Are you doing digital or being digital?

Have you ever considered the difference between a digital and physical product, other than the obvious? The ease by which digital products can be updated or improved and put in the hands of the customers is so fundamental it has the potential to change everything. A revolution no less, already transforming our personal lives but also with the power to transform business and corporate culture, where the revolution is only just getting started.

The industrial revolution transitioned enterprise from hand production methods to manufacturing, introducing the concept of a production line, standardisation and specialist roles all of which delivered a consistent and efficient process. This standardisation of process ultimately went on to establish the routines and disciplines that now define how we operate within organisations and the cultures that underpin them.

The digital revolution dominated by the growth of the tech giants such as Netflix, Amazon, Facebook and Google, has already changed our personal lives, but the way in which these products and services have been built and scaled, will have an equally profound impact on corporate life.

Building a digital service has its challenges. However the real difficulty comes when organisations attempt to build a digital service through a traditional functionalised culture which has its roots anchored way back to the industrial revolution. Such a culture built for efficiency and control does not enable effective continuous development and optimisation of the digital product or service.

Digital products are powered by a force of constant improvement and ‘digital native’ businesses are run and organised to exploit this power. For legacy enterprises to truly compete with the rate of improvement offered by their digital peers will require a cultural transformation. Put another way, it is not about ‘doing digital’; the true revolution for business is about being digital.

Agile is the term used to describe the methodology by which most software or digital services are built. At the heart of the methodology is iterative development and improvement, delivered through small cross functional teams directed by data and customer feedback. There is a plethora of literature that describes Agile, however what is less discussed are the conditions or supporting culture that needs to underpin this methodology.  In the 14th Annual State of Agile Report the highest ranked challenges for adopting and scaling Agile continue to be related to organisational culture, including general organisational resistance to change, inadequate management support and sponsorship.

5 key conditions that need to be in place to accelerate your transformation from doing digital to being digital:

1.      Leadership: Senior leaders have often built their careers in environments dominated by efficiency and control. The digital revolution is built on collaboration and empowerment. Senior leaders need to adapt, letting go of traditional functional organisational structures. Leaders need to focus on ensuring their distributed empowered teams have the right skills and capability, whilst their own personal focus is on removing the barriers that are preventing their team from being successful. Without this change in leadership culture the process of product/service development becomes inefficient.

2.      Resource: Many existing large corporates have established change functions. The change resources from analyst to project manager move from project to project, with the portfolio of projects being determined via an annual planning and prioritisation process. A digital business cannot run in this way. The process of digital product development usually starts with an MVP (minimal viable product) that is then developed and improved through constant testing and iterative design which continues once in production. The process of continuous improvement and optimisation must be seen as a core business capability, not a project or initiative. Many organisations attempt to mimic this approach through their planning process, but the project often stops once the MVP is launched, resources roll off to the next big thing, leaving the “MVP” languishing, its potential unrealised. The way resources and investment is allocated has to change, with a transition away from a traditional change/project culture to constant improvement & iteration.

3.      Alignment: The cross functional teams that are constantly working on improving and iterating a product or service should all be working on the same set of outcomes or objectives and all have access to the same customer insight. Alignment of objectives can have an incredibly powerful galvanising impact for teams, increasing productivity markedly. No siloed goals or objectives. Instead the entire team are pulling together towards the same overarching goal or north star. this sounds very simple, but is difficult to introduce in a business built around functional control and efficiency.

4.      Quality: As services or products become increasingly accessed via digital channels what becomes apparent for an organisation that may have traditionally distributed its products or services via offline channels such as a retail outlet or bank branch, is just how broken those processes are and the extent to which front line colleagues work around these processes and essentially paper over the cracks for customers. With a digital service, your process is completely exposed to your customers. To ensure the organisation benefits from the power of constant improvement, the business needs to increase its ability through data and testing to identify and fix faults and pain points for customers. There needs to be a raising of the bar of the quality threshold of what is put in the hands of the customer.

5.      Accountability: The challenge with many organisations built around a functional model is that the customer journey more often than not cuts across functional organisational structures. Having clear end to end accountability of the customer journey is crucial to operating at pace, and, ultimately, building an experience that is optimal for the customer.

Cultural change is difficult but can be done, however is often overlooked or understated when discussing digital transformation. It requires commitment from the leadership team with utter conviction in direction. Without the underpinning cultural transformation, traditional businesses will simply be doing digital rather than being digital, and the true power of the digital revolution will remain unrealised. Ultimately this leads to a sense of being in a race that you never seem to be winning. Instead your energy is absorbed constantly fighting simply to stay in the race.