What are the early signs and symptoms that your company needs digital transformation?

Do you really need to initiate digital transformation in your company - what are the early signs and symptoms that you need to change?

The importance of digital transformation has been largely misunderstood by organisations of various size and scale still there are bankruptcies and Failures. These are some of the signs and symptoms which require the urgent attention of senior leadership team by making digital transformation as one of the most important priority for your organisation’s survival.?The author describes 22 points which act as the early signs and symptoms of when do you need to initiate digital transformation in your organisation.

1. Still having Centralized? production and centralised decision making; There are plenty of organisations which are still Operating from ivory towers and having decision making centralised in the hands of few key people of the organisation and whatever they decide is percolated down to not only national but also in all international markets as per the size and scale of the organisation. This is a lethal practice in current scenario. Ground realities have changed. Market demands and media landscape is changing very fast. what was relevant a few years ago is not relevant now. So companies need to relook the way they have been doing production and marketing decisions for their business. Even for production you are failing to avail the newer avenues of contract manufacturing in a market where labour cost and raw material cost is substantially cheaper. So the decision-making has to be de-centralised so that more and more empowered managers can respond to the market dynamics by taking faster decisions.
2. Stagnant or declining revenue growth and market share in the industry; If you are an organisation; in an industry, which is consistently facing the problems of stagnant or declining growth for the last couple of years, this may be a sign for not having the good health of your organisation and industry overall. This might not be the scenario maybe in the last decade but this harsh reality in the current one. You need to sense the pulse and breathing of the patient In case as a specialist doctor when you need to revive him or her. The same rule applies to organisations as well, where as a visionary leader you need to sense the signals of early failures as well.
3. Not been able to utilise social, mobility, analytics, cloud and newer ways of communication; a few years ago SMAC was the biggest technology buzzword and a trend and a lot of companies thrived in that wave by doing effective utilisation of social media, mobility, analytics capabilities and cloud computing. Being in any industry today and if you still feel that these things are still not relevant to you, then I think you should relook your leadrship team and the board mindset and thought process. There are a lot of organisations still having a challenge of not been able to collate and compile unstructured data which poses a potential business problem which is fine. It simply means that there is a great scope of innovation in your industry. so not been able to utilise the contemporary and emerging technologies is a sign and symptom that your organisation is at the cross road for disruption and need digital transformation
4. Struggling with improving operational efficiency and employee productivity; if as a CEO you are still attending meetings where in improving operational efficiency and employee productivity is on the top of the agenda of the board and you are not able to solve the puzzle then it’s a right time that there are gaps in either the way you are managing operations and or you still don’t have the right mix of newer and old age manpower. In the last few years you have not invested in any new age technology or tools which increases the morale of Employees and give customers a better or newer experience. While you are reading this article and are able to draw analogy of what is happening within your organisation so it’s the right time to wake up and focus on digital transformation.
5. Not been able to open the door to new business opportunities and build newer revenue streams; if you are in a situation where sales person is scolded or punished for bringing newer requirements from the existing customers and or pushed down by the senior management to focus on only the standard products and services which you have been doing since ages as it offers you higher margins and ease of sale. Or you are finding it hard to create new business opportunities because of lack of skills, strategies and ideas. Even you are not being mandated by the senior leadership team to keep an eye on new revenue streams which can help grow your future revenue and bring new future customers. These are good enough signs that your organisation is going to fail soon as hustlers, disrupters and innovators in your industry might eat up your market share one fine day and give a major dent to your existing existing revenues.
6. Not been able to create or invent new products and services. This might be by a strategic choice of the board or the way you sense your own industry and market and conclude that there are no scope of any further innovation. Organisations inability to invent or create new products and services becomes the major reason for their long-term survival and hence put a question mark on their business continuity versus the organisations who are able to sense new opportunities, prototype and test pilot new products and services. As it helps them in balancing the declining revenues or losing market share from a particular product line.
7. Not been able to respond to newer demands coming from existing customers and at the speed they are expecting; customers are connected to internet and social media and have access to better information about products, services and innovation. And that is why they challenge status quo and start demanding new requirements from existing portfolio of products and services as they know what is feasible and what is not So we have to regard customer to be the king even today also plus I would want to add that customer is now even more intelligent. So if your organisation is failing to meet the new demands of existing customers and also if they are not happy with the production schedule of shipping new products as per their expectations, there are strong chances that they might shift to a new start-up or already existing competition player who is able to match up to their demands and that too well in time.
8. Absence of strategy team or key leadership team’s inability to anticipate the changes of demand in the market; Beyond servicing what is being asked for if your strategy team or key leadership team is not able to anticipate the winds of change, changing media landscape, newer start-ups working in your ecosystem, change in demand or the customer engagement model which is less up front fee and more in the form of monthly subscription payment basis, can be the biggest force of this Description. If there is no one tasked with strategy as their main KRA, or having strategy personnel, which is very less in number as compared to the scale and size of your company, also becomes a detrimental factor in the overall and long-term growth of the organisation. As if if you are deciding the fate of your organisation then there are chances that if their gut feel is wrong your organisation will make wrong decisions and are prone to failure. So you need to have adequate number of people responsible for strategy in your company and also the culture should be such that newer ideas coming from any level of the organisation should be welcomed, analysed in a regular group meeting which is set up as a process and employees are rewarded if their idea sees the light of the day.
