Digital Transformation - What should you consider?

Note: Opinions expressed in this article are my own and don’t necessarily associate with my current employer or previous employers.

“Digital Transformation” has been the industry buzz word in recent years and everyone has their own perspective on what Digital Transformation means to them.

The “Analog Era” was a formative time when Alexander Graham Bell made that first phone call on March 10, 1876 to his assistant Thomas Watson. “Mr. Watson come here I want to see you.”[1] Then fast forward to Chester Carlson inventing the dry printing process in 1938[2], and there were many more inventions that laid the foundation for “Digitalization”.

It’s pretty clear when looking at history that Digital Transformation is not a new concept. Actually, I would argue that we had been walking the life of digital transformation for almost five decades now. According to Wikipedia the Digital Revolution began in late 1950.

So, what are some of the key things that have led to the Digital Revolution?

• Innovation
• Disruption
• Opportunity
• Competition
• Necessity [e.g. Consumer expectations / needs]
• Competition in global economics

My answer is “All of the Above”.

If the digitalization began in 1950’s why is there an increasing buzz in many industries around Digital Transformation in recent years? I have been struggling with this question and have been struggling to formulate my answer. However, after considering this over the years, I would like to share my perspective on “Digital Transformation.”

Since we know the Digital Journey of transformation started many decades ago we are seeing the current state of transformation as maturing the lifecycle of Digitalization.

What is Digital Transformation?

“A significant opportunity for businesses to re-invent and transform by focusing on Customer Engagement, Empowering Employees, Adopting the evolving technologies to transform products & services, and Optimizing Operations.”

In short Digital Transformation is all about being connected and being a connector for Customers, Employees, technologies, organizational culture, processes and practices.

What is Driving Digital Transformation?

As we see a shift in the global economies and competition among all the developing and developed countries, we are being forced to drive the maturity of Digitalization to the next level. Some of the driving forces for this transition phase are:

• Competition from emerging-markets and global economies
• Consumer expectations drastically changing and forcing businesses to re-think how they do business to meet the customer demands.
• Huge desire to know what customers need way ahead of time and being data driven.
• Building cognitive systems to collect and transform data to be more meaningful than ever before (machine learning / Artificial Intelligence).
• Evolution and adoption of technologies.

How to build a Digital Transformation strategy?

When defining a Digital Transformation strategy, start by asking:

• Who are we wanting to be?
• How are we going to deliver value added services to our customers?

Digital Transformation means different things for different organizations or entities, and it all depends on at what maturity level they are in the digital lifecycle (e.i. within your company, Marketing’s transformation may need to be different than Finance’s transformation).

Digital Transformation is not about just technology adoption. It’s about the culture and attitude change for how people embrace the change, and technologies will follow naturally after.

Organizations must take the time to define a high level Digital Strategy Disciplines, and the execution of these disciplines may vary. 

Digital Strategy Disciplines examples:

• Customer Engagement
• Employee Empowerment
• Technology Adoption
• Operational Excellence

As discussed, these disciplines are not new. Companies have had these mantras for many decades. What has changed from then and now is how to approach and execute these disciplines depending where the organization is on the lifecycle of Digital Transformation.

Customer Engagement

The core objective of any business is satisfying and bringing consistent value to customers. Today’s customers are more diverse and have more power than they did in previous decades.

The paradigm shift in technologies has played a pivotal role for many companies to keeping their customers engaged. “Customers First” culture has been adopted, and those that aren’t customer focused seldom last in their industry. Instead of selling business focused services to customers, organizations needs to understand their customers and constantly refine to meet customer demands.

• Here are few helpful mantras from the Amazon CEO Jeff Bezos:
• Don’t Just Listen to Your Customers, Understand Them
• Serve the Needs of the Customer
• The Empty Chair: The Most Important Person in the Room
• Never Settle for 99%
• Respect Today’s Customer – “If you make customers unhappy in the physical world, they might each tell six friends. If you make customers unhappy on the Internet, they can each tell 6,000.”
• Don’t Be Afraid to Apologize

Employee Empowerment

Employee engagement and empowerment is pivotal as we walk through the life of Digital Transformation and it all starts with organizational culture. The cultural shift does not happen with a memo from a c-level, but it has to be demonstrated and led at all levels in the organization. Building a culture to adopt constant change and to be able to fail fast increases confidence in employees. Employees must be empowered to try new things and adopt new technologies to meet the digital needs aligned to business, even if it means they fail sometimes.

That being said, the cultural shift often starts at the top and trickles down to the business leaders and to their reporting staff. It is important to understand that cultural shift is incremental and doesn’t happen overnight. Business leaders must play a strong role in demonstrating the culture and raises confidence in their employees. There should be clear vision and identity around digital transformation defined by the organization and how services will be provided to customers. Employees feel empowered when they have clear vision, direction, support, trust and confidence in their organizational leadership.

Technology Adoption

As we speak, technology evolution is happening like never ever before; embracing the technologies to enhance and deliver services and capabilities in line to your business functions is one of the critical disciplines of the Digital Transformation journey across all industries.

In a very short time from now, every organization will directly or indirectly become a software and cyber based company. If businesses are not aligned to this transformation around a digital transformation strategy, they will very soon become obsolete in the marketplace.

We have seen how technology adopted companies have disrupted the long standing markets. For example, Blockbuster went into bankruptcy in 2010 because they didn’t have a digital strategy in place. On the other side, Netflix disrupted this market because they had a digital strategy. On January 15, 2007 Netflix announced that it will launch streaming online videos, well before their competitors. Now how will they continue to shift their strategy to stay ahead of the growing competitor landscape of digital content?

The days of “wait and see” are dead. If you don’t act fast then you can almost assume that you’re setting up for long term failure. This applies to a large corporations or a small team that deliver services within an organization.

Important quote to remember: “Customers Drive Business, Business Drive Services through Technology to Customers. At the end, connect all these together and share the success story.”

Operational Excellence (OE)

Operational Excellence is also not a new idea, and it should be tied directly to Digital Transformation strategy. Whether we consider manufacturing or Information Technology, many industries have been on this journey for decades. With the evolution of technologies, adoption and execution of OE has also evolved. Operational Excellence drives everything we do with people, process and technology.

According to Six Sigma Operational Excellence is made of four categories:

• Strategy Deployment
• Performance Management
• High Performance Work Teams
• Process Excellence

The execution of the above categories is pivotal for effective Operational Excellence, and OE must be cultivated into the culture of the organization starting with the leadership team. It is a continuous improvement throughout the organization focusing on the customer, empowering employees, and optimizing the existing activities in the process. A Lean culture must be developed across the organization to eliminate bureaucracy and to increase the productiveness across the teams. Continuous improvement must focus on process improvement and behavioral improvement of people across the organization. At the end, achieving Operational Excellence is a cultural shift for any organization and it is always work in progress.

Conclusion

Digital Transformation can vary from organization to organization and from entity to entity. One should have a clear vison on “WHAT” they want to be and “HOW they want to get there. The “HOW” aspect defines your Digital Transformation story.

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P.S. I would like to thank good friend and colleague of mine (Spencer Tanner) for taking time to review and provide feedback on this article.