Just in case the industry buzzword ‘Digital Transformation’ has passed you, the phrase refers to adopting new technologies and digital tools to change how a business operates fundamentally. It involves using digital technology to streamline processes, improve efficiency, enhance customer experiences, and drive innovation to decrease time to market for products, services or delivery models. Digital transformation helps businesses adapt to ever-changing business environments, stay competitive, and meet their customers’ changing needs and expectations in an increasingly digital world.
Digital transformation, and any wide-reaching organisational change, must extend beyond implementing new technologies; it needs a holistic approach encompassing people, processes, and technology. While cutting-edge tools and innovative strategies are essential, the true success of any transformation program ultimately hinges upon the alignment and openness of the company culture.
I’ve found several cultural qualities that support change:
Successful digital transformation requires a willingness to embrace new ways of working, new technologies, and new ways of thinking about the business. The phrase “we’ve always done it this way” can come from honouring a company’s legacy. Still, it can be a barrier to seeking innovative solutions to emerging problems, let alone implementing them. When implemented, legacy processes, tools, and operational choices may have been the best option. But change is a constant; the competitive landscape of any company will constantly shift. What worked for you before may impede you now.
A now infamous story, Blockbuster, the market leader in its industry for over two decades, simply didn’t adapt to the change in consumer behaviour. Its emergent rival outpaced it in only a few years and ceased trading altogether. But why to do things differently when what you’ve done before has always worked out for you, right?
Agile organisations can adapt quickly to changing circumstances and are more likely to succeed in their digital transformation efforts.
By this, I mean flexibility of thought and a literal Agile implementation framework. No program of change can be fully predicted from the outset; there are too many unknowns, and pre-prescribing all of the correct steps to take or changes to make is not possible, and spending time and resources predicting the specific challenges too far in advance is inefficient.
You risk locking yourself into a series of projects that don’t serve you once you come to deliver them. Have big goals and a roadmap to guide you but do not presume that what you believe are the correct moves today will still be where you should focus your energy in 12 months. Plan in 90-day cycles at a maximum and review and adapt at the end of every cycle.
Zara, The fast-fashion retailer, has a culture of innovation and experimentation, which has allowed them to quickly adopt and implement new digital technologies to enhance their supply chain and customer experience. Fashion businesses have the helpful milestones of rapidly changing fashion seasons to sync their innovation and adaptation. Still, this process is possible for most companies if they consider themselves intentional and continuous innovators.
Zara employs a just-in-time production approach, which means it produces garments in small quantities based on actual demand rather than being locked into long production cycles and a large inventory; rather than looking for economies of scale, they benefit from economies of rapid market response. This agile production strategy minimises the risk of overstocking. It reduces the need to put the excess stock on sale later to shift inventory, allowing Zara to respond swiftly to market changes and optimise profitability.
Digital transformation requires collaboration across different teams and functions, so a culture that values collaboration is essential. Business silos hinder change because teams can feel at odds if changes are happening in one area that impacts another without adequately involving them.
This can create the impression that changes are being imposed rather than adopted, leading to resistance. Teams also lose out on lessons learned from each other, causing significant inefficiencies as teams have to repeatedly reinvent the wheel, rediscover the same challenges and resolve them all in isolation. Also, most organisations have enough complexity that it would be unreasonable for any one function to fully understand any other; critical details, processes and needs will only be noticed if changes consider the whole picture.
Conversely, being aware of progress and success in different business areas can foster a sense of momentum, celebration and a desire to ‘keep up’ with other business areas. Internally promoting successes and challenges keeps everyone feeling part of the process.
Many companies will form cross-functional teams with shared goals and be empowered with decision-making authority. Adobe shifted from selling software licenses to offering cloud-based subscription services. To achieve This, Adobe established cross-functional teams that included members from different departments, such as marketing, product development, and customer support.
These teams collaborated closely to align strategies, develop innovative solutions, and deliver seamless customer experiences, ultimately driving the company’s successful transition to a subscription-based business model. Having clear and shared objectives helped foster collaboration and alignment among team members; this collaborative approach ensured that decisions were well-informed, considering different perspectives and considerations.
A willingness to experiment and take risks is essential for digital transformation, and an upfront acceptance that not all experiments will be successful or yield a delivery of the idea that spawned the experiment. Change and growth are not linear. Any downside is minimal as long as these experiments are small and rapid. It’s also essential to perceive these intentional experiments as precisely that, not conclusive solutions.
They always yield data that teaches you something you didn’t know before and helps guide priorities and approaches. It’s also much better to learn after a few weeks of effort that something isn’t a good idea, rather than after months of implementing it.
Organisations that are willing to learn from “failed” experiments are more likely to succeed in their transformation efforts. After a few weeks of effort, it’s much better to learn that something isn’t a good idea than after months of implementing something. Organisations will only learn from “failed” experiments and are likelier to succeed in their transformation efforts. This requires the senior leadership to encourage early failure, support taking controlled risks, and celebrate learnings.
This allows team members in every layer of the organisation to feel more comfortable making recommendations and supporting change, knowing they won’t face reprimand for good intentions.