9. Not been able to drive any specific competitive advantage In your industry for the company; if you already know that as a business leader you are facing stagnation and do not have any specific competitive advantage as compared to other players in the market and market is becoming more and more price sensitive where customers can you change loyalty if someone comes and offers them the products and services at a lower price.? Even the management guru Peter F Drucker had said that it’s a right time to change your industry if you’re not having any specific differentiation or competitive advantage. Competitive advantage may come because of some very specific factors which differentiate your product in service versus competition brand product and service. I am glad that when you’re reading this article as you are really concerned and thinking about how do I have better competitive advantage for my company, in my industry and this should be one of your primary agenda and point when you meet the board members and the key executive team members next time.
10. Too many players in the industry with very less differentiation where deals are lost on price margins mostly; This is a very common sign of long-term failure of any organisation if you are struggling to have you much needed differentiation point as explained in the point above. If you come across this sign then you don’t need to worry about all others as some or all factors may be responsible for the situation which you’re facing right now. If you’re losing deals because of price margins who is stopping you from looking at newer ways of pricing your products and services where in you are still able to get long-term profitability, retain your existing customers and create a positive Word of mouth in the minds of competitors customers or even the customers of customers. If you are able to rethink pricing in such a way if you are able to transform yourself well but absence of this is a very strong signal that you need to transform.
11. Not been able to enhance the quality of the products and services; This is one such situation faced by specific industries where in a lot of time and energy is wasted in customer support, there are frequent complaints about the quality of the products and services, the former customers are resorting to substitute even though they were brand loyalist because of the product quality issues now. When you as a leader is facing the same or somewhat similar situation in your organisation as well,? this is a clear sign and symptom on the way you are ignorng the quality of products and services and the customer experience you are delivering. There are instances that you have a typical image in the social media channel but when it comes to usage and trials of the product you are not able to retain customers so it is high time that start Digital transformation exercise in your organisation.
12. Not having or encouraging the culture of innovation, ?in certain industries like banking, insurance, financial services and stocks sales and purchase, due to the regulatory and compliance demands, sometimes the industry veterans feel that there is very little or less scope of change or innovation as implementing anything new requires a bold courage to be able to convince the regulators and authorities and at the same times being able to protect the rights and wealth of consumers. And stakeholders. However there are some industries where there are are less pressures like that still employees are not being encouraged to speak up and share new ideas and companies lack the culture of innovation. If you see these signs and symptoms in your organisation as well then it is the high time to consider strategising for the digital transformation in your company.
13. Not being ready to face the winds of any disruption. If you have witnessed the closure of some of the biggies in your industry due to invention of a mobile app, entry of a new startup, new emerging technology trend which has become success for a new rival in your industry, a new way of managing od doing something, then you have already witnessed disruption in your industry. World over the list of Fortune 100 and Fortune 500 companies keep on changing and some of the companies which were in nintees are not found in this list now. This reaffirms the fact that there were forces of deception which were responsible for this juggling of this fortune list. On top of that in spite off managers and executive leadership teams constantly reminding the members of board about these changes and they are still not being heard, may mean disaster for your company. As a responsible leader you have to prioritise any such sign and symptom in your organisation and embark your journey on the path of digital transformation.
14. Having poor internal collaboration between various functions of the company: There may be scenarios where in different functional head work in silos. There are multiple vendors for similar solutions in various business functions, geographies or countries without realising the fact that if you are a global company, you can always have the advantage of the scale and size. THere are chances when Various functional heads put resistance in others projects rather than providing support beng self-centred or a particular vendor focused. This is a typical scenario where the organisation is bound to develop ineffeciencies or witness a clear fail of collaboration between different functions. This may also arise due to lack of such technology enabled tools which facilitate the internal collaboration. Ignoring the collaboration within your organisation is a strong signal which requires you to pause and rethink the importance of digital transformation in your company.
15. Gut based Decision making in place of data driven decision making; in today’s world where everthing can be measured in business and if anything cannot be measured it can be termed worthless for a business organisation. If executive teams in your organisations are not relying upon data driven insights and are still relying on their Gut for products, services, market and growth decisions, then as a leader is your responsibility to sense this situation and start asking for data behind any major business decisions. I’m not saying that gut based decisions are going to fail and data driven decisions are always success enablers, but there are chances that if you are making decisions based on data then it is actually very easy to convince anyone who is rational and logical in your board to support your decision. The lack of data or poor quality of data is a great signal which you should sense early if you have recently joined your organisation or or be tasked with the responsibility of carrying forward the project of digital transformation.
