Digital Journey: Don’t get left behind
Most digital journeys start with the recognition of a need or of a problem: your market is evolving and new players are emerging; these competitors are delivering better services faster and you can’t keep up. Your initial attempts to respond have become lost in a mire of conflicting stakeholder requirements and change management bureaucracy. If only you too could operate like a VC-funded start-up! From first-hand experience, this is the start of your business becoming a ‘digital native’.
Starting a digital transformation is hard: this is a large programme of work that touches many facets of how a company is organised and operated, not just IT. It is a change initiative that involves serious cultural change; something that’s easy to write but obnoxiously difficult to do. You must have robust executive sponsorship and a well-communicated set of objectives in order to succeed.
A customer-centric approach: establish a design and refinement process that puts customer feedback first. Use performance metrics like LTV instead of ATV to incentivise teams. Use tools like intercom.io and techniques like blue/green testing to get closer to your users. This applies to internal user communities and business partners as well as consumers!
Operational efficiency: transform business units through automation, reducing costs and optimised efficiency. Specifically: focus on being able to deliver change quickly, without compromising on control. Use DevOps and agile techniques to help.
Data-driven: derive insights from implementing rich data collection and analytics. These will help understand customers and prioritise spend. Hire data scientists and data engineers.
Mindset Over Skillsets
Once you’ve established your agenda, you need the right team to help you see it through. In my experience, it’s crucial that the early joiners have hands-on experience under their belt, or else the adoption will be slow and the journey a costly one. The ‘can-do’/ ‘ready-to-go’ mindset often dwarfs even the most skilled person in an organisation that’s planning to make the shift from the traditional operating model to its agile counterpart.
A team with an open mind that’s comfortable with – and proactive about – an ever-evolving work dynamic will be your bedrock of challenging established practices and the ones heralded as new and exciting. This is the mind-set that will help push the fresh agenda to achieve the goals of your digital makeover.
Essentially, most skills can be taught and nurtured. The digital mindset is harder to cultivate: you can’t just buy this off-the-shelf.
The lifecycle is the most important part of the journey towards becoming digital: the adoption of frameworks and practises that are common to start-ups and modern tech companies.
Language such as “DevOps”, “Agile”, “As a Service”, “Micro-services”, “Product Engineering teams” need to become the norm. With it comes the cultural change that strips out the rules of the old and adopts a more value-driven culture.
This is a huge cultural shift and larger organisations tend to struggle with the new ways of working, the tooling, the language used, and more importantly the ethos by which the team is motivated. Here, communication is really important so that other parts of the business have an opportunity to learn to trust these new behaviours. Nurturing and developing trust is crucial to the success of a digital transformation.
Cultivate Small; Grow Big
The journey needs to start small. In my experience, these skills aren’t leveraged through digital agencies or outsourced to suppliers promising huge “Value-adds” or DevOps milestones at low cost. This is a group of individuals who have a vested interest in understanding the existing business (the people and what makes them tick!), the customers (who we serve and want to do better for), the legacy (which is often holding the business back) and wanting to improve the future outcomes (by working together). Critically: the team driving the digital change need to be seen to be delivering frequent incremental improvements, even when they’re really trying to incubate larger and more explosive changes.
Case in point
GE is a good example of a global industrial heavyweight successfully undergoing a significant digital transformation to gain a competitive edge in the modern Energy sector. The digital shift was powered by adoption of Cloud technology, the Internet of Things (IoT), AI, predictive algorithms and machine learning capabilities. In the new competitive landscape, industrial companies are entering a period of explosive value creation fuelled by the rapid spread of digital innovation powering productivity and growth.
Like most companies, GE became aware of the falling cost of IT and how these newly affordable technologies could be applied to the evolving productivity needs across the industry. This paved the way to a new era where big data enabled an extensive analytical review of assets, operations, demand and supply. An automation of assets and process created a stay inflow of data powering predictive algorithms and machine learning technologies as well as the rise of the Industrial Internet of Things.
This has led the transformation, moving GE to a holistic view of operations recognising it the as much more than a technology trend but rather the backbone for material value creation and sustained competitive advantage.
GE’s digital journey is defined by moving away from focusing strongly on hardware service contracts towards investing in new capabilities and business models.
This significant shift can be distilled to the four strategic pillars:
Focus on leveraging digital industrial capabilities to drive internal productivity
Take the internal know-how across technologies, workflows, and productivity techniques and make them available to our customers.
Make company data and analytics operating system available to everyone for co-creation as part of an open-innovation approach
Invest in proprietary technology designed to accommodate the complexities of your data
To Sum Up
The digital journey is exciting and deeply scary in equal measure, for any organisation. The right approach means changing the pace of decision making, materially improving customer engagement and adapting your portfolio of products. Setting clear objectives with deadlines is critical, and having an executive sponsor that completely supports you is more important than the outcome.