AVOIDING EXTINCTION
DIGITAL TRANSFORMATION EVERYWHERE
“If you do not have [digital transformation], you are out of the game. Out. It is just a matter of time. Start counting. Start counting, because you will be dead very quickly because there is no way to compete today.
- Vice President, Manufacturing
EIGHT COMMON PRACTICES
Industry pundits far and wide have been writing about these digital transformation journeys. From consulting firms to market analysts to industry bloggers, there is no shortage of perspectives and frameworks that describe the steps companies are taking as they transform.
We studied the digital transformation initiatives of over 50 leading companies across financial services, healthcare, life sciences, retail, industrial, automotive, energy, and manufacturing industries. Pouring through articles, reports, press releases, webinars, conference presentations, blog posts, social media feeds, and other publicly available material about these companies’ initiatives, we pieced together eight common practices companies are taking to navigate their digital transformation journeys. We were intrigued to find such consistency across companies in how they navigate their journeys. However, our study of these companies also found that these practices are by no means sequential. There were no clearly defined beginning or end points. There were as many flavors of these journeys as the number of companies studied. Companies move through these practices in a continuous, iterative, dynamic, and non-linear manner. The practices applied to individual transformation projects, as they did to overall company transformation initiatives. What the publicly available material did not tell us was how these companies were actually implementing these eight practices. What goes on behind the scenes? Who drives these journeys? What skills are required? What determines success? What challenges are faced? With these questions in mind, we embarked on a set of in-depth interviews with digital transformation leaders across 11 companies. Through these interviews, we sought to understand how much of these companies’ processes aligned with the eight practices.
Companies understand that they are being disrupted and that digital transformation is not optional. As they embark on their own journeys, they look around and see big disruptors like Uber and Airbnb and realize they must move quickly past reactionary initiatives to become industry disruptors themselves. Disrupt or be disrupted. Find innovative ways to change the way business is done, otherwise, other industry players will eventually leave you scrambling to adapt. Anticipate market needs. Be proactive in staying at the bleeding-edge of technology and immerse in the ecosystem to systematically think through and identify ways to change the status quo, and bring new ideas to market quickly. Work with startups. Successful startups inherently offer Embracing disruption is one thing, but resetting the organization to act as a disruptor is a different thing altogether. Companies are at various stages of getting the participation and buy-in of the entire organization. A clear vision must be developed and perpetually echoed throughout the company to inspire change, while publicly communicating this message develops a layer of external responsibility. Empower the organization to act Declare the vision and communicate roadmaps. Senior executives should publicly broadcast the commitment to innovation and digital transformation of their business. Internal messaging will help guide employees’ mindsets and external messaging will keep the company accountable. Get company and stakeholder aligned. Transformation must occur in alignment with the varying needs that exist throughout the company to ensure that all parties are invested in and benefit from the process. something new and different and are not tied to the same bureaucratic hurdles. Oftentimes, their ideas are so novel that even the regulatory environment may not have caught up with them. By working with them, you’ll be better able to tap into and experiment with different ideas faster.
CREATIVE CHAOS
“Innovation gets short shrift at many companies and ends up being ostensibly part of everyone’s job, which means it’s no one’s job.”
— Head of Social Media, Automotive
A knee-jerk reaction to a competitor’s press release, a portfolio rationalization process, a divestiture, a legacy environment upgrade, or a brand new competitor vying for business with existing clients – these are all ways in which companies first start their digital transformation. Ideas come from individuals, just as they are pushed forward from marketing teams who are constantly “seeing the writing on the wall” at external events.Teams are loosely formed in the early days, pulling individuals to partake in a digital initiative on top of their day jobs. Despite this lack of structure at the outset, different starting points, and loosely formed teams, respondents collectively conveyed five factors that unfold over time and help companies organize for successful continuous digital transformation journeys. Their candid comments provide helpful guidance on issues ranging from challenges faced, how companies are continually working to overcome them, and how teams and organizations set up for success in continuous transformation.
