Leading Companies Are Ditching Digital Transformation and Choosing to Become Digital


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PHOTO:
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The age of the customer has taken businesses down a path of nonstop change in the last 10 years, driven by technology innovations that continuously raise the standard for experience. Then, in less than 90 days, the pandemic pushed us five-plus years further into the future.

It proved we need agility to respond to the changing business landscape and meet dynamic customer expectations. Digital leaders are agile in every part of the business. They have to be. To quote Jeff Bezos: “The only sustainable advantage you can have over others is agility, that’s it. Because nothing else is sustainable, everything else you create, somebody else will replicate.”  

The world is constantly evolving, and leaders are being tasked with pivoting on a dime to better serve their customers.

Consider the massive societal shifts in how we:

  • Work: 45% of the U.S. labor force works from home — and 96% of them want to retain some form of remote work.
  • Receive healthcare: More than one billion virtual visits delivered in the United States. By contrast, only 24% of U.S. healthcare providers had a virtual care capability before the pandemic.
  • Connect: Zoom’s daily participants jumped from 10 million to more than 200 million in three months.

The pandemic undoubtedly accelerated digital transformation initiatives that were already underway. But the companies that will succeed in the world ahead will be those that become adept at creating experiences and products that are fluid between analog and digital.

We’ve been encouraging our clients and teams to stop thinking in terms of “digital transformation,” which suggests it has a destination or end point, and instead aim to “be digital.” Think of it as the difference between going on a diet and living a life of active and sustained wellness. The pandemic forced everyone to go on a diet. But now we need to turn that short-term, finite effort into a full-fledged lifestyle change.

The 6 Traits of Digital Leaders

What does it mean to be a digital organization? Our work provides a unique view into digital leaders — including what makes them truly digital. We see six key traits:

  1. Customer: They put the customer at the heart of the business — and at the center of every decision they make. Because without end-customers, the business will not exist.
  2. Vision: They have a clear and common vision around what the organization should do, and why. When done right, digital is baked into every part of the business, not a discrete line item in a plan. The vision should be de designed to influence and empower decision-making across the organization.
  3. Experience: They ship products and experiences that customers love — and that are fluid between analog and digital. To do so, they have honed the ability to work in sprints:
    • Design in sprints that test new concepts or ideas in days,
    • Discover in sprints to determine the right features and experience for a product, and
    • Deliver in sprints to continuously ship products as quickly and efficiently as possible.
  4. Tech: They have established flexible, scalable, secure technologies and platforms that enable speed to value. But they don’t just adopt technology because it seems like the right thing to do. They have become good at understanding and addressing business challenges. Determining how to use technology to solve them is just the beginning.
  5. Data: They use data and insight to sense and respond to changes in consumer expectations, markets, technologies, trends and competition. From the C-Suite to product teams to sales, leaders have clean and accurate data and are using it to make all decisions within the organization.
  6. Org: They have created the right organizational conditions to support change, experimentation and iteration. This includes not only tools and automation but also investment approach, multidisciplinary [by default] team and organization structure, and change management.

These are not new or unexpected concepts. Most companies have prioritized at least some of them. But what distinguishes the truly digital organizations is their ability to orchestrate all of these elements so they work in concert.

Related Article: Digital Transformation Is an Ongoing Journey

Where to Start?

Being digital is all about responding to the customer — and fast. If the customer is not at the center of everything your organization does, none of the other elements will matter. Investments, no matter how significant, will fail to deliver on their potential.

Beyond that, you can start with any of the other five areas. For example, your organization may have a great technology platform but lack the organizational capabilities to use it to drive value and outcomes — making that a good place to start.

In West Monroe’s most recent executive poll, 52% of respondents cited “digital” as their top business opportunity in the third quarter. And many companies are investing cash from the balance sheet to become more digital. Here’s a quick look at where those investments are going:

  • 60% — Automated, iterative, data-driven management.
  • 53% — Cloud-based platforms leveraging common frameworks.
  • 49% — Integrated experiences.
  • 47% — Broad access to data and decentralized decision-making.
  • 36% — Algorithmic decision-making.
  • 33% — Real-time client feedback on products and experiences.

These are all relevant investments, but it’s also important to build solid capabilities across all of the traits listed above. The key is tackling specific needs iteratively and shifting your focus as opportunities arise, emphasizing quick wins and influencing change by delivering incremental and continuous enhancements to the way your organization works.

What might this look like? One recent client has multiple business units, each with their own resources and capabilities in areas such as brand, IT and digital product development. The company wanted to establish a common digital customer experience across brands, making that the initial focus. But it’s hard to deliver a deliberate experience without data. We began to consider how to gather and analyze data to develop customer insights that drive new experiences, developing rapid proofs of concept to test new capabilities.

Then, as the organization began to get comfortable with using data to influence experience, the focus turned to building an enterprise-wide capability around digital product management. Bit by bit, the company has moved the meter toward being digital because everyone was working with the same vision, driven by data, with the customer leading the way.

Related Article: 5 Myths About Digital Transformation

Think of Yourself as the Conductor

You can’t become a digital business by treating transformation as a project and relegating it as the responsibility of a single team or leader. Digital is a mindset, not a destination, and it must be universal and well-orchestrated throughout. In other words, digital is not just one person’s or one team’s job — it’s everyone’s. When that happens, then sustained transformational results happen.

Mazen Ghalayini is a managing director with West Monroe and a member of the executive team and board of directors. He leads the firm’s Product & Experience Lab.





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