While most leaders have read about the benefits of digital business transformation and the rationale behind it, many firms haven’t gone through the process of fully undertaking it. Some are making ad-hoc digital changes, but far more are not strategically transforming their business using digital. The question “why transform?” is the starting point. We do everything for a reason, and digital business transformation is no exception. Most managers and leaders already need to provide very good justification for small change, let alone transformation. But just as most people know the reasons why they should eat healthy and exercise, many leaders know why they need to transform, but, often because they don’t know how, take little if any action.
It’s easy to find reasons for not exercising, and similarly, many leaders can find reasons for postponing digital business transformation. Sadly, some people who keep postponing the healthy diet and exercise leave it too late, and they suffer an early death, which might have been avoided. Well exactly the same can happen to companies that postpone the need to transform.
A study by the Global Centre for Digital Business Transformation found that 69% of respondents saw the need to adapt their business models to respond to the changing digital environment. But, despite this awareness, only 55% of them claimed that digital disruption was a board level concern, and only 25% had active plans to tackle the disruption head on.
What to Transform
The difference between the ‘how’ and the ‘what’ of transformation is the difference between ‘Doing things right’ and ‘Doing the right things’. When it comes to the question of what to transform, it’s important to avoid a blinkered view. For example, if you read the online content of many digital agencies, previously known as advertising agencies, it’s easy to see that their view of digital transformation often relates only to marketing. To be fair, that’s their world, but suggesting that digital is only about marketing is a naive and narrow-minded view of digital business transformation.
It’s important to recognise that digital business transformation can come in many guises and every organisation will have its own unique set up needs and priorities. Regardless of what they are, you would be wise to adopt a framework such as THRIVE that can help you decide what to transform. One that both IT and business teams can become familiar with. This, in turn, will introduce consistency versus chaos into the organisation, when exploring what to transform.
By agreeing on how your organisation will decide what to transform, everyone will be singing from the same song sheet and become familiar with the process. This doesn’t restrict innovation, and often it opens the minds of many people to possibilities they would otherwise not have considered.
Making the decision to adopt a tool to help decide what to transform will force people away from knee-jerk reactions, technology trends and sales-hungry account managers who are dedicated to selling you their products and services. The last thing any organisation needs is to be influenced into making decisions that will give rise to siloed initiatives that are not aligned with the overall transformation strategy, priorities and roadmap. What we transform, will depend on our strategic response to the market and the situation inside the company.
There have been a range of transformation tools created by different organisations in recent years. Some are quite comprehensive, others are focused on certain components of digital business transformation, and others are tightly guarded secrets of consulting firms.
Some of the other tools that have been used in recent years include the Digital Capability Framework and the Business Transformation Management Methodology, which were both developed by SAP. There’s the Digitisation Piano from the Global Centre for Digital Business Transformation, and the Digital Organisational Design Framework, which was developed by MIT and Capgemini Consulting. It’s good to be aware of these tools, but it’s also important to use just one framework that your company can reference during transformation. THRIVE has set out to cover all bases and be simple enough for everyone to understand.
How to Transform
The THRIVE framework presents principles that explain the why, what and how of transformation.
For example, Holistic, is key to learning how to address many of the aspects of transformation. Then Response focuses on how to respond to the market and to the situation inside the company. When considering the why, what and how questions of transformation, the how is often the most difficult to address successfully. In fact, many of the transformation failures that litter organisations can be put down to flawed execution. Leaders and managers knew what they had to transform and why, but they lacked knowledge and experience of how to transform successfully.
Successfully is a key word, because while a specific transformation initiative might eventually get completed, taking twice the time and twice the budget with multiple changes in leaders and managers is not an example of success.
Questions such as:
- How do you transform culture?
- How do you decide what to transform?
- How do you manage transformation?
- How do you establish a roadmap?
- How do you know what capabilities need maturing?