Real digital transformation happens below the surface. It takes place on a cultural level and reaches deep into the bones of the company. Digital technology is one tool in this process.
Companies that succeed in the digital arena are those that have done their preparations properly, laying the digital groundwork and ensuring that employees, from the top down, have the right skills and attitudes.
Strategy, not tactics, should be the focus on the road to digital transformation.
Digital Beauty is More Than Skin Deep
Digital transformation can only occur when organizations understand their customers’ behavior, expectations and demands. This is where strategy wins over tactics any day. Because, let’s face it, customers think in outcomes, not in departments. The real beauty of going digital right down to the bone is being able to offer the famous seamless experience that customers want.
They don’t want to use one site or app to book a flight, another one to book the next leg of the trip, another one to book a hotel, a ticket to a show, the insurance and so on. They don't care about your divisions, departments or internal structures. What they do care about is their dream holiday. To reflect this, your offerings need to be aligned with your customer wishes. And that’s why digital transformation needs to be cultural, because it involves every single area of your company.
9 Tips on Your Road to Digital Transformation
What follows are nine tips on digital transformation strategy that I’ve gleaned from my own experience and from observing successful transformations.
1. Understand the threats and opportunities posed by digital
Consider what one or two things, if affected, would do to your revenue stream. You need to disrupt these before someone else does. Work from the assumption that anything can change. Just as Uber changed how people order taxis and Craigslist sounded the death knell for newspaper classifieds, your whole industry could be turned upside down in a matter of weeks.
This may mean that you need to take some energy off focusing on the everyday business of squeezing margins, and consider how to change your business model.
2. Start with transforming the culture within your company
This means an end to traditional top-down management, still common in large organizations. There’s no point installing collaborative software if employees are not ready to collaborate, according to Gerry McGovern. You can only get your employees to communicate across and up levels when management has demonstrated that it’s ready to listen. By encouraging and kickstarting change in internal communications and ways of doing things, you make room for innovation and allow voices to be heard.
3. Think digital first
Digital needs to come from the top, but that’s not always easy — senior management may not have had enough digital exposure. The 2014 Altimeter report on digital transformation highlighted the importance of adopting a "digital first" mentality.
According to McKinsey, one solution is to change organizational focus by giving digital leaders operational responsibility for the whole business rather than just for the digital areas. One regional UK bank gave its Chief Digital Officer operational oversight over the whole business, even non-digital areas.
Don’t just think of how digital can improve customer experience (yes, it can!) but also of how it can transform processes in different areas of the company.
4. Improve digital skills across the company, from the top down
Capgemini research with MIT shows that more than three out of four companies consider missing digital skills to be the key hurdle to their digital transformation. If you need the company to think digitally, then don’t just concentrate on new hires. Yes, savvy new digital natives will help move the transformation forward, but training current employees in digital technologies can have just as big an impact. L’Oreal started with that idea, and has invested heavily in training its marketing teams in digital technologies.
5. Turn mentoring on its head
Without being completely ageist, it’s fair to say that most digital natives have a keener understanding of the digital world, while more senior employees may have deeper business skills and experience.
Companies like Tesco and Deloitte are ensuring that different generations of employees get the most out of each other with reverse mentoring. At Deloitte, digital natives mentor "digital dinosaurs" in private one-on-one sessions. As a side effect, the young people mentoring senior employees get to build relationships and knowledge that can help them on their road to the top.
6. Break down the internal barriers
According to McKinsey, digital transformation doesn’t just happen in one department, but across functions. For L’Oreal, it was important to create cross-functional teams including staff from marketing, research, communications, manufacturing and sales. But remember that these teams need to have clear support from management as well as the right resources, responsibility and accountability. Another important factor is that such teams need to be developed with a long-term view rather than with a campaign concept, according to Altimeter.
7. Stay agile
Whether it’s the technology or the people, you have to make sure that you have the flexibility to change when you need to. Many companies, like Netflix, see the cloud as an immense opportunity to be flexible. But Netflix also decided to give developers more responsibility, and this allowed them to produce new services and try them out on customers rapidly without wasting months building things that customers may not have wanted.
8. Think multichannel: from offline to online, and everywhere in between
That’s exactly what Burberry has done, with an increase in sales of about 10 percent. Burberry mobile commerce doubled its share of sales because of an upgraded platform. A key element of the brand’s success was its focus on promoting itself across channels, including new social networks like WeChat in China and LINE in Japan, as well as Snapchat and Periscope. In China, Burberry enabled e-commerce orders to be fulfilled in the local distribution center and from stores.
To enable this holistic experience for both consumers and other stakeholders, you need to adopt a digital platform that’s channel agnostic, and allows you to easily publish and reuse content and assets.
9. Work on integration, rather than individual responses to digital transformation requirements
This means you need the right infrastructure and platform to build upon. Ensure you have a flexible digital business platform that will allow you to concentrate on strategy rather than technology.
Digital transformation means that you need to have a platform that is ready to integrate all the tools you need to create unified experiences for all your audiences, from employees to consumers. It needs to be powerful enough to integrate with external data and to deliver omnichannel experiences.
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