupted, then it is important that your organisation has a strategy for how you will leverage innovation and how to enable innovation to work in conjunction with the transformation team.  
• It is important that the innovation team is able to experiment and identify true disruptive activity whilst not bombarding the transformation teams with lots of ideas that could act as a distraction to implementing change.
• In terms of budget, when times are tough, innovation budget can be one of the things that suffer and get cut, when in reality, it is often the area that needs protecting if your organisation needs to fundamentally change

Transformation investment vs annual budgets

• When you compare most organisations' annual budget cycle with the agility that companies need to be able to adapt and transform, it no wonder that many transformation efforts are thwarted by the lack of funding or access to funding in the right timeframe.
• Linked back to the comment above around board level commitment for transformation, then funding and resource need to be available for transformation when needed.  This should not be managed in a classic budget way, i.e. a budget for the year, but a funding  line that can be made available or pulled depending upon the transformation projects progress.   Progress would be measured inline with KPIs mentioned above. 

Can your IT department support the rate of change needed?

• It can be a real challenge to perform digital transformation with legacy IT. But legacy IT isn't going to go away anytime soon.  Ideally, your IT needs to include separate systems that enable flexible customer-facing capabilities, where new apps and databases can be added without touching the underlying systems that run the rest of the business. This 'digital speed' system supports agile development and prototyping, with rapid software releases.  The linkage between the two IT worlds is often data, enabling data to be accessed by APIs for new systems and processes will be key. 
• These 'digital speed' systems include the analytics needed to gain insights into customer which then determine how to engage with and support customers moving forward.
• However, multi speed IT is not just about the systems and development, it also how you adapt funding, approvals, procurement and life-cycle management for different types of IT moving at different paces.

For an organisation to be able to embrace digital transformation, it often needs its senior management to transform itself first, as it’s a leader's role to provide all of the enablers to its people for the transformation to happen, at the speed needed, as well as set the top down strategy in the way that Domino did.  

Senior leaders' inability to change how they work and how they enable others can often hold back an organisation's ability to transform

Let me know good and bad examples of where organisations have strategically and operationally enabled digital transformation to take place.