A 2018 Couchbase survey found the majority of CIOs believed those companies that did not keep up with digital innovation would last less than four years before going out of business or being bought by a competitor — caused by a downward spiral of declining customer experience, loss of customers and a fall in revenue and resources.
The impact of digital transformation is huge, which can make it seem like an insurmountable challenge. Instead of refusing to face the reality of digital transformation, knowing these five myths will help you face it with more success.
Myth #1: If you’re already successful, you’re more likely to successfully digitally transform processes
Reality: If things seem to be going well, then you’re unlikely to transform anything meaningful
Grasping the imperative for digital transformation can be a challenge, especially if nothing seems to be wrong with the way your organization is currently running. Take Disney. In 2015, Disney announced it was investing $1 billion in IoT sensors for is parks. “Magic Bands” with RFID technology now act as hotel room keys, ride tickets and payments. By tracking customer movements throughout the parks, rides with excess capacity are identified so customers can get notified of rides with short waits. Employees get notified of who they are interacting with, so Mickey Mouse can wish a child a happy fifth birthday. Not only are these Magic Bands making customers happier — by making it easier to pay for food and eliminating lost hotel room keys — but they also help Disney improve customer experience.
Did Disney need to radically transform customer hotel room keys and payment? Were things fine the way they were? Maybe. But executives recognized an opportunity for improvement and took a risk. Most organizations are resistant to digital change when they’ve grown comfortable or it challenges “the way it’s always been done.” Established companies are established because they reach consistent levels of revenue generation, driven by well-understood, consistent processes that rarely change. They are less likely to change as long as the revenue keeps coming in. But on the flip side, they’re much more likely to be disrupted by a new startup with less to lose.
Related Article: Digital Transformation: Why Now?
Myth #2: Digital transformation means updating your website and building an app
Reality: While adding new digital customer or employee experiences can drive improvements, transformation must go deeper
Digital transformation is more than just adding an app to your business model. It requires fundamentally reshaping the way you operate, which requires reevaluating people, processes and technology. To successfully launch a digital transformation strategy, you must have a vision for where — and why — you want to change. By building a vision for transformation, it’s easier to shift ingrained organizational behaviors to reshape culture and set tangible targets for digital transformation initiatives.
Culture is the often-forgotten element that drives digital transformation success. Agility, adaptability to change and the ability to question long-held beliefs are key factors in a digital culture. You may find that your front-line employees and your mid-level managers are much more open to change than your executive team. Remember that when you’re driving this fundamental change, people (and the culture they create) are a crucial element to success.
Myth #3: Your executive team will be the fundamental group to drive successful transformation
Reality: Grassroots digital transformation has a greater chance of success
Organizational transformation traditionally originates from the top. In fact, Gartner notes that while the idea of shifting toward digital business was speculative for most CEOs a few years ago, it has become a reality for many, with 42% of CEOs beginning digital transformation initiatives in 2017.
Change can originate from anywhere in an organization, and lasting innovation can emerge from grassroots efforts. Disruption is taking place at the grassroots level and, as success is achieved and word spreads, it is moving upward.
You’ll find that it’s difficult to make your initiative work if transformation is simply mandated from the top down. When ideas originate from the bottom up, they tend to gain more traction and get stronger buy-in. However, successful organizational change requires support from leadership, regardless of who is leading the charge.
Related Article: A Roadmap to Grassroots Digital Transformation
Myth #4: Digital transformation isn’t important to customers
Reality: Not anymore. Customers expect personalized service from all the companies they interact with
Blame Amazon. Customers now expect personalized, high-touch service from every organization they interact with, regardless of size or sector. They want to be able to interact with your organization from whatever platform they choose — website or app, social or phone — and to have a consistent experience. In its 2020 Technology Digital Transformation Survey, BDO found that respondents’ top current focus areas for CX improvement included not only the quality of customer support, but also the speed and consistency, plus personalization and user-friendliness/design. Digital is the only realistic way to give customers the experience they’re demanding.
Automation, integration and collaboration technologies will help you change long-standing organizational structures and shape how you interact and engage your customers. This requires you to not just reevaluate legacy technologies, but also drive an entrepreneurial mindset throughout your organization. Innovation can — and should — come from anywhere in your organization, and to drive that mindset, you must drive home the importance of each department in their interactions with customers.
Myth #5: Digital transformation can wait
Reality: The rate of technological change is increasing exponentially — so starting any transformation will be more difficult the longer you wait
A 2018 IDG study reported that 89% of companies had, or planned to, invest in digital initiatives. Digital transformation is unstoppable and affects all industries. It’s “no longer a choice,” and organizations “must transform or die,” according to the study Measuring IT’s Readiness for Digital Business.
Digital transformation isn’t just for startups or consumer companies. It’s important for all companies: industrial and B2B companies, and even government agencies. Large B2B companies of all sizes are already implementing transformation initiatives that are changing the ways they interact with customers. And the longer you wait, the farther behind you’ll be.
To drive digital transformation, leadership and vision are key. Instead of mandating, you must facilitate, empower and challenge your team, driving a shared vision to create something big. Digital transformation introduces new ways of interacting with team members and customers and often requires changes in organizational structure and culture. It’s more than just implementing technology. But with a clear vision and the right strategy, you’ll be well positioned to face the future.