How can traditional companies approach digital transformation?
As a digital native working in marketing and innovation consulting I often take for granted this whole “digital transformation” thing. Recently one of my client partners asked me a powerful question I hadn’t yet considered and it got me thinking. The question was “how can traditional companies approach digital transformation?”
Before I get into the how, let’s make sure we’re all coming from the same frame of reference.
What is digital transformation? If you ask that question, you’ll get a lot of different answers. I believe digital transformation is using technology to shift and to enable how you do business and improve or streamline the way you deliver your products, services, and experiences of value to your customer. Digital transformation is now a buzz phrase and you will likely come across plenty of white papers, seminars, and companies that promise to deliver the magic pill to cure all of your digital transformation needs.
But what I think people forget is that no transformation is ever linear or delivered in a magic pill like an old Jetsons cartoon episode.
We all celebrate and idolize the Silicon Valley entrepreneurs and visionary CEOs.
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This isn’t another article about disruption. This article is about how anyone can start to approach transformation within their business or organization.
I believe that digital transformation can be easily approached by what I often explain as the four D’s of digital transformation.
Data — What data do you collect (processes, product, customer, etc) and what are you doing with it to improve your business or progress?
Decisions — How are decisions made within your department, company or industry?
Design — How is your business designed and organized? What is your industry, systems, business model or experience and where are the opportunities for improvement?
Delight [delivery] — What does delight and delivery look like for your customer? Your boss? You?
From Telegrams to Telephones to Telepathy: Transformation starts from yesterday.
As a futurist I get some of my best ideas on the future by looking at the past, which is the best predictor for our uncertain futures. For me sci-fi movies and comic books like Dick Tracy paved the way for the Connected smartwatches and gadgets that we know of today.
The two best ways to see the future are to study the past and nature.
Speaking of the future you can’t not think about spaceships and space voyages. Star Trek not only inspired how we tackle complex social issues or communicate with machines — Amazon went as far to even let you change Alexa’s name to “computer” as a little nod to Star Trek.
We didn’t go from the Telegram to the telephone overnight and I believe that anyone trying to approach digitally transforming their company or business needs to take a pause and first identity where they are at in the journey.
Where are you right now?
If you aren’t even doing basic use of digital marketing at your job today do you really believe going to an enterprise-cloud platform powered by AI is something achievable for you right now?
The amount of times I see companies go “all-in” on expensive technology transformations only to fail and end up abandoning the project sickens me. It isn’t because making this leap is hard, in fact there are thousands of consultants and platforms that will happily hold your hand (and bill you for it) every step of the way to make your desired transformation happen. Acclaimed marketing technologist Scott Brinker’s marketing technology landscape “Martech 5000 (now 7,040 as of April 2019)” image shown below is one I use often to educate my client partners on the many choices that they have today for technologies that can further drive and enable their business. There are thousands of options and most of them can take you where you are likely headed.
Alexander Graham Bell and his trusty assistant Thomas Watson might have gotten the credit for the invention of the telephone we know of today but their work was later iterations of great scientific research breakthroughs from the likes of Cyrillic Duque, Elisha Gray, and many others.
True transformation lives in the shades of grey: Taking small steps for big outcomes
I believe the answer to any digital transformation lives in the shades of gray between black and white. It is about the graduated change taking smaller more incremental steps that will lead to the results that you seek.
Ok Pete graduated change what does that even mean? Great question, I was getting there. I explain this concept like being able to go from not going to the gym to running the NYC Marathon overnight. You have to literally walk before you can run sometimes and finding some small wins is the fastest way through in my opinion.
Graduated Growth by design.
Just like Brian Chesky didn’t just go from renting his apartment and an air mattress to the global enterprise that we know today as AIRBNB true transformation happens with what I like to call graduated growth.
Change is hard. Humans don’t like change.
