Digital technology and capabilities in the business world are ever growing, but leadership teams are still hesitant about investing in a full digital transformation. Bain & Company conducted a survey that revealed the “payoff from digital transformation can be impressively high, but the success rate is regrettably low.” Although this explains why some are still hesitant, the digital leaders of every industry the company surveyed are largely outperforming their competition. This means that it is a beneficial investment and smart move for your company if done correctly. To avoid common mistakes, here are our 7 tips for a successful digital transformation.
#1 Communicate effectively
As with any other major change or initiative in the workplace, effective communication is of crucial importance. The executives in charge of this change should have clear goals, and your employees should have a clear sense of your priorities so that everyone understands what you are doing and why. Being open and honest with your staff about progress, outcomes, and potential impacts is very important because the results will be felt by everyone. Morale will be strongest when everyone is included in celebrating your victories, and setbacks will be easier to navigate if everyone involved has a clear understanding of the problem.
#2 Listen to your employees
Innovation can often be stifled by rigid hierarchies in larger businesses because a lot of good ideas tend to come from the lower ranks of an organization. This is because the processes you are trying to change are regularly worked with by your lower level employees. So, it is important to keep an open communication with employees throughout your organization during any transformative process. They might offer valuable insight you would never see otherwise from having a more hands-on experience with the processes and problems.
#3 Involve every department
Ideally, a successful transformation will have an impact on every level of your business. In order for this to happen effectively, every department should be included and engaged in the process of digital transformation. An often overlooked department that is very valuable during times of change is HR. As we have acknowledged, workplace changes most heavily impact the staff that has to adapt to them. The HR department can make sure this is a smooth process that does not upset your most valuable assets. It is important to remember that a digital transformation of your organization also means a direct transformation for your employees.
#4 Consider long and short term goals
When planning a digital transformation, successful teams consider organizational goals, assess needs, and evaluate impact before putting a plan into action. One important step involved in this is examining how your digital goals will be carried out in the short-term, mid-term, and long-term. For organizations that are already more digitally mature, your focus should be on the long-term. However, organizations that are new to digitization should focus on the short-term instead.
#5 Focus on outcomes
It is easy to get overwhelmed and possibly lost in the middle of your transformation because it often becomes a very intense, lengthy project. Do not lose sight of your end goal, however. According to Nitin Seth, CEO of Incedo and Forbes writer, “the ideal way to start is with sharply defined key performance indicators (KPIs) which will have the most material impact on your business.” The defined KPI should become an anchor for the rest of the transformation. From there, it is crucial to identify and solve customer problems because focusing on customer outcomes will ensure that you are taking the proper steps to solve the right problems.
#6 Analyze current technological inventory
Knowing where to start or what direction to go in is difficult if you do not have an understanding of where you are currently at. Take an inventory of your technical competencies and gaps, and evaluate the digital tools your company is already utilizing. As a general rule for digital tools, less is more. Analyze how you can digitally streamline your organizational processes and functions. Being overloaded by tools or doing everything manually can equally slow down your transformation. The overall goal is to close the gaps while minimizing the effort required by your team.
#7 Utilize metrics and data
To keep your business receptive to change, it is important to dedicate resources towards collecting, analyzing, and reporting data. Continually and consistently evaluating your metrics is very important in the process of making decisions as your business digitally matures. Likewise, effectively using data allows you to understand customers on a deeper level and offer them a more personalized experience. Sometimes it is helpful to make a decision or identify a problem first and then collect specific data around this so that your efforts are more focused.
Investing in and implementing a digital transformation can be a success for your business if you follow this path. Ricoh research surveyed mid-sized businesses across Europe to identify an “almost universal agreement” with 95% of businesses believing digitization provides business advantages. With innovations on the rise, you do not want your organization to fall behind while others enjoy the benefits of digitization. However, it is important to recognize that digital businesses are very different from traditional ones. Success in the digital world requires a new mindset and a new approach that is open and receptive to change.