How to really make digital transformation work for you

Very often executives become negative or even fearful when the term "digital transformation" is mentioned. The main factors driving further anxiety around this topic are the budget-busting and risk taking. 

 But as T.S Elliot teaches us: "Only those who will risk going too far can possibly find out how far it is possible to go."

 Digital transformation should be adopted by companies who want to:

-       Merge technologies with business strategy

-       Stay ahead of the competition

-       Automate processes

-       Increase operational efficiency

-       Save money and upsurge profits

According to MIT Centre for Digital Business, "Companies that have embraced digital transformation are 26% more profitable than their average industry competitors and enjoy 12% higher market valuation.

 For digital transformation to have real impact and be effective, it must be continually assessed and updated as a core part of your business strategy 

 Digital transformation is about so much more than just having a digital strategy – and it is certainly different to IT transformation.

 It is not something you can simply pass to a chief digital or innovation officer. Unless organisations think about how this potentially disruptive approach can affect their business model they could well end up getting it very wrong.

 It is therefore true to say that it is more about business strategy than just digital strategy.

The term “digital transformation” has been used so widely over recent years that it has potentially lost some of it’s meaning. It can cover so many aspects of a business including finance, communications, HR, customer services – and IT of course! To deliver the best that true digital transformation has to offer, each of these areas can be engaged and benefit greatly.

What all enterprises really want is to have increasing levels of operating efficiency and to enhance its customer experience – which is why digital transformation is more about business strategy than digital strategy.

The best customer experiences are almost always also the most operationally efficient for the enterprise which is why this is of such critical importance.

Don’t be afraid to fail – but always fail forwards.

It is often difficult for a C-level to let go of control, in which case it is recommended to do this in small steps. Once you have taken those first few steps it then becomes easier and you learn that you don’t always have to be in control.

Once chief executives have challenged themselves, they can then ask others to do the same. Effectively inviting them up the leadership ladder and enabling other business leaders to allow their employees to fail is also vital. If you don’t allow employees to fail, they won’t experiment or innovate, which can be really restricting

While chief executives understand only too well the challenging competitors who are more nimble disruptors, they are often paralysed because they are creative and can see the possibilities, but are afraid destroy an existing business model that still makes money.

One step at a time

There are a few different approaches which can be taken.

To create an innovation lab or area, to use an agile approach which allows experimentation from within or to adopt a top down approach which then permeates through the whole organisation.

What is now increasingly effective is to build less but experiment rapidly and continuously in your digital environment.

In Formula 1 simulation is transforming the speed at which organisations can develop new products and approaches because there is no longer a need to build a physical prototype. This delivers a compressed timescale and reduced cost base.

It is critically important to stay close to your customers and find ways to become more agile, speeding up the cycle of testing concepts and implementing them at scale.

The fact is that digital transformation can be painful because digital technologies affect so many different areas but it can also transform customer and employee engagement as well as optimising your operations. If you don’t do this you will not be able to stay in the game.

The same thing happened in the Industrial Revolution. Those not adapting and embracing the changes were displaced by some level of automation.

So a key question now is will business leaders embrace new business strategies? People talk transformation, but they often only want tinkering, as they think that they are not standing on the burning platforms that would make them jump.

I am interested to know what you are doing on this journey – please feel free to connect.