Digital transformation is a journey that involves the ideas and processes used to optimize an entire business ecosystem around digital technology and customer-centricity. However, it’s the essence of transformation that represents a hyper-connectedness between goals, a purpose, stakeholders, and most importantly the customer.
But what triggers a need for a digital transformation? Most often, it’s the social and behavioral changes that take in society; this is a starting point for measuring the need to innovate.
Before a company can embark on their journey, they must also understand how to cultivate the right talent. And it all starts with providing prospective talent with the right resources and opportunities.
As the transformation of business activity around new technology accelerates, technology professionals must also adapt at a rapid pace. Often, business leaders and technologists (IT teams) speak different languages. A focus on available features of new advancements or benchmarking competition in a market isn’t always an adequate driver for transformation. The two parties must integrate, share knowledge, and solve the same problem.
Identifying Readiness For Digital Transformation
Think about this example: A large technology firm needed help with developing a digital strategy around a tech-venture fund they created, aimed at driving innovation within their organization. The project was a targeted approach to improve workforce retention, specifically the millennial workforce. The turnover of younger employees was a serious challenge, and the success of a new digital strategy rested in the hands of attracting this tech-savvy demographic.
As we discussed in the article Attracting And Retaining Talent With The Millennial Mindset, opportunity alone isn’t enough to attract new talent to your organization.
The technology firm launched the project by asking their experienced digital consultant, “can you give us a crash course on digital keywords so that we can understand what millennials are talking about.”
This initial question, especially in the very beginning stages, was a key indicator of the organizational preparedness of the firm. In this case, it was apparent that a bottom-up strategy was all they were focused on, which likely wouldn’t solve a single problem for their business customers.
Digital Transformation Explained by a Professional Consultant
An experienced consultant for many large technology-driven projects, Dr. Joe Carella from The University of Arizona, Eller Executive Education Program, explains that digital transformation can be used to question organizational preparedness; gauging a company’s readiness for combining their digital and physical worlds.
In this article, we define readiness as an organization’s level of preparedness for the disruption that the business world is experiencing. It’s a cycle of changing social norms, behaviors, and technological advancements that influence organizations to adapt and innovate or face being left behind.
When analyzing organizational preparedness for transformation, a company falls into one of these four categories — each level represents the focus (goal) when “going digital” :
- Ecosystem Lifetime Value
- Business Model change
- Customer Experience
- Operational Effectiveness
Ecosystem Lifetime Value identifies the most sophisticated level of preparedness for a complete digital transformation. At this stage, companies have successfully merged the physical and digital world in which they operate, adding value to the entire business, and even more important, their customers. Very few companies reach this stage prior to embarking on their transformation and some never will. For many, their level of preparedness doesn’t need to be this advanced to allow for success in the digital realm. However, past transformation examples prove that a customer-first approach is the main catalyst for upward growth on this scale.
Stages Of Digital Transformation Readiness
Through his research, Dr. Carella recognized that most organizations are in the following different stages of the digital transformation process:
Symbiotic: This represents the most advanced organizations that exist today. They already operate with the customer at the center of their online and offline business. They also drive strategy in sync with technological change and have honed digital skills across all business functions.
Advancers: These organizations have a degree of digital readiness across departments. They have a pipeline of projects and are actively building a culture based on digital skill sets.
Integrators: Integrators are characterized by having an integrated front and back office with a short term vision for technology change; only some core processes are automated. They commonly only have a front-end integrated customer experience resulting in a need for digital strategy — these initiatives remain in silos.
Survivalists: This grouping describes a business that invests in just enough technology to survive. Most often, leadership is fearful of technology risks and only focuses on traditional sales channels.
When analyzing where a company falls on the readiness scale, it’s crucial to reference their business model. However, the majority of today’s organizations fall in the “integrator” or “advancer” category.
How To Close The Digital Transformation Gap
From what we have learned so far, closing the digital transformation gap requires the following actions. The entire organization needs to commit to a cultural shift. Leaders at all levels must act beyond the scope of their role; as integrators & architects — progressively building a vision on how a digital transformation applies to their organization.
How To Build a Vision For Digital
- Use alternative modes for recruiting digital AND traditional talent — traditional talent, discovered through digital platforms, will likely have the acumen and mindset needed for the modern culture.
- Identify talent development gaps within the company and build digital acumen. NOTE: Look at the job descriptions of your closest competition and identify if you have those roles within your own organization. This will uncover obvious talent gaps.
- Adopt a structured framework to identify priority areas where digital initiatives can be tested.
Understanding Digital Realignment
- Learn from others already ‘doing’
- Identify micro pain points
- Conduct Peer-development across the company
- Pilot, roll-out and test solutions
Accelerating Digital Readiness
- Use an integrated framework to conduct a gap analysis
- Develop awareness of how other companies overcame challenges and obstacles and leveraged opportunities
- Develop an integrated action plan for successful implementation
Final Thoughts On Digital Transformation
One of the most important questions that both leaders and stakeholders can ask is, who’s going to be here to sustain the business for the next ten years?
It’s no secret that the millennial workforce is the master of digital technology and embrace innovation; they are the group that’s next in line to lead. However, they lack is the ability to apply their digital prowess to the big picture while executing the transformation process. They want to do the work but still need the leadership in place to make it happen.
For some organizations, the transformation gap is a conflict, but for others, it’s an opportunity — it all depends on an openness to change. There are many moving parts involved in the transformation timeline, yet the need for the right talent remains constant. How successfully leaders merge these two groups of professionals will determine how well they can create the culture needed to progress.