16. Not been able to attract new and young talent; if you are not one of the top hundred places to work for in your industry and there are not enough people floating around with their resumes and willing to join even as non-paid apprentice With your company then that is a clear signal that your organisation is failing to attract new and young talent. The advantage of attracting new and young talent is manifold as it brings in lot of external an outside perspective, brings in new ideas and innovation and helps in building a young and lively culture in your organisation. If your HR leaders have pointed this out to you in the past, so as a leader of the organisation, you really need to seriously look at ways and means of attracting new and youth talent for your organisation. This is one of the clear signal that you need to initiate digital transformation and bring mindset changes within your organisation.?
17. Not having SOPs which even competition wants to copy; if you are in industry where processes are everything and you feel that your standard operating processes are not up to the mark, they keep on delaying critical tasks and decisions within organisation, customers are suffering because of internal hurdles created by procurement and commercial teams which are leading to delayed fulfilment of product and services to new customers. Also you are coming across increased customer complaints due to bureaucratic processes and some brilliant employees asking you to experiment lean and Six Sigma processes to improve your organisation, business or function. also you lack clear Standard operating processes then this is a clear and great signal that you need to embrace digital transformation within your organisation.
18. Not been able to utilise the new-age technology and tools for being better at work; Industry 4.0, artificial intelligence, Blockchain, robotics, machine learning are some of the new age technology tools which are bringing path breaking results and creating new products and organisations which are faster, better, nimble and agile. And your IT department is still struggling with age old nuisances of CRM, ERP or supply chain tools and solutions and have not got any maturity In technology stack, if they are still struggling to calculate the ROI of owning a server physically in house versus getting computing power on cloud so there are chances that IT leaders in your organisations are not transformation ready yet. If you witness the lack of use cases for new-age technology tools irrespective of your industry or the products and services you are producing and selling then this is a clear signal that you need to change and adopt Digital transformation as one of the main strategy for your company to stay relevant.
19. Innovation, design thinking are ignored in your organisation; If you come across the scenarios in your company wherein you are not focused on problems faced by various stakeholders in your industry and not even using design thinking and it’s impressive way of solving problems or are averse to innovation in your company then it’s a clear sign and signal that the waves of disruption may not spare your organisation in the long run. So if your executive team is not focusing too much on innovation, design thinking and stuff like that so as a leader of the organisation you need to start inculcating these values to be able to be better prepared for disruption.
20. Average age of emplyees; if there is dis-proportionate balance between the number of seniors experienced and veteran employees and new-age employees with fresh thinking and innovation Then you need to rethink your human resources strategy and try to bring the balance between the senior staff and the new-age employees Ignoring this factor is not a healthy sign for survival of any organisation. As a leader you need to be sensitive of the fact that when you bring in interns and young age employees with fresh thinking and innovation mindset, From multiple cultures and task them with challenging assignments, You can prove a lot of hypothesis which your middle or senior executive team is not willing to believe. Some companies like GE have this culture of bringing in premier business school students into a commercial leadership program which is of a specified duration and based on their performance in this program they are absorbed further into the managerial roles. If you are not doing this within your organisation you are limiting your capabilities for growth and are ignoring the signs and symptoms that you need digital transformation.
21. Technology is not an enabler for the growth of your organisation; If in any of the staff meetings you have been attending you are getting these signals that our company technologies are legacy or old, systems break down at the peak hours regularly, everybody is blaming technology department for either the malfunctioning of hardware, the software or the process issue, Slowing down of process, loss of data or even delay in getting reports and people are not even empowered to surf websites of their choice for learning new things and for competition tracking, Then it is the high time that you need to set up your meeting with the CIO or the CTO of your company and understand their point of view on all of these issues. Maybe they have the pains of carrying forward existing vendors due to contractual liabilities or the wrong decisions of the previous outgoing heads or you havent got enough freedom to experiment new things and technologies or you are thinly staffed and are not being able to spend enough time on strategising new technology initiatives, or he’s the one who turns down any new app or tech initiative originating from any business business in the sake of security or compliance, Then you have a serious problem. These symptoms are Lethal for the growth of any organisation as in these organisations technology is just operational and not strategic in nature. As a leader identify these problems and find a solution with the help of digital transformation within your organisation.
22. Not consulting with all the stakeholders; If you sense that in your organisation the key decision makers are not involving the Customers, current and potential partners and even other cross functional employees and business heads in validating their own decisions or starting new pilot projects. And also The stakeholders are never consulted by the new product development teams and or R&D team which are happy working in isolation, then there are strong chances that the wave of disruption will throw you out of business sooner or later. As a leader take the responsibility of inviting customers in your town halls, take out key employee groups for workout sessions, involve Employees at all levels in generation of new ideas and seek their feedback and suggestions on regular intervals. If you sense that this is not is happening regularly in your organisation so as a leader it’s your responsibility to engage and involve customers, partners and employees for the growth of your organisation by seeking feedback on products and services and try to identify those unmet needs of your current customers which you may be able to fulfil in near future.