A great example of how to encourage this can be seen at Nike. Nike established “Nike Digital Labs” an internal innovation hub encouraging employees to explore and experiment with new technologies and digital concepts. This initiative provides a platform for employees to collaborate, brainstorm ideas, and prototype innovative digital solutions.
Opening up the search for good ideas to the whole organisation can give a voice to team members who might be the closest to the problems but the furthest from a decision-maker. Taking these ideas and running data-driven, low-risk experiments to validate or disprove them offer rewards in a number of ways.
Not only might you strike gold on the solution front or gather data to support a different conclusion you are also proving to the broader organisation that this is comprehensive and considered change. This can support the development of a company culture that celebrates and actively works towards transformation at every level.
diverse team gathered around a table which has paperwork and a tablet on it. they all look deep in thought
Digital transformation is often driven by a desire to serve customers better, so a culture that values the customer experience is essential. Back to our example with Zara, they adopted a customer-centric approach on their road to digital excellence, which helped to align employees around a shared goal and created a sense of purpose. They had a significant focus on gathering customer data and using it to drive innovation towards what they knew customers wanted, rather than guessing or allowing business change to be led by internal factors.
Similarly, Starbucks focused on the customer experience and convenience for its patrons when introducing digital innovations like delivery partnerships and mobile ordering. They prioritised employee training on digital literacy to ensure a seamless integration of digital technologies and processes. By empowering employees with the necessary skills and tools, Starbucks delivered a consistent and exceptional customer experience across various digital and physical touchpoints.
Rallying everyone behind what is in the customers’ best interest, backed by customer data, helps teams across any organisation support transformative work, even when it is complex and challenging.
To drive successful digital transformation, it is crucial to emphasise data strongly, necessitating a culture that highly values data and leverages it for informed decision-making. As in the above examples, we should not simply guess what will improve business processes or customer experiences; research and data gathering are crucial steps. If for no other reason, teams are more likely to support change when they know why it is necessary or advantageous. The data helps you make business decisions and make the case to get your people on board.
Spotify leverages data analytics to personalise music recommendations and create tailored user experiences. The platform collects data on user listening habits, preferences, and interactions to curate personalised playlists and recommend new songs, artists, and podcasts. Data analysis helps Spotify identify emerging music trends and inform its content acquisition strategies. At Spotify, data-driven decision-making is deeply embedded in the company’s culture. The company values a culture of curiosity, experimentation, and continuous learning. Spotify embraces a growth mindset, encouraging employees to learn, adapt, and embrace new challenges.
This mindset extends to data-driven decision-making, where employees are encouraged to learn from data, iterate on their approaches, and continuously improve their decision-making processes. This is tied closely to fostering an environment of experimentation and calculated risk and can be the basis for structuring experiments. If you value the data, you value the work and the people that produce additional, valuable data.
To ensure successful digital transformation, fostering a culture that emphasises continuous learning and improvement is vital, recognising that the process is ongoing. Organisations that can adapt and learn from their experiences are more likely to succeed in their transformation efforts. We shouldn’t be aiming at singular changes, software rollouts and policy updates. It is not a one-and-done type of thing.
Continuous improvement is now the permanent state of play. So it’s important to be honest with all teams that change is essential and never-ending and that they are the key to its success. Embodying the above values will improve their organisation and how the change occurs.
One way to encourage this is to bake it into people’s roles actively. The well-known origin of this practice is Kaizen. Kaizen promotes the belief that no process or system is perfect and there is always room for improvement. It encourages employees to constantly evaluate existing practices, identify waste or inefficiencies, and implement changes to eliminate them. Crucial to Kaizen is recognising the value of every team member’s input and encouraging active involvement in the improvement process. It fosters a culture where all employees are empowered to contribute ideas, voice concerns, and take ownership of the improvement initiatives.
One example would be Google, which implemented a policy known as “20% time,” which allows employees to dedicate 20% of their workweek to pursuing projects and initiatives outside their core responsibilities. This policy encourages employees to explore new ideas, learn new skills, and experiment with innovative solutions.
This freedom fosters a culture of continuous learning and empowers employees to contribute to Google’s ongoing transformation. Famously, Gmail and Adsense were among the services developed by individuals and small teams during the 20% of their time allotted to innovation.
A receptive company culture encourages collaboration, embraces innovation, and empowers employees to participate in the transformation journey. It fosters an environment where individuals can voice their opinions, share insights, and contribute their expertise to shape the digital future of an organisation.
By nurturing such a culture, organisations can effectively overcome resistance, scepticism, and other barriers that impede progress.
Successful digital transformation requires a comprehensive approach beyond just implementing shiny new tech toys and tools. You must embrace change with open arms, stay nimble and adaptable in the face of shifting circumstances, and foster team collaboration. Don’t be afraid to get a little experimental and view all tests as an opportunity to learn and adapt. And, of course, always keep your customers at the heart of everything you do, making data-driven decisions to provide them with the best experience possible.
Remember, it’s a journey of continuous learning and enhancement; there is no conclusion, but always the next improvement iteration.
