How do you stop transformations that are doomed to fail and help Execs prevent falling into the same trap, time and time again?
Full disclosure: This is not a pitch for work; it's not about criticisms. If enough of the right decision-makers read this then maybe it will save millions of wasted funding and people's time (which equates to the same thing). It's my opinion formed over the past decade of what I consider to be both the wrong and right approach as well as what I think maybe the biggest transformation challenges to come.
In a nutshell, what is Digital Transformation?
Digital Transformation is about resetting your business (or your Department, if you are in the Public Sector). The World has been changing since just before the last Millennium. The majority of transactions are moving online. Brands have emerged that hold more trust and loyalty over our every day lives than Government could ever imagine.
A new business doesn't need to transform - unless the founders were too short-sighted to build their Operating Model from a digital perspective in the first place. So, in layman's terms, a digital transformation is about an older business catching up with today's marketplace or risk being left behind.
I'm going to stick my neck out here and make my own definition of DT:
"Digital Transformation is the process of breaking the mould of a traditional operating model to create something new that inspires trust and loyalty with your Customer transactions for generations to come"
Give the People what they want
If you agree with the above statement, then success comes from giving your Customers what they want, as quickly as possible and delighting them with an engaging, trusted and reliable transaction.
Let's take a current example: Banking in the UK.
I've been a customer of Starling Bank since the beginning. Banking was a sector that was ripe for transformation. The main players knew that they had to change but their best efforts were still in a traditional mould: Take the legacy product and roll it in glitter. Cutting staff, closing branches, shiny graphics are all cost-cutting exercises not transformation.
Everything about the @starlingbank customer experience is delightful from the easy account opening (I sat on the sofa) to the way that when I pay for something in a shop, I know the transaction has cleared (on my watch) before the cashier does. Starling were the only UK bank who could handle Bounceback Loans in an effective way - mainly because they built a bank on digital infrastructure so could gracefully scale and respond to market conditions. I heard horror stories of the main High Street banks turning away Customers because they needed an appointment in a branch, during lockdown.
There are other challenger banks in the same way there are other mobile phone networks but none of them broke the mould.
It is now inconceivable that I would ever go back to the way I used to bank and my loyalty to Starling will not change - I genuinely love them and how they have challenged the Status Quo (wow, I actually love a bank and I never thought I would say that). Everything has become easier and more streamlined. That's a model that will persist and scale. When you are focussed on generating value, returning the biggest profit to shareholders is less important.
Why is this important? Because, your Customers generally know how they want to conduct business with you. Your job is to anticipate that, talk to them and make sure that you are delivering on their needs as well as their aspirations. Remember Kodak? Who would ever think that Customers would never need to print a photo, again?
In the same way, transformation is about breaking the mould to create something new that generates loyalty and trust in a way not seen for decades. There are plenty of examples of this. As we move into a more transactional age, trust and loyalty are paramount.
You note that so far, I have not mentioned cost-saving, re-building, technology, process-improvements, consultants, value streams or the like? None of this is transformative. All those things are about protecting the past.
Trust and loyalty is the new currency
I'm going to come back to the big 4 global brands in the digital space. What do all 4 have in common?
We upload everything to one or all of these platforms. We trust them with our digital lives. Microsoft plays mainly in the corporate space, Apple mainly in consumer. Amazon and Google play happily in both.
I'm very firmly in the Apple ecosystem for a simple reason: I trust they are the most secure and I prefer the Customer experience. I know I pay a premium for this but in my opinion, you get what you pay for. I am invested in them.
They all make software and hardware (Apple being ahead of the game and more pervasive). They are in our cars, TVs, phones, cameras and in my case, lightbulbs, thermostats and motors. In short: I trust and am invested in my chosen brand.
Every year, they all push the boundaries with exciting new product launches and toys. You can argue they are more powerful than Government: Both Apple and Amazon are now in the health provider space and it doesn't take too much imagination to see where this is heading. Google, Apple and Amazon are becoming the trusted news and content providers. If the Government collapsed tomorrow, Apple would could theoretically provide everything needed.
They have such dominance that revenue is irrelevant: A small transaction fee is huge if multiplied over their Customer bases. Lifetime loyalty is more valuable.
Rolling stuff in glitter
How is that relevant?
Because you need visionaries who can help you navigate the stars and the changes that are starting to dawn on us as a population. What you don't need are traditional approaches because "that's the way it's always been done".
Because, if you need to transform your organisation, you need to shift your thinking. Fast.
That's why. Because. A three-year-old taught me that.
If transformation is about the future way your business operates, how should you go about it? In my opinion, there is no right or wrong way to do that, However, be wary of folks selling you very expensive glitter-rolling machines (see Digital transformation is dead. Long live digital transformation: A quantum paradox).
Your legacy systems and processes are legacy. That's where you need to start. You can't invent the future sitting in a dark room surrounded by the baggage of the past.
The concept of the workplace, the hours that people work, the value of the function they perform - all this needs to be examined from a new perspective.
Certainly, in the UK, both Brexit and Covid give us the opportunity to think afresh because they have broken the traditional and institutionalised ways of thinking. It has forced us to evaluate what's important in life and challenged entire sectors and their workforces. I'm no fan of Brexit (see Why I'm no longer afraid of Brexit or chickens) and the chaos it is causing but there is a single unassailable benefit in that it forces us to think again.
If the future is digital and you want to go on a transformation journey, then you need to have to surround yourself with visionaries and clear thinkers that can understand how your business transactions are likely to work in the future. Plot a course to the stars and use the value inherent in your legacy business to change your thinking. Then, work backwards - build, improve, change, respond.
I have witnessed, mainly within the Public Sector, the millions wasted in rolling legacy estate in glitter and then wondering why things are shiny but more expensive. It's like Henry Ford explaining that his Customers would have asked for faster horses. Horses won't go any faster - you need a sea-change in your thinking if you want to invent the car. The same is true for the global giants we engage with every day: Google, Apple, Amazon and Microsoft. These four brands inescapably dominate our future business models. They were built by risk-taking visionaries who created their own future.
How they impact our future lives I will cover in another article. Note, the omission of social media who are in a special category of their own because they are no longer trusted.
I hear time and time again that undergoing a transformation involves an army of expensive consultants to make process improvement to an exciting new Target operating Model (which is really the old operating model with even more process layered on top of it). I have left many an engagement due to this unproductive way of thinking.
Most of these transformation models are a waste of time because they focus on the past/present and not the future (they are just modelling what you already have).
You don't need an army of consultants to get this right. You don't need someone with decades of sector-specific experience. You need weirdos and misfits that can envisage your Customers ten years from now and can plot a course to the stars for you. Maybe Cummings got something right, after all? Now, that's something I thought I would never write!
Owen Tribe has spent the last 25 years, since the dawn of the Internet, building and leading teams to harness the power of digital and the web. In that time, he has held many senior roles and done some amazing things for his clients. He gets results, fast, whilst hitting very challenging targets in difficult situations. He can help you get something impossible done.