These 22 points above are the most important signs and symptoms, which if you are encountering in your organisation, should prompt you to believe that you need to immediately embark upon the journey of digital transformation for your organisation. As a super specialist doctor always believe in conducting various tests and investigations and touch and feel the patient before jumping upon any conclusion or form diagnosis for their patients similarly as a leader or CEO or someone who had been assigned the job of initiating digital transformation for your organisation, you need to use suggestions from this article, use surbeys / play books for diagnosing the early signs and symptoms of when your organisation is in the need of remedial measures in the form of digiital transformation. I believe, both a super specialist doctor and a business leader have the same responsibility. If the diagnosis is correct and well planned, the treatment can also be started early and the same applies to the case of any business organisation as well.

About the author

The author of this article is Mr. Ajay Chhabra, who is one of the top 10 digital marketing professionals from India. He has a rich career of working with lot of global organisations, including Ogilvy, MRM worldwide, General Electric company and Bruce Clay as a digital marketing professional. He has taken up a academic role as the visiting faculty of Digital Marketing, Digital strategy and innovation management at FLAME University in Pune. This article is part of his textbook on digital transformation which he is authoring based on global research. He is available at India Mobile number 7428723334 or at [email protected]

Keywords

Digital transformation, change management. Change. Transformation. Business transformation, leadership. Strategy, emerging technologies. Disruption etc.