Digital Transformation is Cultural Transformation

Digital transformation is coming our way, whether we like it or not. More and more industries are being disrupted by new and/or innovative players in the market place. And a lot of existing businesses are scrambling to prepare themselves for whatever will happen in their own industry. The reaction amongst top management varies, of course. Some become paralysed, and do nothing. Others run out and hire Digital Directors. Others again task their CIO/IT Director to “digitise” the business. Very few take the necessary steps to actually prepare themselves for disruption – or better yet, drive the disruption themselves.

Don’t get me wrong. The IT department has a lot to contribute in a digital transformation process. Their skills and commitment is essential to a successful transformation. In some cases, even a Digital Director makes sense, if that person is put in charge of looking at the entire organisation – from production, to customer service, sales, marketing and fulfilment, explore new business opportunities, implement changes and oversee training. Of course, that person has to report directly to the CEO. The best idea, is to have the CEO drive the process himself/herself.

The truth is that digital transformation is more about shifting culture, perceptions and actions, than actual technology. Computers and technology will always be essential to the process, but unless you are willing to change the way you do business, the technology itself won’t change anything. So what to do? How can a running business retool itself to become a leader in digital transformation? Obviously, that depends on the industry, but here are 5 points to consider when starting a digital transformation process:

1. Recognise the cultural shift in society

Look at your customers. How do they live today? What role does your company and brand play in their lives? What role does technology play in their lives? In today’s day and age, technology is fully integrated in people’s lives. It’s not novelty anymore, it’s embedded in everything they do, from banking, to shopping, to communicating, to entertaining themselves, to pretty much everything that’s going on. If you understand the shift, you’re halfway there, in terms of recognising the opportunities ahead. But there’s one other thing you need to understand, and that is your customer and potential customer’s pain points. Innovation is driven by recognising there is a problem. If you understand what the problem is – in relation to your brand/company, in relation to your industry, and especially in their own lives, you will have a much greater chance of success.

2. Change your culture first

Look at your team. Do they have the ideas, skill set and drive to change the business? They could, I bet you haven’t asked. If they don’t, only a combination of new hires and long-term training will work, but you’d be surprised how many employees have amazing ideas. They’re just not asked, or involved in strategic processes. That needs to change immediately. Let it be known that your company encourages new ideas. Talk to your team, and not just the senior and mid-management. Speak to your customer service representatives, your production team, your fulfilment team, your receptionists – you may find great ideas where you never expected it. Create a culture of sharing, and encourage “crazy” ideas. Make it safe for team members to suggest things that can’t be done. Don’t ridicule ideas, and don’t scapegoat people if the ideas turn out to be failures.

3. Create a task-force
Find your most creative employees and leaders, and give them the opportunity to search for the future of your business. Skunk Works, is a famous development programme inside Lockheed Martin. The unit has given name to  Skunkworks projects, which are innovation teams that operate inside a company, without the constraints of corporate structure. See it as a start-up within your company. Give them loose boundaries and a strong mandate to change. Put someone in charge who understands culture more than technology, someone who is creative and problem-oriented – and someone who sees collaboration as key to everything. Let them turn every stone in search of opportunities. Don’t define your business so narrowly that you can’t allow yourself to peek over the fence. Of course, know which business you’re in, and don’t leave your core competency behind. Just be open.

4. Define your digital transformation strategy
Digital transformation is not a one-time action-plan that ends when the business is “transformed”. It is a continuous strategic process, that prepares your business for change over time. It redefines your business goals, your industry, your corporate culture – and of course, how you implement technology in your business. The only way to manage a process like that, is to develop a strategy that is tight enough to point out a clear direction, but flexible enough to allow for societal shifts. The strategy must integrate all functions in the organisation – everything is connected.

5. Create digital transformation ideas for your customers – not for your Board of Directors
The best place to start looking for ideas is in people’s everyday life and needs. The core of any good idea is that it solves an actual problem for the customer. If it only serves to promote your brand, well, then it probably won’t even do that. Ideas have to come from real problems. Now, those problems may not be something the customers think about. Maybe they have come to believe that “it is what it is”. Don’t expect your customers to have the solution for you (they could, but usually not). You have to recognise the problem they are facing, and find a new way to solve that problem. Always, always make sure the solution is on the customers’ terms, not your own. Money follows great solutions, and if you can engage customers through innovation, the ROI will come, and your board will be happy.

Be prepared to meet challenges, both cultural and technological, but great ideas will always prevail. Meet negative reactions with enthusiasm and belief in the future. And don’t forget that having people criticise the plans is a good way of ironing out creases in your strategy. Resistance is a good thing, but only if you push through and learn to distinguish between valid criticism and corporate inertia. In the end, your customers will judge you more for not doing anything, than for making minor mistakes. So as they say in Silicon Valley “Fail fast. Fail often”. Learn form mistakes, find the real-world challenges, and solve them. If you don’t, someone else will.

Erik_Default_2
Erik Ingvoldstad is the Managing Director of Acoustic.
Follow Erik on Twitter @ingvoldSTAR, follow Acoustic at @AcousticAgency
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[Main photo by OFFICIAL LEWEB PHOTOS, under CC]

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