Digital Transformation

Navigating Digital Transformation

Are you a renovator or an innovator?

Digital Transformation – I think and hope we are beyond the “why” stage and moving into the “what” stage. What does a digitally transformed company look like? That’s a question with a thousand answers. Having both a corporate background (CDO Thomas Cook, NED Provident Financial plc) and a startup background (as entrepreneur and investor) I get a multidimensional view of the landscape, here’s how it looks. . .

Firstly I think you have to ask yourself – are we in business as a Renovator or an Innovator? A renovator in the sense of a continual quest to make things better, or an innovator that is doing something completely new and radical. Both can have digital root structures but the cultures are entirely different.

For an established business (especially a listed business) transformation should not mean any shocks – good or bad – it’s business as usual (BAU) but moving to digital business as usual (DBAU). Culturally this is normally a renovation approach and – the most critical element from a transformation perspective is to get the enthusiastic buy in from senior middle managers who are often resistant to change (especially if they have an eye on bonuses and pensions). This can be done from a top down / bottom up approach. One tactic I saw work well was having a 30,000 strong workforce formally asked to help identify and document web site bugs – the whole exercise was gamified and was viewed by the company board as being a great success in internal digital engagement – to the extent that some of the senior managers who had been so resistant to change got carried along on the wave and couldn’t been seen to rock the boat.

For the Innovator a key lever to success is the “prototype” culture, the startup mentality of “we’ve got a great idea, let’s go and build it and get it to MVP (Minimum Viable Product) to test” attitude (normally at odds with the Renovator mentality which takes a serial approach to ideation and can get stuck in the mire of endless PowerPoints). I was tasked some years ago to build a totally new insurance website with some radical functionality – my initial take was that after getting through the political minefield of stakeholders and the IT development waterfall it was going to take 14 months to get to market – so I took a £5000 internal budget, found an external web developer and build a working MVP in 6 weeks – to the businesses total astonishment. . . and the lesson I learnt? It’s a lot harder for a political stakeholder to kill a prototype than it is an idea, that’s a key lesson in digital transformation.

For the Renovator and the Innovator, the use of digital analytics platforms can provide an insight into customer and engagement. I hear a groan about the “insight” part coming – everyone talks about “digital insight” and it can look like an amorphous blob to many, but here’s a clue – digital analytics can provide you with a serious view of what a “hidden objection” might be – the sort of sale killer where only the prospective purchaser knows why they have walked away from a transaction and your business is left clueless. With digital analytics ingrained into every conversation about the “customer journey” you can expect to find out quickly where those hidden objections sit.

Then there is the question of creativity – the life blood of the digital startup and the often hidden asset of a business that hasn’t been transformed. Creativity is the killer edge that your business may have let go to a “moon shot” startup – my biggest challenge has always been trying to help HR work out how to find and encourage creativity without interfering in BAU.I want to deal with the “big data” issue – that “digital transformed businesses know what big data is”. I frequently speak at conferences and when I ask the “who’s knows what big data is?” I get the universal show of hands – when I ask “and what can it be used for” there is normally a sea of blank faces. For a transforming board to look at this, it is looking not at “big data” but “layered data”. Overlaying many sets of data to identify new customers segments is a given for startups – they know how to take Facebook data, layer it on to geographical data and on then onto weather data to work out there’s a new revenue opportunity selling rain capes to 24 year old Glastonbury audiences. There’s money in them there Venn diagrams.

The common question I get from Board’s is “should we be investing in startups to help the culture of our own transformation?”. Certainly having crazy startup CEO’s pop up and be disruptive inside of your own offices has benefits aside from regular injections of passion, enthusiasm and brain power – but the real benefit is to prove to your own people that agility, creativity and data can succeed over legacy businesses (preferably your competition) and provide confidence that DBAU is a realistic goal.

Finally, it often obvious to see from the outside whether a business has been digitally transformed – if you want to see that in action go to YouTube and search for “kern; the gnome experiment” and see a business that has learned to go from something that’s possibly in the boring quadrant to something that delights the world by being digitally centred.

John Straw is co-founder of tech disruption website D/SRUPTION – www.disruptionhub.com