Enjoy your digital transformation journey
This article was first published in Management Impact
The goal of digitisation is transformation. It is not the destination that is important, but the flexibility it gives you to continually choose new destinations.
COVID-19 has made organisations realise once more how important digitisation is. Digital transformation makes disruptive changes manageable. This time it was an international health crisis, but next time it could just as well be a political, technological, economic or societal challenge. Organisations that, thanks to digitisation, can respond flexibly to such crises know how they can relatively easily turn them into success.
However, there is still a lot of hesitation about starting digitisation. That is mainly around the 'how' to do it. Everyone is looking for a fast and certain path to success, but there is no magic formula for that success.
Many roads to Rome
In our consultancy practice over a number of years, we have followed, advised and assisted many, very diverse organisations in their digital transformation. In doing so, we have come across different approaches, from which we have repeatedly learned lessons.
For example, we have seen a lot of the 'outside-in' method. Organisations experiment with digital transformation outside their regular business processes. They then integrate the proven successful digital solutions into the organisation. This works, but it creates tension between the digital proponents and established business managers, who feel compelled to accept changes they are barely aware of.
Another approach chosen by organisations is a 'Big Bang' transformation, where they embark on full digitisation of the entire company from the start. This means, for example, that all departments simultaneously switch to a new IT system in one fell swoop. It works in the end, but it takes a lot of time and effort: it often leads to friction between proponents of change and colleagues who do not want to deal with a long period of new and major uncertainties.
To overcome this, digitisation is now more often built up incrementally. By digitising support departments first such as IT, HR or Finance, the organisation can see that it leads to greater efficiency, better service or better scalability. This then creates support for new initiatives at other business units.
We saw a good example of the successful scaling of an incremental solution with a new player in the financial sector that differentiates itself through excellent customer service. That service relied on a human team. Human teams are excellent linearly scalable entities, but if your organisation grows exponentially, that's unfortunately not going to be enough. By digitising and automating parts of the customer service process by, for example, using chatbots, this challenger bank was able to keep up with its own growth without compromising on their own unique selling point.
The main challenge there was to find a good balance between digital and analogue. On the one hand, you want the efficiency and scalability of technology like AI. On the other hand, you want to be able to switch to physical human contact at crucial points, because that is where customers feel the added value of such customer service.
The reality is that digitisation is always a journey of discovery. Every transformation is different. Many roads lead to Rome, but with digitisation those roads are always a work in progress. Organisations start enthusiastically, but sooner or later they will encounter workers who are still busy filling holes and laying tarmac – and the tarmac that is already there is still very slippery. So the road is an adventure that runs through virgin territory. Sometimes you can follow the footsteps of those who have gone before. Sometimes you have to make your way through the wilderness.
Change is the goal
Some companies wonder if this is worth it. Think of the bears you might encounter on your way to Rome. You might just get hopelessly lost. When you arrive, you probably won't even be the first. And there is a good chance that others who follow you will soon be whistling happily to Rome on the road that has been built on your blood, sweat and tears.
Why would you do that to yourself and your organisation? Because the transformation is not about an end goal, but about the change it brings. Digital transformation is not a destination, but a state of mind. Rome itself is not that exciting; it's nice when you first get there, but after a few weeks it's just a city again. The value of the transformation is not found in one journey or one destination. It's about always wanting to be able to choose another or the next destination, constantly learning from the experiences you gain along the way.
The mere fact of initiating the transformation will make each subsequent change easier and smoother. Moreover, every journey you undertake provides clues to new destinations: new opportunities that you can seize to help your organisation. And finally: the tension of the journey is inspiring. It puts your people on edge. It provides energy and inspiration. It creates a corporate culture that attracts people with the same mindset: people who want to move forward and are willing to try new things.
What we at PA have learned from our conversations with entrepreneurs and business leaders is that fear of change is often the biggest barrier. Most of the objections raised are classic challenges within organisations: “The systems are not ready for it. The environment is not ready for it. The corporate culture is not ready for it. Senior management is not ready. It is moving too fast and there are too many conflicting interests.” But that's nothing new. If we let that stop us, nothing will ever change with the risk that as an organisation you will be left behind and the rest will catch up with you. The best way to make a success of digital transformation is to simply do it!
Think big, start small, scale fast
Over the years, PA has developed a formula for digital transformation that has proved itself in organisations of all kinds and sizes: Think Big, Start Small, Scale Fast. Bring together people who dare to dream big, give them the tools to experiment, and be prepared to move fast as they discover a route to success. Exactly what that looks like differs between organisations, but the essence is the same everywhere: if you don't start, you won't get anywhere.
Does our approach guarantee success? That depends on what you consider success. Sometimes you can't get past Cologne before you get stuck. Sometimes you simply end up in obvious destinations that others have already discovered – like Rome. And maybe, with the right enthusiastic people, you'll end up in El Dorado one day.
You can also stay safely at home and do what you've always done. The difference will be that with each subsequent disruption it will become more difficult to maintain your existing business. While the organisations embracing the transformation see a new opportunity in every change: not a crisis, but a new adventure that opens doors to new destinations. The choice is yours.