Companies understand that they are being disrupted and that digital transformation is not optional. As they embark on their own journeys, they look around and see big disruptors like Uber and Airbnb and realize they must move quickly past reactionary initiatives to become industry disruptors themselves. Disrupt or be disrupted. Find innovative ways to change the way business is done, otherwise, other industry players will eventually leave you scrambling to adapt. Anticipate market needs. Be proactive in staying at the bleeding-edge of technology and immerse in the ecosystem to systematically think through and identify ways to change the status quo, and bring new ideas to market quickly. Work with startups. Successful startups inherently offer Embracing disruption is one thing, but resetting the organization to act as a disruptor is a different thing altogether. Companies are at various stages of getting the participation and buy-in of the entire organization. A clear vision must be developed and perpetually echoed throughout the company to inspire change, while publicly communicating this message develops a layer of external responsibility. Empower the organization to act Declare the vision and communicate roadmaps. Senior executives should publicly broadcast the commitment to innovation and digital transformation of their business. Internal messaging will help guide employees’ mindsets and external messaging will keep the company accountable. Get company and stakeholder aligned. Transformation must occur in alignment with the varying needs that exist throughout the company to ensure that all parties are invested in and benefit from the process. something new and different and are not tied to the same bureaucratic hurdles. Oftentimes, their ideas are so novel that even the regulatory environment may not have caught up with them. By working with them, you’ll be better able to tap into and experiment with different ideas faster.
EMBRACE DISRUPTION
Companies understand that they are being disrupted and that digital transformation is not optional. As they embark on their own journeys, they look around and see big disruptors like Uber and Airbnb and realize they must move quickly past reactionary initiatives to become industry disruptors themselves.
“Companies are investing in startups and trying to figure out that they’ve got to try and disrupt themselves from within. They’ve got to try to partner with companies and bring them in to help disrupt faster and go into digital faster.”
— CIO, Financial Services
DISRUPT OR BE DISRUPTED.
Find innovative ways to change the way business is done, otherwise, other industry players will eventually leave you scrambling to adapt.
ANTICIPATE MARKET NEEDS.
Be proactive in staying at the bleeding-edge of technology and immerse in the ecosystem to systematically think through and identify ways to change the status quo, and bring new ideas to market quickly.
WORK WITH STARTUPS.
Successful startups inherently offer something new and different and are not tied to the same bureaucratic hurdles. Oftentimes, their ideas are so novel that even the regulatory environment may not have caught up with them. By working with them, you’ll be better able to tap into and experiment with different ideas faster.
EMPOWER THE ORGANIZATION TO ACT
Embracing disruption is one thing, but resetting the organization to act as a disruptor is a different thing altogether. Companies are at various stages of getting the participation and buy-in of the entire organization. A clear vision must be developed and perpetually echoed throughout the company to inspire change, while publicly communicating this message develops a layer of external responsibility.
“People tend to operate in a vacuum on a day to day basis. Executives who run the business want to move fast. They want everything yesterday and that slows everything down. ”
— SVP, Financial Services
BE VOCAL ABOUT TRANSFORMATION.
Persistent top-down communication and enablement are necessary to get employees on board and inspired to act.
“One of the things that’s really important is to get out in the organization and talk about it and communicate so that people understand why it’s happening, what’s happening, when it’ll happen, and have the tools to make the transition.”
— CIO, Transportation
DECLARE THE VISION AND COMMUNICATE ROADMAPS.
Senior executives should publicly broadcast the commitment to innovation and digital transformation of their business. Internal messaging will help guide employees’ mindsets and external messaging will keep the company accountable.
GET COMPANY AND STAKEHOLDER ALIGNED.
Transformation must occur in alignment with the varying needs that exist throughout the company to ensure that all parties are invested in and benefit from the process.
ESTABLISH A DEDICATED TEAM
Having a separate project, team, or function that is granted flexibility to fail and the freedom to take risks fosters innovation. It is the learning that comes from failing that propels companies to breakthroughs and eventual success.
FIND THE ENTREPRENEURS.
Recruit and retain employees who aren’t afraid to ask questions, take risks, challenge the status, and do things differently. Add them into teams to act as change agents and to provoke new thinking.
EXPLORE AND IDEATE BROADLY
“Have processes that get ideas from customers– a community pushing ideas on a daily basis for better products, better features, better process.”
— CIO, Financial Services
EXPERIMENT AND INNOVATE CONTINUOUSLY
“Act like a startup and don’t put financial controls in. The emphasis is on learning, not on margin. The emphasis is on how many prototypes or trials did you get into the marketplace, not what was your margin or your ROI.”
— Head of Innovation, Energy & Utilities
TWO FOUNDATIONAL PILLARS
“It’s imperative to have a leader in place who’s not satisfied with the status quo. Obviously, they need to be able to run the business day-to-day but they need to be looking out one, three, five years to see exactly what’s driving them, what’s
driving their industry, what’s driving the world around them.”
— Head of Social Media, Automotive
NAVIGATING YOUR DIGITAL TRANSFORMATION JOURNEY
"[Digital transformation] needs to be part of a company’s way of doing business going forward. It’s not something that you can take on for three years and then set aside and then say whew, we’re done innovating now. We did it."
— Head of Social Media, Automotive