Overcome the Challenges of Digital Transformation with Vision Setting
Only 3 out of 10 digital transformation initiatives succeed, according to McKinsey & Company. This means you’ve got 70% of businesses reluctant to pivot from their strategy and an inestimable number of companies just too afraid to start one.
If the appetite for digital transformation is so strong and long-standing, why does it keep failing? Digital transformation challenges are many and great. To name a few:
- Change management
- The incorporation of new technologies and processes
- Executive buy-in
- Labyrinthine legacy applications
One of the biggest stumbling blocks I’ve noticed in my work as a Digital Transformation Director is a lack of communication, alignment, and execution from all levels of the business.
To overcome this, you need to understand how to create a vision, know what goes into that vision, and how to set it (and reset it). Vision setting is crucial to an organization’s digital transformation.
Why Do Companies Fail at Digital Transformation?
Imagine a group of people is told to travel to Japan. Each person in that group plans differently, gets a different set of directions, and packs their bags differently. One person arrives in Hokkaido in two weeks. Another arrives in Tokyo three months later. One person doesn’t manage to get there at all. And 12 months later someone arrives in Narita but remains stuck in the airport. The destination was unclear (Japan’s a big place after all) and every traveler was left to their own devices on how and when to get there. The group’s trip is not successful.
Digital transformation plans are fraught with a similar dissonance, and it’s pervasive. Organizations falter on the path to digital transformation when there’s a wide gap between strategy and execution. If you’re looking down at the chasm between these layers, know that it’s not just you. HBR suggests that only 8% of executives are good at strategy and execution.
At the strategic layer, you and other executive types set the initiative’s vision. You decide the direction of the company (new markets to enter, new channels to open) and determine the balance between modernizing current systems and processes and creating new technologies.
Then there’s the project layer. From an IT perspective, this would be a group of developers, testers, UX and product designers, business analysts—to name a few—collaborate to create a portfolio of applications. These applications drive business value (i.e., create revenue, save on costs, increase customer engagement, etc.). They should also support the larger digital transformation initiative.
In between these layers are gaps where the vision can get lost in translation. What happens is that the executives at the top often set the vision, and then communicate to department heads, who are then saddled with figuring out the strategy and how their teams are going to execute.
Every department has its own set of resources, skills, and needs. Strategies that each department sets will be different, and the execution of that strategy will vary wildly. If those executing the strategy are getting different interpretations of the vision, results and output are going to differ from department to department. They could be executing in the wrong way or producing the wrong things. Giving orders from on high and then shutting your office door may work for some executives, but for the rest of us, it’s not a great strategy in the real world.
Gain Clarity with Your Digital Transformation Strategy
Getting to your digital transformation destination is a lot easier when a vision is clear and clearly communicated up and down the organization.
It’s up to you to set up a layer between executives and executors. In this layer, change process is managed by a group you’ve hired/enabled to carry forth your vision across all departments. To extend that travel metaphor, you need to hire a team of people to ensure that, no matter the mode of transportation that everyone arrives at the same destination around the same time.
This means hiring a program owner or manager(s) to empower each collaboration across departments. At this level, the program owner ensures that the application portfolios being developed meet the criteria and support the digital transformation strategy across all departments.
The impact made at this level is huge. This is where you can foster change management and get everyone on board and comfortable with a new way of working.
What Goes into Your Digital Transformation Strategy?
Now that we’ve talked about what to put into place so your strategy is communicated well, we can talk about what your vision should be. Once more with the travel metaphor, if folks don’t understand the goals of the trip, they’re less likely to arrive in the same place at the same time.
Digital transformation can be a scary prospect because there’s just so much to work through and tackle. How do you balance the look toward the future with tech or processes from the past? What’s the perfect balance between doubling down on what works and optimizing it versus entering an entirely new market or activating an unused channel?
Unfortunately, there’s no magical digital transformation ratio. In the Gartner report, “Digital Business Ambition: Transform or Optimize” authors LeHong and Waller cite that the most important part of the equation is realism. “Examples of traditional enterprises truly transforming their entire business model are extremely rare, while high profile over-zealous attempts less so!”
How do you climb a mountain? One step at a time. It’s just a matter of looking inward at your business, seeing what the needs are, getting the right balance, and then declaring your ambition or vision.
Part of your vision could be looking at what you currently do well and improving it. Look toward processes that could be improved, different ways of optimizing revenue streams. You could look at technologies and automation that help improve productivity (and thus reduce costs). Perhaps there are ways to improve your customer experience—these could also lead to more transformational initiatives as well—that could thus improve retention rate.
Are there new markets or industry segments you feel your company is ready to disrupt? For this part of your strategy you’ll want to mark down any net-new digital products or services that could allow you to reach those new audiences.
Or maybe your product remains the same, but you have new business models set up around that (subscription or platform-based models come to mind here).
Knowing what you want to do isn’t enough for your vision. You need to know what it affects or is affected by. Look at the technological, cultural, and any industry-specific variables that will specifically be altered by your vision.
Considering all of these aspects will help you create a well-balanced strategy that will give you a metered approach to digital transformation.
Knowing where you want to go is one thing. Telling others how to get there is another. Putting the pieces into place so that your vision is clear, accepted, and uniformly executed is crucial to any strategy, especially with an undertaking of such enormity as digital transformation. Digital transformation is endless. But the goals you set can be attainable. Once you achieve them, and your business has evolved, you’ll see that the journey starts again and you need to reset your goals and ask what’s next. And when you answer that question, make sure everyone else knows, too.