6 – Start your digital journey
In the previous five posts, I have focused on the issues associated with organisational transformation to the digital age, as well as on the key elements that will determine the extent to which your organisation will thrive in the digital age. In this post, I will focus on the steps you need to take on your digital journey to maximise your chances of success.
A digital journey, not a destination
It is worth pointing out that transformation cannot be considered an exercise or a project. That would imply that there is a completion date. In the industrial era, we talked about change programmes, which were at least in theory were supposed to have an end date.
Transformation is a real-time exercise, a state rather than an event, so to speak.
In the past, you might have dominated your market through a ‘killer service’, and your business model was predicated on exploiting that success year after year.
Today, market dominance is a transient experience. You may well enjoy the pole position, along with the associated healthy margins, for a short period. But competitors are catching up fast and in some cases redefining what the market values, making your golden goose roadkill. Thus, we must always be planning our second and subsequent ‘acts’, even when we believe our current approach looks unassailable.
But whilst transformation is the new steady-state, the process of preparing for transformation can in part be thought of as a project. The overall set-up and running of your transformation model involves the following steps:
1. Establish baseline.
2. Build the team.
3. Build the Innovation Engine (IE).
4. Run the IE.
5. Review progress.
Let’s look at each of these in turn:
To measure progress, you need to understand where you are starting from. Understanding your organisation’s strengths and weaknesses in respect of the key elements of the business is a good starting point. Details of these key elements can be found via these three posts:
You can take an informal approach (ask what other members of the executive team think) and assign a crude score (eg. poor) and use that as your baseline.
I have developed a digital readiness model that enables organisations to assess where their associated strengths and weaknesses lie. It also starts the process of engaging the staff in respect of the organisation’s intentions to start the digital age journey.
Build the team
In parallel to establishing the baseline, it is important to build the team, or more specifically the teams, that will drive the set-up steps and ongoing transformation execution. The key teams required, include:
- An oversight team to ensure the transformation machinery and processes are in place and running smoothly.
- A steering team to make the important decisions in respect of transformational next steps. Ideally this is the executive management committee, or at least a subset comprising the CEO, CFO, CIO and CHRO.
- An operations team who will be responsible for the day to day running of the transformation machinery and processes. This would comprise members of staff from across the organisation who all recognise the importance of making this journey.
There are other teams involved, but these are the backbone teams, so to speak.
Build the Innovation Engine (IE)
The IE is the primary machinery needed for powering organisations in the digital age. Imagine a ‘black box’ that has a mounted dashboard displaying the values of metrics such as:
- # ideas submitted.
- # live experiments.
- Failure velocity.
- # Innovation projects.
- $ Business value created to date.
The IE is both a process and a mechanism for managing the process of turning raw ideas into real business value. It is structured to enable the leadership to pivot in real-time should unanticipated opportunities and threats emerge.
Certain rules are put in place, such as maximum project duration, to ensure that the leadership are not fatally seduced by the ‘sunk cost fallacy’.
These ideas will be harvested without constraint though they will be filtered by market realities. Smart organisations will harness the cognitive capacity of their people to fuel the IE. Game changing ideas are no longer confined to a few people sat around the boardroom table or to the white coated scientists in your research facility. Think ‘Kaizen on steroids’.
Run the IE
Now that the set-up is complete. We can turn on the IE. Your people may require stimulation in respect of submitting ideas to the IE for consideration. One way to start the process, is to ask your staff ‘what elements of your role could be automated, thus freeing you up to do more cognitively stimulating work?’
A word of warning. Do not turn on the IE until your leadership team understands that the digital journey is less about the digitisation of your existing processes and more about preparing your organisation to thrive in the digital age. ‘Polishing the processes’ of a dying business model might enable you to disguise a lack of innovation with cost savings. But such deception is not sustainable.
Receiving and reviewing feedback on a regular basis is critical to your ongoing success.
At one extreme, annual personal performance reviews must be replaced with something closer to real-time performance adjustments.
Tracking what is happening in the market in respect of, for example, competitors and technology advances is important as you need to be able to respond quickly should the rules of the game change. You are encouraged to set up and measure a range of innovation-related metrics so that you can refine the IE, and identify if it is becoming clogged or in danger of stalling because of a dearth of incoming ideas.
People are critical to the digital journey
My experience of working with clients in respect of transformation tells me that your people are more critical than ever to your organisation’s success. They are even more critical than your clients, because ultimately clients will gravitate towards the most innovative organisations. They are more critical than the latest technologies. However, the latest technologies increasingly have the power to augment the cognitive capacities of your people.
Many workers today are wastefully expending their cognitive capacity as they fearfully contemplate being a victim of the digital revolution.
My Biz 4.0 approach gives everyone a fighting chance, if they are prepared to evolve from corporate compliant process cogs into free-range free-thinking humans.
In the next post, we will look at how you communicate your transformation intentions, such that you do not trigger pandemonium and consequently threaten your cash flow.