In today’s world, an organization’s digital transformation can be make or break.
The companies that have a successful digital transformation will flourish in their market and those that don’t will die.
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Driving organizations’ digital transformation
Digital technologies are turning industry after industry upside down. Companies are revamping their processes, infrastructure, and business models to keep up with and stay ahead of the digital technology curve.
In a new McKinsey Global Survey on digital transformations, more than 80% of respondents said their organizations have undertaken such efforts in the past five years.
It’s no wonder. Business leaders know that successful organizations’ digital transformations will ensure those companies are leaders of the pack.
However, only a small proportion of these transformation efforts succeed. This reflects the complexity organizations face in becoming digitally mature. Only 16% of respondents say their organizations’ digital transformations have improved performance and equipped them to sustain changes in the long term.
An additional 7% say that performance improved but that those improvements were not sustained. These are woefully poor numbers.
So, how can organizations improve their chances of success at digital transformation? The following elements will help.
1. Dynamic leadership is a must for digital transformation
Nearly 70% of all respondents said their organizations’ top teams changed during the transformation — most commonly when new leaders familiar with digital technologies joined management.
It cannot be said enough that having the right leaders is central to digital transformation. We have long known that weak leadership is a contributing factor to the failure of most change initiatives. And with digital transformation, the stakes are even higher.
What’s important is to have leaders with vision and the knowledge to implement and champion digital change.
Secondly, there must be a clear change story or narrative to help persuade the rest of the organization of the importance of transformation. In fact, this was the standout criterion for respondents describing digital transformations that had been successful.
It’s the responsibility of business leaders to determine the change narrative and be fully involved in its communication throughout the organization, to visibly lead change from the front.
2. Capable people must be in place to establish a future-proof workforce
This translates to having the right people in the roles of integrators and technology-innovation managers. These key people will be well-versed in helping the workforce to transition into a digital workplace from a traditional workplace.
This is an important catalyst for an organization to have successful digital transformation.
Another aspect of this is to develop the required talents and skills within the workforce. This involves identifying skills gaps, providing training, and potentially hiring new talent.
If everyone is properly equipped, digital transformation becomes easier and is more likely to be ingrained in company culture.
An environment in which employees can take risks and embrace digital change is necessary. Organizations must encourage employees to work in new ways.
3. Self-serve digital technology
The McKinsey data shows self-serve digital technology as an extremely important component in organizations’ digital transformation success. Roughly a quarter (24%) of respondents listed this as a key factor.
The point of technology in the workplace is to enhance productivity and customer care. When digital users can independently self-serve via smart tools, focused on the user experience and successful digital adoption, efficiency and morale improves.
This illustrates the popularity of Digital Adoption Solutions (DAS), highlighted recently by Gartner as the key to increasing sales productivity.
2 organizations’ digital transformation success stories
DBS is an Asian-based bank that has successfully transitioned into the digital age. The new COO Paul Cobban explained that digital transformation was needed in order for the bank to live its mantra of being Respectful, Easy to deal with, and Dependable.
“People’s lives don’t revolve around banking, after all. If you’re making a major purchase like buying a refrigerator, the smaller and faster the banking piece, the better. To make banking joyful, make the banking part invisible.”
The iconic toy maker realized their advertising had been targeting children, as opposed to the parents who actually buy the toys.
Harnessing the power of Big Data, Hasbro refocused their target audience and its profits have skyrocketed. Their sales have hit 5 billion for the first time in their 93-year history.
The three levels of digital transformation
An organization’s digital transformation can be perceived on 3 levels. The external level is where the external interaction happens between the customers and the company.
The internal level is the interactions between the various teams and departments of the company. Finally, the holistic level describes when digital transformation has successfully reached an organization in every facet of its daily operations.
Organizations’ digital transformations must be dynamic, complete and all-encompassing.
All levels of the company must be on board with the transformation or it will fail. Companies should learn what they can from the McKinsey data and other organizations’ success stories.
If companies can do this, their digital transformations stand a better chance of long-lasting success.