What are the opportunities and the impact of digital transformation for companies? Over the years, we learned that technology is not the difficult part, leadership is. Your digital visionneeds to be embedded in your employee’s souls. And it's easy to create useful products for your customers when you focus on user experience. Here are 5 interesting insights, from inspiring leaders, we gladly share with you.
1. Digital leadership is key, not technology
Many people seem to think that it's all about technology. But it is not. According to Jo Caudron, author of the book Digital Transformation, it is not a technological challenge. He claims technology is the easy part. Changing how people operate, however, is the difficult part. That makes Digital Transformation more of a management & people challenge. This implies that a successful Digital Transformation requires digital leadership. You'll need someone to manage this transformation, someone who draws up a vision for the future, and someone who develops a roadmap that will get you there.
The digital leader of a company understands the impact of digital on their business models. He doesn't necessarily need to know and understand all the technical details. Many influential companies have appointed a digital leader as their CDO (Chief Digital Officer). These CDOs are constantly questioning the current business models and how these models can be adjusted to tackle future digital disruption waves.
2. Company-wide employee alignment is a must
A company's digital strategy can only be effective when everyone within the company is involved, not just a small group of converted natives. Tom De Ruyck from InSites referred to a US study that found that "only 13% of the employees in the average company is passionate enough to change/get the company forward". This number has to go up!
So, how can you achieve this? A sensible way to start is by giving employees information on the company strategy and the customers. When every employee can identify with the customers, they know how to serve their needs. This will lead to better decisions on future products and services aligned with the company's strategy.
Secondly, it is essential to give employees responsibility and the freedom to make decisions (For managers: Let it go!). When self-managing teams are empowered to do what they think is suitable for the company, they are more motivated and more involved. It's also essential to have diverse teams consisting of business/technical employees, juniors/seniors, and people with different expertise.
Your company's digital strategy should be top of mind for everyone every day. Tom used Newton's First Law of Motion as a metaphor: A body in motion wants to stay in motion. A body at rest wants to remain at rest. So persist. Keep on going. And most of all, keep the company in motion!
3. The company structure will (probably) have to change
Traditional organizations are built on hierarchical structures, in which decisions have to be approved by multiple committees. This takes time. A lot of time. In a digital world that is rapidly changing, time is of the essence. Thus, for faster decision-making, the organizational structure has to be flattened. Less talking, more doing.
Take Bolero, for example, Bart Vanhaeren, former CEO of Bolero, explained how they focused on being the first to launch an Apple Watch app (icapps played a crucial role in getting the app developed in time). Bart didn't have approval yet, but he went along anyway; there was just no time to wait for a sign from above.
Jo Caudron proposes to go for small teams, pitches, spin-offs within a larger company. He mentioned Adobe3 Kickbox, a box filled with a $1.000 pre-paid credit card, instructions, innovation tools, caffeine, and sugar. Any employee can get one and do whatever they think is needed to improve the lives of their customers and move the company forward. They explore lots of potential ideas, and mini-startups form within the company.
But it is not all about money. Having a budget is nice, but Jo warns that these teams also need a license to change. Sometimes a new project cannibalizes part of the existing business, but don't let that be a reason to drop that project. On the contrary, if you don't change your own business models, someone outside of your company will do so, which may cause your company to fail. Think of some big companies like Nokia, Kodak… who were unable to get off their cash cows and innovate. Where do they stand now?
It would help if you had the guts to take risks. Don't focus too much on KPIs. Don't be afraid to fail! Failing means that you are trying, and the knowledge you gain is priceless. Not every story has/will have a happy ending. In some sectors, margins will go down, as Truvo's Marketing Manager Wim Vermeulen explained. It is better to have a shrinking company than a company that is disappearing altogether.
Or, as Andrew McAfee formulates it: "We have to protect the future from the past forces." So don't hesitate to change something, even when it endangers jobs created in the past.
4. You'll have to get out of your comfort zone
It is possible that your next business unit won't be a part of your traditional market. You need to look further than what you are comfortable with. Wim Decraene explained, exploring new markets and new partnerships and looking for opportunities outside the company's traditional main. Take Visa, for example, which collaborated with car manufacturers to allow drivers to store their payment information in their cars. This enabled car drivers to pay for something, like a pizza, with their car.
Another example is General Electric. GE entered a new market by selling predictive maintenance software for connected turbines, something they had very little expertise in. By doing so, GE made itself a structural part of the future. Also, Wim Decraene explained not to be reluctant to take advantage of the company's existing network, such as GE did by selling its predictive maintenance software to customers in its existing network.
5. You need to focus on the user experience
Ask your clients if you want to know where your company should be heading in the digital future! Your clients are the users of your products and/or services, so they should steer the innovation process and make sure you are on the right track.
In the digital age, not everything is digital. So don't focus solely on building apps and the likes. The customer journey is about more than just digital interactions. In the old days, the only way for a customer to reach out to a company was by phone during office hours. Even though digital communication makes 24/7 communication possible, 75% of all people still prefer personal interactions. Bolero, for example, organizes events, business trips, and 1-on-1 meetings to maintain a certain level of personal interaction with their clients.
At icapps, our Strategy & Design team involves users through interviews, workshops, and other sessions to define user journeys and customer needs. By applying users early on, and not just at the stage of user testing, we get instant feedback that tells us whether or not we are on the right track. This is where Google's Pretotyping-Principle comes in: "Make sure you are building the right 'it' before you build it right."
If you want to discuss how to make your company more digital, you are always welcome to stop by for a chat.