Myth #1: You Need a Digital Strategy
It probably sounds crazy to say that you don’t need a digital strategy when undertaking your digital transformation, right? But it makes more sense when framed this way:
What you really need is a reliable business strategy structured around the digital capabilities of the new normal, and of the future.
This is more than just semantics.
Before the pandemic, many companies were making the same mistake: Creating a business-as-usual legacy strategy and applying some elements of digitization to it, such as moving to the cloud or going paperless. And while there’s certainly merit in both of these technologies, it’s kind of like putting a Tesla motor in a Model T. It’s bolt-on digitization – a short-term solution that may or may not work – as opposed to a big-picture strategy that has ongoing digital capability at its core.
The digital acceleration brought about by COVID means that you must move away from a stand-alone business strategy and a stand-alone digital strategy that you try to mesh together. Instead, one business strategy grounded in evolving technology, with the ability to quickly adapt to customers’ changing needs and demands, will sustain your organization in the new normal and into the future.
Myth #2: Digital Transformation is About Technology
We’ve all heard the alarming statistics about digital transformation, including an estimated 70% failure rate and $900 billion gone to waste in just one year. Harvard Business Review blames these failures on the false belief that successful digital transformations are rooted in technology itself.
However, as the authors point out: “Digital technologies provide possibilities for efficiency gains and customer intimacy. But if people lack the right mindset to change and the current organizational practices are flawed, digital transformation will simply magnify those flaws.”
Researchers from Deloitte and MIT Sloan Management Review reached a similar conclusion: “The real challenge is how to change people’s mindsets, the company culture, and the way people think and do things. It’s a much more fundamental shift than simply adopting technology.”
So, digital transformation is actually about people. The people who:
- Create and execute a future-focused business strategy
- Know your company, industry, needs, and goals
- Use your products and services
- Work in your organization every day
- Make your company agile and able to evolve
- Proactively understand business and technology trends
- Lead your company capably through a culture and mindset shift
We spoke to Kaihan Krippendorff, bestselling author and Fortune 100 digital strategist, who reiterated the importance of people and culture to a transformation’s success. Krippendorff organizes a group of strategy officers from large enterprises, and notes that the challenge of advancing along the digital journey comes up often. “Invariably,” he says, “our discussion leads fairly quickly past the tangible – understanding the technology, mapping customer journeys – to the softer and more human challenges of changing culture so that people shift their behavior. The answer starts with leadership prioritizing a broad cultural change effort, which requires true belief and persistence.”
Myth #3: Experimentation is Risky and Expensive
Experimenting does NOT mean settling on a technology, implementing it, and hoping for the best. That would indeed be risky, and could definitely end up in an expensive mistake.
In fact, true experimentation is a cost effective and productive way to get buy-in, test assumptions, and significantly increase your odds of a successful transformation. When you start small, you ensure the proposed solution meets company goals. If not, you can adjust, re-iterate, and test again.
Consider the alternative: Jumping in to a full-scale implementation based on an incorrect assumption, with no testing and no user feedback. Which move is going to be costlier?
In this post-COVID world, technology is even more ubiquitous, and it’s moving even faster. This makes it crucial that your processes, experiments, and implementations are adaptable and agile.
We discussed this idea with Isaac Sacolick, President of StarCIO and author ofDriving Digital. Here’s his advice: “Starting doesn’t require a substantial upfront investment. It can begin with a leader, a dedicated team, a vision, and a series of quickly executed experiments that enable data capture and learning. Leaders should focus on customer-facing and growth areas first as these should help define the new products, customer experiences, and business models. To be successful, executives must be willing to challenge the status quo and promote data-driven decision making.”
Myth #4: Our competitors are in the same digital position, so it’s better to wait
On its surface, this conservative approach makes a certain amount of sense. Why not let someone else roll the dice and learn from their success or failure, especially now that we’re all dealing with so much uncertainty?
Research from BCG showed that pre-emptive transformation (or self-disruption) results in higher long-term value than reactive change – and it does so faster and more reliably.
In contrast, companies that take a reactive approach to transformation spend more money, take more time, have more leadership changes, and end up with a 50% lower ROI.
You may be saying to yourself, “Wait a minute, obviously I’m in reactive mode, we all are!” Of course, you’re right. To one extent or another, businesses of all sizes are reacting as best they can to these sudden new circumstances. If you think about your competitors who came into this pandemic in generally the same digital position as you, though, which of you will win out in the long term? The ones who continue to simply scramble and react, or the ones who encompass big-picture, proactive thinking and implementation into their re-imagined processes?
Myths About Digital Transformation: Conclusion
“I would advise companies to accelerate digital transformation efforts to better position their company after the pandemic passes,” says Kamales Lardi, Managing Partner at Lardi & Partner Consulting and Chair of the MBA Advisory Board, Durham University. This is certainly a stressful and worrisome time for business leaders. But it also truly presents an opportunity for making your organization stronger and more competitive than ever.
You can find details about our own low-risk, high-ROI approach to transformation here. And for clear, no-buzzword fundamentals on successful transformation, download our free ebook.
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