Digital transformation must be understood as the journey towards achieving digital maturity, not just a technology modernisation initiative.
I have written in the past about the critical importance of a true digital transformation program.
The risk of being unprepared for and unable to respond to multi-dimensional disruptions is too high to stay passive.
But a typical response - implementing an ambitious technology investment plan - certainly won’t be enough if applied in isolation.
The path to maturity consists of two interweaving developments. The first is digital performance, ie the output of our digital efforts. This is the part of a strategy that can be seen and experienced.
Excelling in this space means moving from digital transactions to digital relationships and, if possible, introducing a classy intimacy factor.
In this digital age, disruption comes mostly from changing the customer experience, by reinventing engagement processes with new technology capabilities.
The book industry has been disrupted by Amazon, the taxi industry by Uber, the music industry by Spotify, the hotel industry by AirBnB and the advertising industry by Google—among many other examples.
Digital performance is their game changing common factor.
But these examples are based on organisations that were born digital. For established organisations with ‘industrial DNA’, reimagining engagement processes is difficult. Making them a reality is even more difficult. The real challenge is in sustaining it once implemented - and this change needs to happen in the very fabric of an organisation.
Let’s imagine a restaurant where we need to change the customer experience. The natural thing to do is to alter the front of the shop. Perhaps with a new thematic approach, new layout, new menu and new service.
If we don’t change the processes and the mindset at the back of the shop — kitchen, suppliers, recipes and cooking skills — the new front-end will create tension with the back-end that won’t be sustainable.
That is why the second development is the most important. This process must be the one giving the organisation the required aerodynamics for the digital race. Acquiring digital DNA is the most difficult part of the transformation, because it is about us. It is about people and organisational arrangements, and the way we perceive, think, understand and do things.
This example may seem obvious, but its rationale is not followed by most organisations. Ornamental changes facilitated by new technologies are applied, but the essence of the organisation remains the same, creating tension, costs and inefficiencies that, sooner or later, will become unbearable.
Digital excellence demands respect of three essential principles:
- Premium experience must be delivered across all the digital customer touch-points;
- Information must be consistent and available where and when needed;
- Each system and process must be considered as a gear of a much more complex machine.
The experience we deliver is what defines us. Information is the enabler of that experience. Systems and processes are the facilitators.
Unfortunately, most organisations tend to work without those principles in mind. They focus on partial experiences and portions of the information, and on those things that maximise functional performance but not necessarily organisational performance.
They take a functional approach to decisions and not necessarily a holistic stakeholder approach. They build systems in functional towers, based on what process they need to automate and what function they need to do for their business.
Governance arrangements, KPIs, bonuses, recognitions, auditing processes and many organisational controls and incentives are centred on vertical structures. They tend to prioritise functional delivery, generally not observing how the organisational “info-structure” is fragmented, or how the smoothness of the digital touch-points transitions is affected.
Digital requires new thinking, and that new thinking doesn’t come naturally. Our learnings and instincts might deceive us, as they have been adjusted for so long under a different mental model. Often organisations assemble information and digital content around the departments that manage them. This creates a siloed information architecture that rarely reflects the way customers think.
Digital DNA is about leadership and it is first an organisational problem. It requires to shift the focus from internal structures to stakeholders.