Article

How to Make Digital Transformation a Success11 min read

Mike Soden November 7, 2019
digital

watch a video of this article

Many companies struggle with digital transformation despite spending billions of dollars to facilitate it.

In 2018, only 16 per cent of companies rated their transformations as successful, down from 30 per cent in years prior. Why are so many companies failing? 

Four key factors explain these statistics.

  1. many companies fail to establish a clear definition of digital transformation that fits their company’s unique needs.
  2. transformation is risky and uncomfortable, even under the best of circumstances. 
  3. transformation proves intimidating, especially when undertaken in one momentous sweep.
  4. a company’s own culture can get in the way. 

Let’s take a closer look at the pitfalls facing today’s companies and how to make successful change your company’s top priority.

Defining Digital Transformation

What is digital transformation?

The introduction and optimisation of digital technology into key areas of an organisation.

Simple enough, right? Wrong! 

In practice, it can quickly get messy and complicated. Especially when there’s lack of an overall vision or mode of transport.

You see, transformation demands a fundamental reworking of how your company functions and offers value to customers.

It necessitates a cultural change and demands that organisations remain on the cutting edge of experimentation. It also requires technological sophistication and capability.

A digital transformation definition leaves no room for the status quo.

This process also looks different for every company, and it begs the question. How should your company define digital transformation? 

The Role of Discovery and Recalibration in Today’s Business World

Part of the problem with change lies in what companies have traditionally been founded upon. In the past, companies were designed around one unique value proposition and a series of associated products and services.

But this organisational system has no place in the dynamic Digital Age. Dealing with disruptors, start-ups, and an endless parade of new technology makes a static approach obsolete.

Today’s companies should be seen as organisational systems that allow for constant discovery and recalibration. Yet, constant discovery and recalibration can fundamentally shake up your business model. And that, quite frankly, feels scary. 

Of course, comfort won’t help your company stay digitally competitive.

Making a Risky Proposition Palatable

Did you know that 71 per cent of consumers expect a consistent experience across all channels? Yet, only 29 per cent report getting it. 

Sure, transformation represents a risky proposition. But your customers are demanding it. To survive today, companies need to change their business models. 

We know this can feel overwhelming and dangerous in a business environment without certainties and guarantees. 

Nonetheless, you need to look at transformation as your friend instead of your foe. You also need to get comfortable with experimentation and even failure. This may include walking away from something your company has done for a very long time. 

While difficult, now’s not the time for nostalgia or sentimentality. Shifting the way you think will make it easier to proceed with courage and flexibility in the contemporary business world. 

That said, changing ways of thinking and doing business remain among the biggest obstacles your company faces when it comes to moving forward. Having a strong vision, one you can inspire stakeholders and employees to embrace, is another. 

Transformation Can Feel Overwhelming

Digital transformation should occur in stages rather than one massive shakeup. After all, it involves fundamentally changing company thinking and culture, which doesn’t happen overnight.

When you move too quickly, radical change can overwhelm you and your employees. It can feel like more trouble than its worth. (Perhaps that’s why 1/3 of transformations fail?)

Remember that transformation is not achieved by a direct charge into the thick of battle. But rather it’s best pursued through a series of strategic changes that add value, gather momentum, and transform company culture over time. 

When Company Culture Gets in the Way of Needed Changes

In some instances, a company’s own culture can get in the way of a successful transformation. In the past, innovations were introduced to companies through their IT organisations and had limited scope and reach.

But now corporate CEOs often initiate radical change, as they should. Visionary CEOs represent a major force when it comes to unprecedented change, and their involvement is crucial to today’s digital transformations. 

Of course, this also means that companies who don’t have CEOs spearheading change will suffer and fall behind. In other words, IT departments can no longer go it alone. 

That’s not to say that IT organisations can’t provide direction for valuable small-level changes. But CEO-mandated digital transformation represents the future. 

A Road Map for Your Company’s Journey

It’s helpful to look at digital transformation in terms of a road map. Companies can be plotted on the map in one of four categories when it comes to tracking their journey towards transformation:

  1. Frozen
  2. Flailing
  3. Failing
  4. Flying

Read on to learn more about these four spots on the road map. Where is your company on this journey?

Frozen Companies

There are “frozen” companies on the map because their leadership doesn’t know which direction to head. So, their digital transformations remain stagnant. Forty-five per cent of executives confess falling into this category. 

Flailing Companies

Flailing companies are those with a great vision. They know where they need to go, but they lack the digital sophistication and capability to get there. In essence, they suffer from no mode of transport. 

Failing Companies

Failing organisations are those that have spent lots of time and resources to increase their digital capabilities and technologies. But they don’t know how to quantify the business impact of these innovations and transformations. 

The Flyers

This is where every company longs to be. The flyers are the front runners of transformative change. They know what they’re doing and why. And they enjoy unprecedented success as a result. 

The “Burning Platform” Metaphor

When we let go of preconceived ideas and are willing to think like visionaries (even when it falls outside of our comfort zone), we find ourselves in a better place for change. In essence, we need to evolve into disruptive thinkers. 

One of the greatest things about digital transformation? Once you develop this way of thinking, it’ll radically transform how you approach business as usual. But it requires your company’s readiness to adopt new technology and processes. 

This begs the question: what allows some companies to become high flyers why so many others remain mired in the frozen, flailing, or failing stages? 