Humans need priming. Behavior change is best achieved in small iterations. As James Clear, author of the New York Times bestselling book Atomic Habits, explains, the process of building a habit can be divided into four simple steps: cue, craving, response, and reward. It’s not a habit that I believe is holding back the way we approach change in our day to day lives, it’s the cue.
Consumer behavior adoption requires slow shifts; baby steps if you will. Scale and critical mass live in the center of a bell graph and that is why a technology company will shift its messaging and how it markets often as they are trying to scale. Facebook, Uber and all the apps that are ubiquitous today started out in the hands of early adopters who put up with the long lines, the product glitches, and all the things that come with being an early adopter. As an early adopter myself I can say I often trade stability for convenience.
So if you are stuck in your role at work, whether that’s a Silicon Valley Startup, an Ivy League University or a Fortune 100, I encourage you to start where you stand.
Start with what’s already in play: Mapping.
Ever heard the phrase the best camera is the one you have with you? I suggest the same school of thought if you are facing an antiquated way of doing things.
When approaching any transformation, first I suggest that people start with what we at Digital Surgeons call an Experience Audit. Buzzwords aside, this is as simple as taking an inventory of your business and your internal and customer-facing touchpoints.
Take out a piece of paper or use a whiteboard if you fancy. Start by drawing or writing down the following:
- How are you structured (org chart)?
- Where are you trying to go?
- What are the top three things standing in your way of getting there?
I often ask my client partners and teams this question: What is stopping us from doing the greatest work of our lives?
That then starts to reveal patterns and blockers, many of which are realities that any business will face. Stage gates (process), stakeholders, budgets and time are some of the most common answers I get when facilitating sessions like this.
We often start by mapping all the various components; people, processes, things, systems as individual elements.
Businesses might use machines but most of them are powered by people and people are complex adaptive systems.
From here to there exercise:
You are here. You want to get here. Now let’s walk backward, one step at a time. There’s plenty of available tools to approach this such as the 5 Bold Steps Vision Canvas available here
A less visual person? Write it as a story.
Our story today is…
Today we are a legacy maker of (for example) headphones and acoustically sound audio equipment. Our systems and ways of reaching and delivering to our customers is limited. Our product and engineering teams don’t understand the wants and needs of the market and are designing and marketing to yesterday's consumer.
Our story tomorrow will be…
We are the leader in audio equipment for consumers, prosumers and audiophiles. Our sales, marketing, and product teams work together to actively listen to the needs and wants of the market. From musicians to Tik Tok-loving Gen Z’s, we are also seeking out trends and finding ways to innovate our product and the experiences our customers have with them. While yesterday we were known for our hardware, the war for the future will be won on experience and that means embracing the software and integrations that people use today. We’ll go beyond trivial integrations like Amazon Alexa or Google Assistant and understand how our customers are really using our products.
Finding your CANS and CANNOTS
My father once told me that the answer is always no if you don’t ask or try. So before you roll your eyes and accept your fate of being “stuck” let’s dig a bit deeper.
- What is working?
- What isn’t working?
- What have we tried?
- What haven’t we tried?
- How are you structured?
- Are you a matrixed organization?
- How and who is responsible for what decisions?
The trouble with decisions is most people don’t even know how they get made.
One thing that surprises me every single time I come across this (often weekly) is that people across an organization — from interns to CEOs — often don’t understand the way decisions are made (or blocked) within their organization.
Last week I was on a conference call with a few members of the C-suite of one of my partners. They asked me to help present a new concept to their board of directors. I was flattered by this and started to inquire into why. It was then that I learned that while they are incredibly talented executives with full knowledge of governance, strategy and how to grow their company, decisions and the emotional buy-in behind them continue to be an enigma.
One exercise that I have found that helps to remove the barriers to getting things done centers on the concept of making decisions.
Try using a Decision Matrix
Take out a piece of paper, or grab a whiteboard and draw the following:
I learned this technique from Shane Parrish the founder of Farnam Street an awesome site all about mental models.
