Several years ago, organizations embarked on Vision 2020 initiatives to transform their organizations into lean, digital machines. With the calendar now turned to “2020,” it makes sense to ask the question every parent hears on a long drive: Are we there yet?
Recently, I had an opportunity to meet up with a large group of senior industry executives whom I’m also proud to call friends. These leaders represented a wide array of industries, from investment banking to insurance, and guided companies ranging from large enterprises to small family-owned retail businesses based in Latin America. I asked 20 of them what they thought of digital transformation and how they were driving it across their organizations. Their responses surprised me. Broadly:
- One-third said digital transformation is driven directly by the CEO’s organization and is core to the company’s 2022 strategy. The goal: engaging customers more effectively and growing revenue streams
- Two-thirds said digital transformation is an IT-driven initiative with a goal of modernizing the IT infrastructure and providing data-driven business models
While not exactly scientific, their responses highlight a problem that many organizations face today. Executives are struggling to identify their core digital transformation agendas, and those agendas change depending on who’s leading the initiative. So, how should organizations plan for this in 2020 considering the maturity of the Digital Transformation hype cycle?
The answer depends on the organization and its anticipated business situation. However, I often advise clients about three consistent areas that, if approached properly, can help executives rally their entire organization behind their transformation initiatives.
- Start with the end in mind
It is important to come to consensus on two things early in the planning cycle. First, identify the one outcome shareholders would like to see happen within 18 – 24 months. Second, understand how long the business is willing to wait to measure positive outcomes from this initiative. The clock must start as soon as the meeting ends. Initiatives often fail because they are too big or broad, and not bound to a specific timeline.
To help senior leaders identify these goals and take action, we often ask how they would react if “an Amazon” entered their market next quarter. That prospect, plus two items above, enable the leadership team to focus on what matters most to the business.
- Understand how much it will cost
CNBC evaluated some of the biggest failures with digital transformations and concluded that, financially speaking, deploying the most expensive systems and service models alone does not guarantee a positive outcome. At Wipro Digital, we encourage leaders to plan this phase of their journey with a short and measured timeline using the following approach:
- After identifying the transformation initiative, document its minimum intended benefit (revenue, cost savings, etc.) at the end of a two-year period. Anything longer than two years goes awry.
- Now cut that anticipated benefit in half. This can seem discouraging, but it provides a reality check very quickly and forces the team to identify how to improve key aspects that can increase the benefit and help achieve the organization’s goals. We’ve been involved in multiple mid-steam transformations that needed quick changes and benefited from making them. One common pitfall for large and small companies alike is incorrectly anticipating customer adoption of a digital platform. Slow adoption means slower value realization. Integrating Strategy, Design and Engineering – and defining leading and lagging metrics across the implementation lifecycle – eliminates some of these pitfalls.
- Finally, have the team consider approaches to deliver the intended benefit without digital transformation, and using the current business model alone. What would it cost, and what resources would they need? Could they achieve it using existing tools and the current organization? If the answer is yes, the team should look deeper into why they’re undertaking the initiative. Advanced digital innovations can make other technologies seem mundane, but business leaders leave easy money on the table if they overlook simpler steps that might deliver short-term returns. Sometimes modest transformation goals can deliver value while acclimating the team to the cultural and resource investments required to succeed with longer-term, more-ambitious initiatives.
Once these three steps are done, we can begin developing a meaningful budgetary number that will drive business value across the organizational ecosystem.
- Embrace – and communicate – that transformation is both internal and external
As Lee Iacocca once said, “You can have brilliant ideas, but if you can’t get them across, your ideas won’t get you anywhere.” Working with large enterprises and small family-owned businesses, I’ve seen many transformations fail because the teams that were expected to evangelize the actions and drive the outcomes didn’t fully internalize the transformation’s value or meaning. As a result, they become impediments to success.
This can be overcome by engaging change management experts who work with teams to help them embrace new ways of working. This is not a one-and-done activity, but it starts early in the cycle and continues even after the technical experts have completed their work. Key attributes to develop are:
- Focus on the Why — Communicate the inspiration behind the change to ensure everyone is on the same page about why it’s necessary. Explain how the transformation will benefit the business, why it’s critical for future viability, and how it impacts employees. Help the team realize how their contribution is vital to success, and why the transformation is important not just for the organization, but for them individually. By building a common purpose, everyone across the organization will understand, and contribute to, the ultimate goal.
- Create personalized communication journeys — Think about how HR communicates changes to health plans and benefits throughout the year. They create targeted experiences that reach different groups through varying formats and channels, with distinctive tones and styles based on their demographics. Transformation initiatives should be approached similarly, with messages that enable internalization at both the individual and team level.
- Measure sentiment for your program quantitatively — This step is not very different from measuring customer metrics, and it’s required to ensure that the communication pathways are open and working. Some parameters include identifying what emails are opened, which content is viewed, and how audience engagement differs by subgroups and qualitatively based on their perception of the information provided.
Adopting this approach to digital transformation in 2020 will help companies truly become change-ready organizations. The improvements in agility and readiness will help in 2020 and beyond, with an aligned employee base that understands the goals and is equipped to help the organization realize long-term success.