A lot of companies are focused on digital transformation these days. Articles (like this one!) from vendors, consultants and implementation specialists talking about digital transformation are almost ubiquitous.
Some say digital transformation must focus on the customer experience. Others say it must focus on simplifying process. Still others proclaim digital transformation must focus on strategy and outcomes.
While all of these are somewhat true, they are also all incorrect. The problem is the word “Digital” focuses our mind on digital technologies. We need to focus on “Transformation”; on the how, as opposed to the what.
What exactly is Digital Transformation?
So let’s take a step back and get a good understanding of what digital transformation is all about.
Digital transformation focuses on using digital technologies to enable businesses to transform how they interact with customers, partners and the public in general.
Digital Transformation is not simply about digitizing existing services, but about embracing technologies to create innovative, new products and services, more efficient ways to meet customer needs AND to compete more effectively in existing and (ideally) new markets.
On the flip side, by going digital, the companies can use analytics to better understand customer, partner and public behaviour, and leverage that analysis and insight to in turn become more efficient or create new products and services.
The core principle is that through this transformation, customers can save time and energy and be empowered to accomplish what they need to do, AND the company can not only save on costs, but learn from these digital interactions and invest more effectively in the areas that deliver the most value.
The transformation goes to the core of the business
The key point: The company is being transformed, not simply the services. The processes, policies, actions and workflows must change when going digital.
Think about the (hopefully) well understood example of physical retail vs. e-commerce.
- How the company’s employees interact with the customers is different.
- How the company manages physical inventory is different.
- How the company manages retail/warehouse and fulfilment space is different.
- How the company handles returns is different.
- How the company markets and promotes itself is different
- The roles, staffing levels, training and skillsets of the employees is different.
In short, an e-commerce company looks and functions very differently than a physical retail operation.
The differences extend far deeper than the IT systems and operational processes. In short, the very culture of the company is different.
You need to “Think Different”
One of the MOST famous corporate transformations was that of Apple when Steve Jobs returned in 1997. Apple was at a low point in many ways. Steve Jobs’ “Think Different” campaign was as much an effort to change the INTERNAL perception of Apple as it was the external one.
Here is Steve Jobs explaining the upcoming Think Different campaign to an internal audience. Even though he doesn’t say it explicitly, you can hear how his words apply to employees as much as they will to the public.
Right at the end, he sums it up with these words.
“It is what we’re about. It touches the soul of this company”
Zappos is a great example of an e-commerce company. From their earliest days, CEO Tony Hsieh ensured that the staff understood that it was SERVICE that would make them successful. In fact, Zappos’ first two core values are:
Deliver WOW Through Service
Embrace and Drive Change
It doesn’t get any clearer than that, particularly with the second value: Embrace and Drive Change.
Zappos employees are EMPOWERED to make the company better by enacting positive change. That mindset is instilled in each employee.
And on culture, Hsieh says the following:
“Your personal core values define who you are, and a company’s core values ultimately define the company’s character and brand. For individuals, character is destiny. For organizations, culture is destiny.”
Culture is destiny. Let that sink in for a moment or two. Companies that embark on transformation initiatives and IGNORE the cultural changes that are required — changes that impact the very way their employees see themselves, their place in the transformed company, and HOW the company will view them –are destined to fail.