In today’s environment, the question is no longer whether established companies need to digitally transform, but how. More often than not, building digital capabilities is not the biggest hurdle to doing so – it’s getting stakeholder buy-in and accountability and breaking down organizational siloes and process hurdles that are the real challenges. Success lies in the ability of teams to work together across organizations: within the business, with a transformation partner and within a wider partner ecosystem.
10 Success Factors for Digital Business Transformation
Digital transformation initiatives require great partnerships
Here are 10 concrete, consistent components behind every successful digital business transformation:
1. Set clear goals – it’s not just about technology
Culture is extraordinarily critical – if you take the people out of transformation, the transformation is very easy. An organization is embodied by its people, who form the culture. It’s easy to get lost in the weeds of capability choices, personal agendas, and crucially, the real responses of organizations and people who resist change. That’s why an organization must be clear on what change it wants to achieve.
Clarity of direction when making decisions is the most powerful tool a client can provide to their teams. It enables them to look beyond the work right in front of them and understand how it connects to the transformation of the business. How do you start changing cultural behaviors? How do you get buy-in from people in the organization but also within the ecosystem? Nigel Vaz, CEO of Publicis Sapient, describes transformation as a journey, not a destination. Click below to hear what he thinks is the most important thing an organization can learn to enable itself to develop cultures that constantly succeed.
2. Align teams around a shared vision
One person cannot drive transformation alone. Whether it’s the CEO or chairman of the board, it makes no difference. Aligning a core team is critical. At the end of the day, these are the leaders that the broader organization will look to for direction and guidance.
3. Have C-Level buy-in
Clear sponsorship and support can make a huge difference in getting the resources and attention the transformation program requires. When a business’ senior leadership is invested in reshaping the company, it creates incredible momentum across broader teams. Especially in the early months of the transformation, it’s critical that the first programs are successful. Senior-level support can drive the right accountability and visibility to sustain the energy around the transformation.
4. Be transparent with shared outcomes
Accountability and clarity on business outcomes is one of the most critical components of a successful transformation. Part of the reason transformations fail is because of a lack of accountability. Be clear on shared outcomes the company is focused on and on the shared behaviors that will yield those outcomes. Co-creation of vision and outcome can help the leadership team see their role and accountability within the transformation program. Leaders need to also embody the change they want to see. They are motivating their teams to do something new, something unknown. Role modelling the behaviors that will produce the outcomes creates a path for others to do the same.
5. Seize quick wins and communicate
Change is hard. Quick wins are an important way to signal progress. Initial communication is likely geared towards setting a big strategic picture, but teams will soon want to see operational progress and how their work is contributing to the overall transformation. People want to see where they fit into the change, but they also want to see how their leaders are reacting to it. It’s not just about what to communicate, but how. Authenticity is everything.
6. Move fast
Strategy is often framed as the art of knowing where to play and how to win, set in a context of a few years. But in reality, businesses enter conversations with transformation partners saying, “Don’t tell me what you can do. Show me.” Rapid prototyping enables teams to build out the most ambiguous (or ambitious) ideas to see how they translate in real life and what they enable.
7. Make thoughtful governance choices
Setting out to transform a business is much like building a start-up. The team needs to include people who balance critical expertise with a belief in the vision being created together. It’s important to be mindful of governance at the senior level and to create autonomous, small, cross-functional teams.
8. Choose partners who are a fit for the team
A partner ecosystem is composed of partners who fill capability gaps and co-create. As important as the tangible characteristics of partners are, so are the intangibles. Do partners engender trust? Are they the kind of people that everyone wants to work with on a day-to-day basis? How will they collaborate to bring all the teams on the journey?
9. Keep teams small and cross-functional
Small, multidisciplinary teams provide a way to break through operational silos and create progress faster. You can also see the power of smaller teams in prototyping and piloting efforts. Rapid response teams, for instance, bring together a small, diverse set of capability leaders to bring prototypes to life in a matter of weeks.
10. Consider new approaches to funding
One significant operational hurdle for clients is the need to fund an environment of continuous improvement. As an organization becomes more digitally sophisticated, the faster is will need to move. Programs can’t wait for annual budget cycles and likely need to move more quickly than quarterly as well. One option is a VC-funding approach where teams pitch ideas on a more frequent basis to gain funding for phases of work. Instead of funding the end outcome upfront, funding is based on meeting specific milestones. Another approach is to look at business transformation as from a portfolio perspective. Instead of making one big bet, make a series of bets across the business. This can help de-risk the overall portfolio while creating space for innovation.
It’s clear that the pace of technological change has never been higher. Established businesses are struggling to keep up with the rate of change and many are disappearing. There are real challenges beyond building digital capabilities that clients must overcome. These hurdles exist within the business, with a transformation partner and within a wider partner ecosystem. Digital business transformation is just business transformation for the digital age. It’s a holistic approach to changing the way a business thinks, organizes, operates and behaves. This is why a network of great partnerships is essential for transformation – it’s a journey, not a destination.
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