Transformers, Age of Advancement - The Four Pillars of Digital Transformation
OK so maybe I shouldn’t have quoted Transformers, Age of Extinction. A movie that scored a whopping 18% on Rotten Tomatoes. However, it seems apt in today's world: a large number of organisations’ most important task over the coming years is transforming their business and if they don’t succeed, then extinction is a real probability.
When we say ‘transformation’ we’re not just talking about developing a new product line, updating a value proposition or implementing a new CRM. We’re talking about fundamentally changing the way a business operates both internally and externally. We are in an age of advancement where the few that get it right won’t just be a little further ahead, they will be on a different road, in a new vehicle moving at a completely new speed.
In this article we attempt to explain some of the key constituent parts required to make the right decisions, set a direction and then make it happen.
The 4 Pillars of Successful Digital Transformation
What percentage of companies need to transform in some shape or another to be current in the next 3-5 years? Pretty much all of them.
How many companies that have undergone transformation met their original targets for success? Not many.
The latest reports show approximately 26% of companies say that their transformation was successful at both immediate performance improvement and the ability to sustain improvements over time. The latter is absolutely crucial. What good is all this work if it’s only a short term fix?
So what separates the leaders in this field from the rest? Well, the ones that deliver success seem to lift their businesses across four key areas:
Research and data - driving strategy
Vision and leadership - creating direction and culture
Technology and creativity - blended together to create great experiences
Team structures - allowing fast execution and delivery.
1. Research and data
This is the foundation of great strategy. Most companies today have access to much larger amounts of data than they did in the past but making sense of it and lifting strong insights, which ultimately drive strategy and direction, is still a challenge. We have more data but less time to understand it.
Today's challenges are firstly about management of data to ensure quality - if you’re making decisions with information that is incomplete or invalid that’s a dangerous place to be.
The second challenge is creating a core single source which can stitch information together in a consistent format. This can then start to be interrogated and questions asked to understand patterns and links.
The third challenge which will unlock future performance is using mathematical algorithms within a neural network to run large-scale analysis to lift findings that a human can’t uncover. However, for most this is some way into the future. Unlocking the potential of AI in this way requires a great deal of work to first get data into the right state.
Ultimately, combining market, competitor, business and customer data provides a good starting point.
However, in today's ultra-connected world understanding emotional drivers and unconscious communication is what unlocks the true potential of these insights.
2. Vision and Leadership
This is probably the most important of the pillars. Creating a compelling vision of the future that teams buy into is essential. This needs to be clear and easy to understand and teams need to see how it links with their own personal goals too. The result is a shared sense of purpose.
Within each of us is the need to feel we’re part of something bigger than just ourselves.
Leading transformation requires a different approach today, it’s about moving from control to vision while at the same time staying in touch with what’s going on within the business and walking the floors. When leaders spend time role modeling the behaviour changes that they want to engender it significantly increases improvement and adoption.
A purely directive style leadership ONLY steals from the future. It does not develop people, it does not create ownership and it does not result in accountability. What you end up with is a sort of learned helplessness. As a leader, everything that can be delegated should be delegated. Let me just repeat that...as a leader EVERYTHING that can be delegated should be delegated.
What we see working is developmental delegation, that is to say, seeing every opportunity as one where someone can be pushed and improved. Striking the right balance here is crucial, an understanding of skill set and style is essential before delegation.
We can’t just delegate critical tasks with minimal information and no support to junior members of the team, that would result in a bad situation for everyone. We have to assign the right tasks to the right people and then work out which management style is required to support them. That might be regular check ins, serving as a sounding board, autonomy up to a certain level, etc.
A continuous improvement approach - both during and after the transformation project - creates the long-lasting change required for teams to really evolve. Here at Lab where someone currently sits, in terms of a skill level, is less important than how quickly they are moving forward. This is the true across the business including the the client-facing project teams.
All of this results in big change. At companies where the senior team communicated effectively throughout the organisation, in an open and honest way, the companies were eight times as likely to report success. *source McKinsey - ‘How to Beat the Transformation Odds.’
Yes, you need an inspirational vision of the future. Yes, you need a strong roadmap that defines, as a starting point, how you plan to get there but that is just the beginning.
Fundamentally to drive success it’s about people over plans.
Developing teams and individuals so they feel they can ‘own it,’ that they can create and present new ideas and are empowered to test these out creates momentum.
The leaders and influencers within a business create the weather, they have a disproportionate effect on how everyone else feels. Their energy, approach and ability to deal with a crisis is pivotal to the creation of high performing teams.
Leaders’ behaviour effects 70% of the climate within an organisation, and 70% of this is how they deal with a crisis. *Source Holos - ‘Stealing From the Future.’
3. Technology and Creativity
We’re in a world where it’s never been easier to try out the latest technological gimmick, reach an audience or get going on a new platform. But to really stand out and deliver results all of these need to be blended with ideas and creativity.
From a messaging point of view, we can narrow our sights down to demographic data, interests, intent and other signals. There has never been a better time to communicate with a specific audience. However, this has, to some degree, created the perception that great technology will solve the problem and we’ve lost our way creatively.
The companies that stand apart are blending creativity and an understanding of both the user and channel.
The challenge for us is to increase creativity as technology becomes more ubiquitous.
In 1963, sadly no-one got to hear President Kennedy’s hugely important Trade Mart Speech. But in 2018, Rothco’s campaign for The Times used breakthrough audio technology and painstaking sound design to bring his ‘Unsilenced’ speech to the attention to of over 1 billion people around the world. This was one of the best examples I’ve seen of the latest technology being blended with creativity to create an amazing result. (Check it out here.)
4. Team Structures
The way teams are structured, what they do and how they work together are very different today to how they once were. One reason for this is the fast-paced nature of the digital world. It’s increasingly risky to wait for long periods of time before delivering a new brand, website, system or product.
In addition to this, we are in an ever increasingly complex world where knowing every decision within a project before you start is not possible. Yes, a project should have a very clear vision and set of objectives. It should be defined in terms of approach and have a solid understanding from a delivery vs. budget vs. time perspective.
But there are usually a number of unknowns and resulting prioritisation that has to happen on the fly as the work unfolds. The project team’s potential for success then depends on how good they are at solving challenges.
To solve challenges effectively as a team you need trust, openness and regular communication. Whatever methodology you use, these hold true.
For the most part we’re seeing that smaller teams, with clearly defined project or product owners, who create fast feedback loops and take decisions quickly, succeed. Standups, planning, working in sprints, retrospectives and velocity scores are the type of things you’ll see which help deliver this approach.
"Your people must learn to be masters of their own fate." - Optimus Prime
The game is about lifting all four pillars at the same time. It’s about behavioural change as much as it is about technology. As we move into a world of greater VUCA (volatility, uncertainty, complexity and ambiguity) the companies that are able to deliver transformation are going to be playing an entirely different game to the rest.
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The key pillars of successful digital transformation are:
Research and data
Vision and leadership
Technology and creativity
- Most digital transformation projects do not fail because of technology and strategy faults - but because of people not being prepared to change behaviour. Here's what you need to know to avoid failure.