In part 1 we talked about how digital transformation is about a complete operating model change for a company. We ran through how the change is focused on building a business which can succeed in today’s digital age. This is not a small ask, particularly for long standing businesses who may be required to change things which have (and could still be) making them successful. So where to start and how to know what should change? Here’s one approach which could be used.
Step 1 – Break down Digital Transformation into its elements
The first step it is to define all the core elements of digital transformation which are relevant to you. By defining the elements you are identifying the scope of digital transformation for your business. There are models which exist which you can use or borrow from. Below are the elements we often use with clients which might be helpful (but please consider what resonates with you – these are not right for everyone may want to add to or change these e.g. consider Security, Analytics etc):
- Vision and Leadership - A clear strategy and the right leadership to drive success in today’s digital age.
- Products and Services - Rapid innovation and evolution of products and services which meet and anticipate market and business needs.
- Customer Experience - The customer front and centre in how the organisation engages, designs and delivers.
- Delivery and Operations - Agile, responsive and quick organisation in how it operates and delivers products and services.
- Organisation, Culture and Talent - The right skills, structure and culture to drive future success.
- Digital Workplace - Physical and virtual workplace providing the right environment and tools for people and teams to operate at their full potential.
- Technology Plumbing – Clear, flexible, secure and stable end-to-end digital supply chains which make use of mature use of data and analytics.
Step 2 – Define your vision
The second step is to define the vision for what you want to achieve. You could define the vision before identifying the elements, as that way you are not constraining your thinking on what you wish to achieve. However, we do find that in most cases agreeing draft elements first is more useful as it gets everyone thinking in terms of the full breadth of what a digital transformation can mean. Without the elements having been drafted many executives tend to only think in terms of their areas of the business.
Having a clear vision sounds obvious yet very often organisations struggle with this. There are too many examples of poorly defined visions which simply state a desire to change or compete, which tells you nothing. For example, one media organisation had the vision of: “To be a successful digital organisation”. There was a lack of agreement on what a digital organisation was – they simply wanted to be one and had kicked off their digital transformation programme. Maybe there was great clarity behind the vision but it certainly wasn’t being shared within the company and it was unclear how this aligned with the wider business strategy.
Step 3 – Identify what your vision means for each element
With the vision agreed, you can then look at each transformation element defined in step 1 and detail what this means for that element. We find talking in terms of maturity levels helps - how mature do you want to be in this element (you can call them capabilities if that is preferable)? Of course, you need to define what the maturity levels are for each element if you take that approach.
When organisations do look at each element what is common is that they start to realise which ones are more important than others in the next few years. They also start to realise the interdependencies.
Being clear up front on why you want to transform and what the end goal is are key. Breaking this down into constituent parts then helps to bring this to life, allowing people to understand the vision at a lower level. That way you articulate the holistic need, but also get the granular clarity for what this means.