Digital transformation has become the buzzword that every organization seems to be talking about. The pandemic quickly brought about many changes, and businesses have had to adapt to this rapidly changing environment. Digital transformation has now become a necessity for almost all industries, even those that wouldn’t ordinarily consider implementing it. However, too many businesses and the consulting firms that help implement these changes focus on the technology and technical aspects of digital transformation. From my own experience helping businesses implement digital transformation, I believe we have to first focus on the basics.
1. Get clear on your business strategy and model:
In order to successfully apply digital transformation and achieve meaningful change, the overall company strategy needs to guide the process. Getting clear on the industry dynamics, the external environment, the kinds of customers you serve, which needs you answer and how you provide value are the basic tenets of strategy, yet are often overlooked, especially when it comes to digital transformation strategy.
For instance, I recently consulted for a fashion company that wanted to achieve speed, specifically, to increase speed to market. The company follows a cost advantage strategy, and to satisfy their consumers it’s important that clothes move from runway to store as quickly as possible. Once we were clear on the company’s overall business strategy, we were able to clarify the goals and steps it would take to get there. The company embraced digital design technology and implemented it into its supply and distribution chain, which in the end increased their efficiency by 30 percent, and reduced costs by 25 percent.
2. Focus on the invisible:
While we tend to emphasize figures and numbers, it is also critically important to talk about the intangible assets of the firm, such as organizational culture. While a firm may utilize digital transformation and see concrete and measurable business results, it won’t last long if the organizational culture isn’t there to support it. The reason Google has become a rather successful company is because of the organizational culture they’ve nurtured and built. On the other hand, we’ve seen previously successful companies such as Blackberry and Nokia fail. In both cases, leadership failure and organizational fear had taken over; this led to a failure to continually innovate and respond to the external changes that were taking place.
When you have an organization that is built on openness and clarity, you can leverage the employees of your own firm in order to keep innovating, because they will be the ones closest to your consumers and will know what their real needs are.
3. Customer is King!
The main goal of digital transformation is to keep customers happy by meeting their needs and providing value to them in the best possible way. Certainly consumers today are accustomed to getting what they need, when they need it. They are also extremely digitally aware, understand the capabilities, and expect and appreciate a good online customer experience.
Clearly, technology has completely changed the way consumers interact with your business. Today, typically the first contact you’ll have with your consumer is through your online presence. Digital platforms are now the drivers of customer engagement—and engaged customers lead to better business performance.
Undoubtedly, the inherent speed and capacity for consumer connection that a company acquires through effective digital transformation provides an excellent opportunity to listen and rapidly respond to customer habits, needs, and expectations. It’s one of the reasons Steve Jobs was so powerfully effective: when asked whether he was worried about Blackberry, his answer was that he simply listened to his customers and, with his team, created a product that met their needs.
4. Be quick to adapt and respond to change:
The nature of digital transformation requires constant adaptation, adjustment, and change. It is imperative to be aware of the external dynamics taking place, while allowing for flexibility and agility to be ingrained in the organization. In fact, borrowing a page from Agile methodology, a continual cycle of planning, executing, and evaluating is essential for corporate health and empowers a company in meeting customer needs. Further, adaptive, flexible processes are fundamental to a key business concept we’ve heard over and over lately: the ability to pivot. This ability has no doubt saved many a business during this past year of challenge.
Digital transformation works if organizations and their leaders get back to the fundamentals of strategy and ask the right questions: What business are we really in? Which customers are we serving? What do they need? How can we serve them in the most valuable way? And once these questions are answered, the next step is to focus on the organizational culture that will allow the digital transformation to thrive within the organization. Digital transformation only works when company leaders and employees drive it.