I made a list of all the decisions I had to make and broke them down into four different types.
- Irreversible and inconsequential
- Irreversible and consequential
- Reversible and inconsequential
- Reversible and consequential
Now think about some decisions you are making today or this week.
Often I find that the cost of indecision far outweighs the cost of the wrong decision.
Game-changing innovators don’t get to their big breakthrough or transformation by standing still.
Ford experimented with horses & carriages before he got to the horseless carriage.
Once you understand who and how decisions get made, then and only then can you get to the permission structures that are contributing to or constricting the innovation and progress you seek within your organization.
Reversible decisions should almost always be something that helps empower your teams no matter how junior they might be. These are the decisions that create the breeding ground for breakthroughs in your environment.
If you understand the blockers and process for how decisions get made then you can start to find your path to progress and that is how you can get one step closer to being the next Amazon, Google, or Uber.
The language of digital transformation is more than WWW’s and zeroes and ones
Just like digital transformation has become a “catch-all” to capture how businesses connect and deliver their experiences, teams trying to improve experiences are too hell-bent on the technology and not nearly focused enough on the human problems they are trying to solve or serve.
Questions are often more important than answers. One of the core values that guide our company and customers is “be curious.” Curiosity starts by challenging the way things are done in an effort to uncover the way things can or can’t be.
While I’m all for Simon Sinek’s famous TED talk on “Start with Why” I have seen how offputting asking someone a WHY question can be.
So I like to start small when met with friction. Submerge past the surface. Get to the root causes.
Two tools that I borrowed from the design thinking world are FIVE-WHYS and what I like to call “would/wouldn’t.”
So here’s another situation where I was consulting for a company that was getting held up with too many cooks in the kitchen, creating a situation that was slowing down progress. I was asked by the senior leadership team to investigate why product design decisions were getting held up.
I approached the VP of product, who was growing tired and frustrated over the many roadblocks that stood in the way of testing new design ideas. He told me in confidence that he was growing tired of the company and considering a job switch.
Me: So what do you think is the reason why things are getting so held up?
VP of product: Well, there are too many cooks in the kitchen. Everything is being micromanaged and my hands are tied waiting around to get meetings on the calendar with the two other people who need to approve shit before it can get designed.
(My first thought was to see if I could get these three together in a room to help lead a co-creation session but I could feel tensions were high and that would only further anger the VP I was tasked with helping.)
Me: I can see how that might be frustrating. Let’s see if we can’t take another look at this. I’m sure the company would be very sad to see you go and I know how much you believe in this organization. Can you help me understand why three people have to approve this before it can get into the queue to be designed?
VP of product: Because our engineering lead needs to sign off on the technical feasibility.
Me: Ok. Why do the other two people need to sign off on this decision then?
VP of product: Well, our president likes to approve all product decisions before we get them into the schedule. And the final approval is from me because my job is to develop the product and manage the roadmap.
Me: Awesome, why does your President like to approve all product decisions before getting them into the schedule?
VP of product: Before I joined we had an inexperienced product manager who approved a ton of expensive changes that never made it to production causing us to miss two quarters of sales numbers.
Me: I see. So would you say that your President trusts your ability to make decisions that will lead to growth?
VP of product: Of course she does. She hand-picked me and we worked together years ago.
Me: Fantastic so what would it look like if the next product release cycle she let you get a few items planned without her needing to sign off?
VP of product: Well I never asked. That’s a pretty good idea.
Me: Great! I can’t wait to hear what she says. While we are on the topic of decision making and blockers to new ideas for your design team to test can you help me understand why your engineering lead needs to sign off on new ideas?
VP of product: Well, Ben is a control freak and he is sick of things being designed that aren’t possible to be coded within our current systems.
Me: Interesting… Would you say you and Ben have a good relationship? Does he trust your technical acumen?
VP of product: Yeah Ben and I are friends we are on an adult-hockey league together and talk shop outside of work often.
