Digital Transformation: Is Your Organization Ready?

Howard Tiersky, CEO, FROM, The Digital Transformation Agency
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Howard Tiersky, CEO, FROM, The Digital Transformation Agency

In industry after industry, digitally centric players are growing rapidly while many legacy brands struggle. Take retail for example. Amazon, Jet.com and eBay are booming while Macys is closing 68 stores, Sears is closing 150 stores and Sports Authority is out of business. Will 2017 be the year that your company breaks through to become truly digitally centric?

The truth is that it’s challenging to transform an enterprise to compete in a new digital world. Many won’t make it. But it’s definitely possible. WalMart is currently the second leading online retailer behind Amazon according to WWD.

So how do some “legacy” industry leaders figure out how to leverage their scale and brand to ride the digital wave and others seem to crash on the digital beach?

For more than a decade, we’ve had the opportunity to study, from the inside, dozens of companies who have been successful and many who have struggled with this transformation. From that experience we have identified ten key behaviors that the companies who succeed at digital transformation tend to get right. Usually, those companies who have not yet found success are lacking in several of these categories. How does your company stack up?

  ‚ÄčAlthough a vision can evolve over time, companies that succeed in major transformations always start with a clear picture of where they want to go   

1. Leadership Prioritization: If an organization does not feel that its leader is truly behind digital transformation, getting teams aligned will be a challenge.  Transformation often requires risk and the organization needs to know that its leaders support exploring game-changing ideas.

2. Digital Vision: Success does not happen by accident. Although a vision can evolve over time, companies that succeed in major transformations always start with a clear picture of where they want to go.

3. Iterative Development Process: Many studies have shown that iterative development processes based on agile frameworks are the methodology used by almost every single successful digital enterprise. Agile approaches get short-term releases into production so that teams can learn from customer feedback and real-world usage and then iterate the product vision based on those learnings.  

4. Flexible Platforms: You can have the best vision and business model, but if you can’t build solutions rapidly and bring them to market, you cannot compete in a fast changing world. Companies who are trying to innovate and be “digital” but who’s transactional and delivery/service capabilities are tied to inflexible legacy systems are innovating with a 300-pound anchor around their neck.

5. APIs and Ecosystem: Crowdsourcing, open innovation, and extended partner ecosystems are the foundation of most digital business models. Digital businesses that allow others to build on top of their platforms grow much faster than those that don’t. Salesforce, Amazon, Facebook, Apple and Major League Baseball all expose massive amounts of data and functionality through publicly available APIs and have large numbers of companies and individual entrepreneurs extending and adding additional value to their offerings.

6. Customer Insight and Metrics: Success comes from driving desired customer behaviors - sales, loyalty, self-service, referrals, etc. Teams that are successful at conceiving products or marketing programs that drive desired behaviors do so because they have insight into their customers: their desires, their fears and their unmet needs.

7. Culture of Innovation: The best way to have a good idea is to have a lot of ideas. Companies with a consistent track record of innovation don’t do it by having a few geniuses that have all the ideas. Everyone in your organization has a different perspective on the customer, your supply chain and your business process and everyone has different life experiences that may serve as points of inspiration for the next big idea. Companies that succeed at digital transformation engage the entire enterprise to generate and evaluate ideas, resulting in higher quality ideas as well as increased ownership across the organization.

8. Experimentation: The world is changing fast. What worked yesterday may not work tomorrow. Companies that are successful don’t get there by always being right, they do it by trying a lot of things, measuring results and seeing what works. Ideas more often fail than succeed, but that’s fine as long as you have a process for identifying the winners. In contrast many companies that struggle with innovation and transformation reward success and punish failure. Teams who are driven to avoid failure are by definition driven to avoid experimentation. No experimentation, no success. 

9. Customer Data and Personalization: We live in the age of “big data.” Many of the best opportunities in the digital space come as a result of gathering detailed data about each customer and personalizing their experience based on that data. Customers who do this have decreased cost of sales and increased loyalty.

10. Readiness to Invent New Business Models around Digital: Digital isn’t just about new ways of doing things, in most cases it up-ends existing business models and cost structures. Netflix delivers unlimited videos for $20 a month. Skype lets you talk to anyone in the world for one cent per minute or less. Companies who are overly concerned about sticking to their existing business model tend to miss the biggest opportunities they have to serve their customers in ways that compete in the digital world.

If your enterprise has most or all of these categories covered then I predict you are set up for an awesome digital 2017. If this list highlights a lot of gaps, the good news is you now have a set of priorities to focus on to get your organization aligned for future success.

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