4 keys to success in Digital Transformation

According to respondents to a recent McKinsey survey, only 37% of Digital Transformation efforts are successful. The number may change from study to study, but the sentiment is common: most Digital Transformation projects run out of steam. Even if you succeed, companies can revert to their old ways over time, giving up the gains and failing to get a return.

Digital Transformation is unavoidable. How can you claim a spot among the few that succeed at it?

1 Set up for success

A deliberate setup phase is crucial to the success of any large program. Digital Transformation is possibly the largest program you’ll ever embark on. It will significantly disrupt, for the better, every aspect of your organisation.

Clearly communicate your objective

Everyone in the organisation must know why you’re transforming, and what the outcomes of the program will be. Clarity and alignment are essential to setting off on the right path. It is particularly important to communicate the non-technological aspirations, making a clear distinction between Digital Transformation and past IT-related projects.

Prioritise ruthlessly

The transformation of your entire organisation can quickly get out of control. Defining clear priorities helps focus minds towards a small set of high-impact outcomes to be reached first, building momentum and setting strong foundations for later phases.

Invest in Expertise

Digital Transformation is much more likely to succeed when people with Digital expertise build the business case and lead from the off. In the aforementioned study, only a few percent of successful digital Transformation efforts had been designed by program management offices or traditional business functions. Trust your Digital leaders or go out and get a heavyweight. This is an investment that is sure to pay off.

2 Prototype and pilot

Digital Transformation, at its core, is about turning your company into an Agile, Networked organisation. One that learns quickly and wins by constantly adapting. Your Digital Transformation project must be organised like this, and prototypes and pilots will be its main tools.

Prototyping for communication

A clear schedule of prototypes will serve a great communication and feedback tool, allowing everyone in the business to see progress, share on the learnings and take part. The timeline for implementation must be widely communicated. People must remain engaged as prototypes mature and are moved to pilot phase.

Piloting for skills

Nothing should be adopted without going through a pilot. Pilots are excellent ways to quickly iterate a functional process or system into an excellent one – one that fully accounts for your business and your people’s needs.

Pilots are also crucial to identifying skills gaps, allowing you to select whether to hire those skills, train your people, or mix both approaches. As such, a well-designed pilot will include a mechanism for identifying and acquiring skills as a core element.

3 Implement and embrace

Successful pilots will scale into your new way of working. This is the most delicate part of a Digital Transformation. In particular, 2 risks that must be managed:

Are we delivering the outcome?

KPIs are essential as new processes and systems are implemented. At this point in your Transformation journey, you may be tempted to define success as how many people are using the new process? However, the only marker of success must be whether your business KPIs are improving. Sharp focus on business success at this time is essential, as is a mechanism to continuously improve the scaled process using business KPIs and user feedback.

Are we embedding change and creating mastery?

Change is always resisted. New processes and tools will not deliver benefit unless people embrace them, learn them and constantly improve them.

Make sure you provide ample opportunities for your people to master new processes and tools as soon as possible and provide easy mechanisms for escalation and feedback so that any improvements are identified and implemented quickly. As well as introducing new features if required, this must include identifying superfluous functionality that nobody needs. Bear in mind that, apparently, 64% of software features are rarely or never used. I bet a similar statement can be made about process steps and not needed.

4 Sustain

While your Digital Transformation program is in full swing, changes should happen always towards its goals. However, once you reach a certain level of maturity, the program must end. It is at this point that many businesses start receding, slowly moving back to the old ways of doing things, regressing. De-evolution is a real risk.

Embed your goals and KPIs

Make sure you embed the Digital Transformation goals and KPIs firmly into your core business processes, incentivising continuous improvement and ongoing disruption.

Further, you should ensure that meaningful change has been introduced at the operational level, and that there are mechanisms to ensure this change is maintained.

Keep the improvement flywheel turning

Finally, a hallmark of networked organisations is the delegation of responsibility to all parts of the business. This includes the responsibility to continue the purposeful and constant refinement of processes and tools at the user level. When everyone contributes a small improvement, the entire enterprise improves greatly.

Bonus: Key principles

At all stages of your Digital Transformation journey, these 3 principles will improve your chances of success:

Demand change: no sacred cows

Leaders must be the first to adopt new ways of working and do so visibly. From the CEO down, the board must be enthusiastic about Agility. When the top people in the business are reluctant to change, how can they ask this from anyone else? Be aware of blind spots, or functions that claim special status or the need to wait for some propitious moment in the planning cycle to switch over. At best, this reluctance shows lack of awareness and can be managed through skills development and support. At worst, it is indicative of a toxic corporate culture that needs immediate attention – independently of your attempts to digitise.

Find and develop appropriate skills at all levels

Skills are the most important factor to your success. No amount of technology will make a difference unless you enable people to work in new ways. With the networked model replacing command-and-control, your people must be empowered to make decisions very differently, and that power starts with skills: one can only operate autonomously if they have the knowledge, skills and tools to do so.

Start by honestly reviewing your own skills and investing in your own personal development, then establish a culture where professional development is encouraged and recognised. Make Mastery one of your core values.

Role model Agile leadership

Be willing to pivot, to change, to adapt, to fail fast and move on. And incentivise everyone to do that same.

I started this article asking you to clearly define and communicate your objective, and to relentlessly focus on KPIs. How does this fit with Agile? Easy: your Objective and KPIs are your definition of what are doing. They won’t change. But how do you go about it? That can change as quickly as you learn. Prototypes will be flawed, or they may perfectly reflect a flawed underlying business process. Pilots may show lack of product-market fit. New technology may become available, making some of your current choices obsolete.

Agile leadership is about changing direction without necessarily changing destination. About prioritising new knowledge, data and insight over yesterday’s plans. About making small decisions that you are happy changing. And about empowering people to choose the best course. This is what is truly different about Digital Transformation. Empower your organisation by role-modelling Agile leadership. The rest is kind of easy.