Organisations need to have a bold vision for digital change - and to make sure that they have a culture that supports it, explains Alison Young in the first of two articles
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This article was first published in the October 2017 international edition of Accounting and Business magazine.
‘Our digital agenda’. ‘Our digital strategy’. While these phrases may be part of nearly every corporate narrative at the moment, fast forward a few years and the word ‘digital’ will become completely redundant.
This is because digital will simply be another channel. Just as digital natives already see no distinction between the different ways that they consume content – online or elsewhere, it’s all just ‘stuff’ to them – so businesses will follow. In a few years, we will all expect to consume any product or service in some kind of digital form.
But there is some way to go. With less than 40% of industries digitised, there’s a lot of change still to come in the race to the digital ‘new normal’. And a race it is, with speed being of increasing importance. Early movers in their industry peer group will be the ones to make much better profit from digital activities than the latecomers. But profit from digitisation is not the super profit economists noted as the prize of yesteryear’s early movers. Instead, this is profit simply to stay in the game, to survive. The message is clear: organisations need to get on with their digital changes, and fast.
But before rushing to start the digital transformation, organisations must consider whether this process is in reality any different from a ‘regular’ organisational transformation. There is the same need in both for a clearly articulated vision, accessible and authentic leadership, and transparent communication. No matter what type of transformation, a leader and their team need to communicate regularly the trigger for the change, and the ways in which the organisation needs to respond. Creating a crisis around the trigger, as every management textbook advises, can help to kick-start action and keep the momentum going when energy begins to flag.
Obsession with the journey
So far, so the same. But as the change effort turns its attention towards the customer, the elements that make digital transformation different begin to show through. Irrespective of the starting point of the digitisation – the product or service itself, in marketing and distribution, with operational processes or with the supply chain – there needs to be an obsession with the customer journey. This maps end-to-end the different points of interaction the organisation will have with its consumers; targeting the top customer journeys will probably unlock the most value in the shortest amount of time. But success will come from more than just digitising what happens currently; the digitised customer experience will need to be enhanced.
The user journey defines what needs to be built, and agile software development will allow new software features to be tested and launched quickly.
This is a shift from classic project management and requires a highly collaborative mindset as well as new skills, roles and ways of working. Many a leader’s eyes have rolled on first hearing about the need for a scrum master, chief experience officer or head of trust. As the appearance on the company’s payroll of new job titles accelerates, so does the separation of the digital transformation from a ‘normal’ journey of change.
Beyond the teams working directly on new digital products or process, there need to be changes in the wider culture and capabilities to support the new efforts; without them, digital new growth will wither on the vine. Digitisation needs collaboration right across the organisation and any legacy silos will have to be eradicated. In addition, the rapid release of software requires agile decision-making informed by a relentless focus on customer data. In fact, analytics will need to play a larger part in how resources are allocated at all levels.
Alongside these more tangible changes prompted by the journey to digital, there are some other less obvious – but equally important – shifts that need to take place. The organisation will need to embrace those who think a little differently and who perhaps challenge the norm. ‘We’ve always done it like that’ will become a block on iteration and innovation – two key attributes of a digital culture. Culture is key, named by CEOs as one of the biggest barriers to digital initiatives.
There are a number of activities that companies can embrace to help change the culture and ways of working (see box on page 46). But be quick: the race is on. Leaders need to create a bold vision based on where digitisation will add the biggest value to the customer.
They will need to move fast in their execution, taking steps at every turn to make sure that the organisation is equipped through its capabilities and its culture.
Alison Young is director of Leaders in Change @Leader_Insights