The past months have seen all types of businesses pivot to survive. Whether a digital offering was in the plans or not, it became the top of most businesses’ agendas. Worryingly though, between 60 – 80% of Digital & Data Transformation programmes fail and in the current climate, there’s no room for error.
The reality is that failure is often built-in at inception. It happens all too often where businesses think that a new technology platform will change a customer’s behaviour, or a new data reporting suite will improve commercial performance. Single acts will not transform a business.
The combination is unique but straightforward
The formula of a successful transformation requires us to look at the ecosystem and change individual elements with the whole in mind. Think molecular formulas and chemical reactions – they rely on all of the constituent parts in the right balance to have the outcome you expect and need. An incomplete or unbalanced formula either results in a disappointing fizzle or an uncontrollable explosion. The toxic waste of failed programmes is evident across organisations who both need and fear transformation.
Business transformation is made up of a consistent set of elements. The source material from which new futures are forged consist of technology, customer, culture and team, data, strategy and brand.
The combination of those elements creates a reaction that leads to transformational change.
Why every formula is unique
Most models for transformation present a one size fits all strategy for getting transformation ‘right. The truth is that there is no one right way. Each organisation has a unique formula based on their context, their advantage and their ambition; trying to copy another organisation’s formula results in a weak echo that imitates rather than intimidates competition.
Look at HMV, its first attempts at moving to digital were a direct response to Amazon. It ended up delivering a weak e-commerce proposition that continued to compete on price with the worlds largest discounter. Fast forward to 2020 and HMV online is working to its own formula – aligned to its purpose, its customers and exploiting what is unique about its culture and proposition.
When an organisation applies the wrong formula, the outcome is all too often a legacy of technical department and cultural apathy. General Electric (GE) invested to pivot into a digital business without anchoring in the assets and strengths the business already had. It cost GE billions of dollars and the CEO his job.
As the cost of failure rises exponentially throughout a programme, the decisions to not progress are perhaps the most important an organisaton can make.
When an organisation finds the right formula, the outcome is an energised organisation and a clear direction that leads to new growth. Lego is a great example of an organisation previously struggling with an ageing product. However, it focused in on its strengths in brand, customer and culture to pivot into a new digital and data-driven experience. Not an online toy shop but a reimagined business.
Setting the baseline
Any transformation is a journey with a destination in mind and much has already been written about the importance of having a clear ambition. Transformation objectives underpinned by a purpose and vision can ignite the power of the organisation behind you.
While the destination is important, you can’t get anywhere without understanding your starting position. Organisations often cripple transformations before they begin by overestimating the baseline and underestimating the journey. This leads to an uphill struggle from the beginning where the delivery team has to first uncover where the baseline is, then establish the truth before progressing. When programmes take longer and cost more than expected, it’s almost always because the baseline was not-as-advertised.
These issues arise in every element of the formula. From the degree to which the organisation is primed for change, through to the knowledge and documentation that sits around legacy tech.
There is no right or wrong place to start, but to build the right transformation requires an honest appraisal of the start line. In 2010, the UK Government set the agenda for digital transformation of public services, and it was developed across the Ministry of Justice, the Department for Education and NHS, providing a valuable foundation that all sectors can learn from.
Finding the right formula
Strategy is not followed by implementation, but discovery. It’s this phase that establishes the baseline both internally and externally through analysis and research. Not all discoveries make it through to delivery, but as the cost of failure rises exponentially throughout a programme, the decisions to not progress are perhaps the most important an organisation can make.
Once established, the combination of the strategy and the baseline tell you the formula for your transformation. Before getting into costs and resources, start by thinking about ratios.
For a heritage utilities company the formula might be weighted to brand, culture and customer, with technology enabling rather than driving the agenda. But with FinTech there might be a disproportionate focus on technology and data, balanced out by enough focus in other areas to support a solution led proposition.
All programmes are about decisions and compromises. By setting the right ratios up front it’s easier to keep control at a strategic level, and course correct if too much of a finite resource is going to one element or another.
Transformation cannot happen in a vacuum
The final key to success is a shared endeavour – it takes an entire village to raise a child and an entire organisation to transform successfully. While there is nothing like a burning platform to focus attention, the flaming beacon of future growth works just as well. The point is that everyone in the organisation needs to feel invested, excited and accountable for the change – a long time before it touches them.
Every transformation is unique and it’s that point of difference of the organisation that the transformation needs to exploit and grow. Don’t follow someone else’s path, or be intimidated into following the latest trend or technology. Be clear on your objective. Ensure you have all the right elements to create the perfect formula that transforms your business in a controlled way – leaving no toxic waste.