Over the past few months, Covid-19 has been credited as the driving force leading digital transformation for many companies. Organizations that were not already pursuing digital innovation have been thrust into the digital arena and forced to make rapid changes. Regardless of what their strategy looked like coming into 2020, today’s leaders are managing an accelerated pace of change as everyone seeks to serve customers in new ways.
I am grateful that our company’s digital transformation journey began well before Covid-19 forced our hand. Four years ago, we set out to disrupt ourselves — reengineering our processes and customer service strategies with a startup mindset and agile approach. Thankfully, this hard work laid a solid foundation enabling us to quickly pivot as customer behavior increasingly shifted online.
In July, our direct-to-consumer digital business saw transaction growth of 126% compared to the prior year. Additionally, digitizing back-office operations has enabled the company to achieve over $150 million in efficiency savings annually. And, despite the global crisis, we are in the process of deploying an API-driven infrastructure to develop new, digitally enabled revenue streams. None of this would have been possible without several foundational elements.
Whether you run a small business, hold a leadership role at a large multinational company or are part of your organization’s technology team, I hope these five “building blocks” help your organization emerge from the crisis stronger and accelerate your digital transformation efforts.
Digital transformations are a huge undertaking. In an age of instant gratification and the glorification of the overnight success stories, it’s important to set expectations that successful transformations take time. It will happen step-by-step, brick-by-brick, or as one recent headline suggested: “bit-by-byte.”
To succeed, leaders must set expectations from the onset with everyone from the board of directors and investors to employees and customers that transformations will be messy. Strong transformation leaders will cast the overall vision and future state of what the digital transformation will enable, and then break down the stages of the transformation into detailed, digestible roadmaps.
2. Establish A Clear Owner, But Do Not Put Her/Him On An Island
Even though digital transformations are cross-functional efforts, they should be centralized under one leader with a broad mandate, budget and team structure who can align overarching priorities amid competing tasks. Having a single owner also enables a more agile approach to quickly shift as the environment changes (e.g., Covid-19).
I’ve seen many companies learn the hard way by having multiple people in charge of digital efforts, which creates confusion and unnecessary turf wars. Likewise, having one leader but separating them completely from the rest of the organization is easy, but also a mistake. New processes become duplicates of older processes, as re-engineering is harder than starting from scratch. Consequently, legacy customers and departments cannot easily migrate to the new processes, which actually creates an additional cost of maintaining multiple versions of systems and processes. Therefore, having one owner, with multiple areas of responsibility — both legacy and new — will ensure the best balance in trade-offs between speed, cost and true change within the company.
3. Leave No Part Of The Organization Untouched By Digital
True digital transformations consider every part of the organization. This is not just an IT department initiative. More than adopting next-gen technologies like artificial intelligence and machine learning, the most successful digital transformations take a comprehensive approach — from migrating to the cloud, to eliminating paper in all processes, to creating entirely new business models. This type of wide-scale change requires commitment and collaboration across functions. It’s hard work, but in the end, it produces a unified and nimble organization, rather than a disjointed conglomerate of digital offerings and back-office “upgrades.”
4. Be Relentlessly Customer-Centric
Companies that execute successful digital transformations do so with a customer-centric mindset. Everything — from product improvements to new ideas, loyalty programs to marketing campaigns — needs to start with the customer. Consider how to create effectively alongside your customer, incorporating their feedback every step of the way. Test ideas with customers to get objective feedback early, and strive to remove the internal company filter that can unknowingly steer products and solutions down the wrong path.
5. Maintain A Culture Of Experimentation
Finally, whether it’s a new business model or a fresh way of doing things, digital transformations require innovative skill sets across the organization. Leaders of effective transformations create a culture where teams are encouraged to experiment with new ideas and novel approaches to identify what works best before committing resources for the long haul. Oftentimes an edict to do something differently is needed for teams to truly think outside the box, as most people do not like change and will often gravitate to small tweaks instead of true redesign. To best foster the culture of experimentation, leaders need to encourage A/B test results, create cross-functional task forces, and publicly praise individuals who tried something different even if it didn’t work.
Wherever you are on your digital transformation journey, these five tips can enable successful change and drive real results. Over the next few months, I look forward to sharing more highlights from the trenches of a messy, but beautiful digital transformation that’s driving growth even in the face of a global pandemic.