Me: nice. I wish I could ice skate — last time I tried I ended up just hugging the side rails and counting down the minutes till my ice time was over. So if you asked Ben to join you in earlier reviews or perhaps trust you to evaluate ideas based on their technical feasibility without his sign-off what would he say?
VP of product: He’d probably say go for it as it would be fewer meetings for him to sit in so he could get more code shipped with his engineering team.
I won’t bore you with the rest of this story but I’ll fast forward to the end. Just this one curious conversation and we were able to go from three decision-makers that often had to play calendar twister to get in the same room (more delays) together to empowering the VP of Product who was more than competent to be the only decision-maker required.
Since getting this in play I’ve seen so many measurable results starting with my client being happy in his role. Can you imagine the cost in time and turnover costs that my client (company) would have to absorb finding another competent VP level Product Manager? Exploring what would or wouldn’t happen is a tool we use often to get people into a curiosity mindset that is more playful. Sometimes all we need to do is tap into our inner children to get to the path to progress.
Dream forward. Work backward.
Mapping a clear picture for a team on where things are going is a powerful tool for building comprehension, and establishing much-needed buy-in or consensus on where things are going.
In spirit of starting where you stand I also like to introduce a simple two-by-two that can help get a team generating ideas for how to improve their product or service.
First I like to pick a few “targets” to focus on.
“Pretend” that the things standing in your way weren’t there. What would we do that could help improve our sales initiative by 10 percent this quarter? then set a timer and put on some music to get the group feeling the scarcity. I generally will limit this to three to five minutes (max) and ask the group to write or draw one idea per post-it note.
When the timer is up I have each participant get up to share their idea post-it by post-it and on a grid place where they think the idea would yield based on the Effort (time or cost) and then the Impact (against the goal we’ve agreed on, typically economic or business impact).
Since the biggest thing often holding us all back emotionally is not feeling or seeing progress I like to suggest that we start with the top left items (high impact / easy to do) that we can knock off the list. Sometimes even the simplest of things can lead to progress.
Last week I sat in a design review and watched an entire table full of people from different departments arguing over an email newsletter. I sat there counting the minutes and cost per minute and voices got louder and the quality of discussion devolved quickly.
Have you ever sat in a meeting like this? We’ve all been there. So when tensions got unbearable, I stopped the room and asked the group, can someone please tell me who we are solving the problem for and why it is indeed a problem? I got crickets. Turned out the problem was, they were trying to get more people to use the store locator to drive more in-store traffic for a consumer packaged goods brand. When I looked at the email in discussion there wasn’t a single call to action featuring the store locator.
Rather than adding to the discomfort I asked so if we agree we are trying to drive more people to this store locator what do we feel is the best path to get there?
“Add a button for the store locator” said a copywriter.
“Replace the image of the product with a photoshopped image of the product in-store and call out the store locator,” a developer quickly jumped in on.
“Add a button that says Find a Store near you,” said an intern from the corner of the room.
Team, it sounds like all these ideas are strong solutions. Which one will be the easiest to implement?
“It’s done, can someone refresh the preview link”. Yup. Just like that the intern made the change. “But what if that isn’t the right solution?” The beauty of modern software (and hardware) is that we can often test things before doing a full rollout. This type of experimentation started out as the scientific method and has been evolved into its own set of modern buzzwords ranging from Six Sigma to Lean Startup and Design Thinking.
So you are probably thinking, I need to get some super interns like that. So quickly our minds jump to how before why. Why was it the intern that acted so quickly? Because they were not afraid to act. I feel like the more senior the person and their title the more they are afraid to act. I get it, you have more to lose than the intern.
So hopefully now you have a few things you can try to start iterating your way forward.
- Time for another approach for that 1:1 with your boss?
- Perhaps start testing more frequently before shutting down smaller possibilities that might lead to true transformation?
- What are you going to try first? Share with me in the comments