The “burning platform” is a metaphor used today for companies considering radical change. But this isn’t a great place to be standing when making long term decisions about your organisation.

After all, if a platform’s burning, then the warning signs of wide systematic failure can no longer be ignored.

In the lead up to a breakdown, many red flags crop up. If these are dealt with properly before reaching a “burning platform” moment, then you’ll never have to deal with panic. After all, panicked thinking leads to reckless decision-making

So, let’s discard the “burning platform” mindset right now. In place of it, you need to start cultivating lightbulb moments. 

What You Can Learn from High Flyers

When you take a look at the high flyers, certain commonalities emerge. For example, each of these organisations has had a lightbulb moment where they realise that without change, their organisation will diminish.

The second thing they have in common is a management cohort filled with visionaries. What do these visionaries have in common?

The ability to stomach things such as:

  • Volatility 
  • Uncertainty 
  • Complexity
  • Ambiguity

These are all characteristics of the business world today. Developing a thick skin to these uncomfortable conditions will lead to better business practices and decisions. What’s more, you’ll become proactive instead of reactive. 

Besides dealing well with discomfort, visionaries inspire people to move forward on the journey with them. They are experts at creating “followership.”

It’s one thing to be a leader but quite another to have people following behind. In other words, you can’t just describe your vision and walk away. Your employees have to buy in, feel energised about it, and work hard to make changes happen. 

What You Can Learn from Frozen, Flailing, and Failing Companies

There’s also much to be learned from companies who fail.

Throwing technology at a problem during a moment of panic won’t fix it. There needs to be a thorough understanding and strategic allocation of digital innovations and technology.

Digital transformation needs to be more than a tech project; it must be a cultural change. That’s why forty-one per cent of leaders say their transformation efforts have been a waste of time. 

Failure happens when change gets approached in a piece-meal manner without full buy-in from company leadership. This is why the impetus for radical transformation needs to happen at the executive level. 

The antidote to organisational trauma remains staying proactive. That means paying attention to the latest trends and channelling them into visionary or lightbulb moments rather than time spent on the “burning platform.”  

Don’t become the next Tower Records or Blockbuster Videos. Instead, distil your company’s value to the customer down to its essence and then explore broader ways to deliver it. An example from the car industry illustrates this point. 

One Car Manufacturer’s Race to the Head of the Pack

One German automaker has come to typify forward-thinking. How? By investing in a series of technologies that fall well outside of the confines of automobile manufacturing.

Because of a successful digital transformation, they’ve come to see themselves as a mobility technology provider that also happens to make cars. This shift in mindset has led them to invest in new services outside of their traditional purview.

What do these investments look like? Some include:

  • Smart parking
  • Ridesharing
  • Multi-modal transport

The result of their lightbulb moment? They now boast 70 million customers who don’t actually own one of their vehicles!

How did they achieve this incredible feat? By realising that at its heart a car is a mechanism for getting from point A to point B.

Once they recognised this, they started thinking very differently. As a result, they found new and innovative ways to get their customers from point A to point B, regardless of whether or not it involved one of their cars.

Pharmaceutical Company Embraces Award-Winning Change

A century-old pharmaceutical company in Australia also offers another great example of what a lightbulb moment can do.

The company realised that regulatory changes were costing them $14 million each year. Without action, they knew their position in the market would soon diminish. 

Their vision? To utilise the latest in cutting edge technologies to provide their customers with a better experience as well as address regulatory changes.

So, they replaced three existing enterprise resource planning (ERP) assets that helped integrate the important parts of their business with mobile-first architecture. They also modernised their supply chain. 

This led to immediate access to customer records and other information for employees as well as mobile functionality for customers.

The result? More personalised and customised experiences for customers. And better safety guards, too.

Throughout the process, the company built support within its organisation by consulting with its employees. This allowed them to create greater buy-in and a thorough understanding (at every level) of why the changes needed to happen. 

They also entered and received a variety of industry awards. These awards further enthused stakeholders and employees, inspiring them to work harder towards the company’s ultimate vision. 

Small Charity Organisation Embraces Digital Transformation with Big Results

When two young men from Queensland launched a program to help tens of thousands of people experiencing homelessness by offering free laundry service, they never anticipated the technological challenges they would face.

But three years of exponential growth transformed their company from two employees to 20 full-time employees and countless volunteers.

They also went from driving one second-hand van to operating three shower vans, 16 laundry vans, and one hybrid van.

Today, they launder approximately six tonnes of laundry during each of their events. The cheap network they’d pieced together three years prior could no longer handle their secure, enterprise-grade data storage and networking needs. 

So they turned to a digital agency who could help them evolve.

Today, they have access to an intuitive dashboard that lets them easily manage volunteers and monitor their fleet. They can control all onboard devices and appliances in one spot.

They now see digital transformation as integral to their business growth moving forward. What’s more, it represents a crucial resource in their attempt to make the world a better place. 

Evolving for a Changing Market

Although the prospect of transitioning from traditional means of doing business to a more digital approach can feel daunting at first, with the right partners by your side, this evolution can proceed with care and respect.

This process requires planning, dedication, and hard work. But when done right, your company will soon be enjoying the multi-layered benefits of integrating its business systems into the digital landscape. 

Ready to learn more? This link gives you tips for successfully handling the digital transformation