Mastering Digital Transformation
Four critical steps for leaders and their organizations
Every aspect of the world is being reimagined by digital forces — from the Uber you hailed on your smartphone to the latest Slack integration your team is using to collaborate.
This opens up tremendous new potential for organizations of all kinds, and yet the very scope and enormity of digital transformation (and what it requires of humans) is what makes it so difficult to master.
To lead your organization successfully in not simply integrating digital — but truly transforming your business through it — we at SYPartners focus on four critical steps (4D’s, if you will):
- Define what digital means for your organization.
- Describe a vision worth fighting for.
- Design your organization to deliver on the vision (not the other way around).
- Develop the culture and capabilities needed to bring the vision to life.
1. Define what digital means for your organization.
Until you can define a thing, you cannot master it. Far too many organizations wallow in abstractions such as “digital first” or “win in digital,” which carry little meaning and can quickly become the subject of ridicule among employees. Worse, they lack the specificity people need to take action. After all, digital transformation itself is not the destination but rather a vehicle towards a more exciting future.
Consider the following four categories and ask yourself: Where do our “must-win-first” opportunities lie? Each will require a different approach and type of leadership (and if it straddles more than one category, it’s likely CEO-led).
Business Operations (how we run our business): Often led by IT, there is a broad spectrum of value that can be unlocked through digitizing business operations, such as cost savings (e.g., shifting from one-to-one customer service engagements to online chat), business intelligence (e.g., big data), speed (e.g. real-time inventory management), and productivity (e.g. using Slack to shift how employees communicate).
Business model development (how we create new value): You’ll often see R&D and innovation teams leading in this category, focusing on new business models (e.g. software as a service, freemium services), as well as entirely new businesses (e.g., connected devices, cloud businesses) — all while mitigating the challenges that new business can create for existing revenue streams and ways of working.
Digital Communications (how we connect with stakeholders): Marketing and Communications leaders take the lead here with a myriad of new platforms and channels to navigate. In a media landscape so saturated with everyday voices and issues, corporate marketing can feel stilted and narcissistic. Moreover, this digital reality breeds customer expectations for immediacy, transparency, and authentic human conversation with brands they interact with. Thus the challenge here is both scaling your organization to master new media as well as fostering genuine and lasting relationships.
Customer Experience (how we satisfy and delight customers): As more and more goods and services are becoming commoditized by technology, differentiation comes through the experiences a company creates. Whether that’s personalized shopping, seamless integration across the platforms that customers use to communicate, or in-person moments that invite new forms of participation, leaders (from Product to Customer Experience to Marketing) are constantly experimenting with new ways to stand out in the new experience economy.
2. Describe a vision worth fighting for.
Transformation takes hold when people believe in a shared vision of the future. This may sound simple, but too often organizations allow a critical transformation initiative to languish in platitudes and uninspiring slide decks.
Digital transformation isn’t about “fixing” something broken — it’s about making something profoundly new for your organization. For example, in SYPartners’ work with a large U.S. publishing company, setting a vision was a chance to reframe a challenge (the decline of print media) into an opportunity that went beyond simply delivering through digital channels — an opportunity to expand to adjacent businesses and start a new kind of media company.
A sound vision should be grounded in your company’s purpose and be both aspirational and actionable — giving people a roadmap of where they’re headed and why (the NYTimes did a great job here). And don’t let the confines of current business units and existing initiatives hold you back. Imagine ten years out: What will your organization be known for? What will the headlines say? Frame it is as a reality: “In 2027, we will…” and then return to your purpose and how you can uniquely deliver.
3. Design your organization to deliver on the vision (not the other way around).
Structure drives behavior. Pursuing a vision without the supporting organizational structure is like shooting pool with a rope.
In 1967, software developer Melvin Conway submitted a paper to the Harvard Business Review, innocuously titled, “How Do Committees Invent?” The editors rejected it, claiming Conway had failed to prove his thesis. It was later printed in a popular IT magazine where it lay dormant for eight years until it resurfaced as “Conway’s Law” in the landmark book, The Mythical Man Month. Conway’s thesis was disarmingly simple:
“Any organization that designs a system (defined broadly) will produce a design whose structure is a copy of the organization’s communication structure.”
For example, think of a software program with two modules, A and B, that must work together to produce a result. If the designers of module A and B do not communicate with each other, there is a high likelihood that modules A and B will not work together. This is precisely why so many digital transformations fall short. If your organization wants marketing and customer service to appear seamless to customers, then marketing and customer service must be in communication.
Digital is a solvent that breaks down silos, so rather than focusing on which existing department “owns” the initiative, consider what types of new partnerships are required. In SYPartners’ work with a multi-national products and services organization transforming its approach to marketing, this meant exploring new kinds of structures (e.g., “marketing circles,” to align global marketing teams and share best practices) as well as wholly new kinds of teams (e.g., mission-based, “SWAT-like” teams to collect and distribute insights where they were most needed).
And sometimes it calls for a complete restructuring. In our work with the aforementioned publishing company, their vision required shifting from an organization where every function dabbled in both the legacy print business and in digital, to one where digital became the core business with dedicated teams and its own P&L.
4. Develop the culture and capabilities needed to bring the vision to life.
Strategy will guide a transformation. Culture will make or break it.
Every transformation requires that employees not only believe in the change, but have the ability to make that change happen. Thus, a healthy digital transformation initiative will invest roughly 20% in vision and strategy, and the remaining 80% in the long-term culture work required to help people adapt emotionally and behaviorally to a new way of working.
It’s important to ask: What’s required of our people? In the marketing transformation described earlier, SYPartners worked with dozens of CMOs and their teams across regions and business units to map the competencies required to achieve their vision. This gave them clear picture of where to build new capabilities (e.g., predictive analytics) vs. expand existing capabilities (e.g., channel strategy), which then provided the foundation for reimagining their talent model, hiring process, learning and development, and team structures.
Despite the nomenclature, digital transformation is a human challenge, not a technological one. The leaders who are most successful are those who consider the human element in each of the four steps — building belief in a powerful, clearly defined vision and setting their people and organization up for success in delivering on it.
Joshua-Michéle Ross is a Principal at SYPartners, and passionate about finding new ways to unlock human potential and enable social transformation, innovation, and opportunity within business. Previously, Joshua was based in London as the global head of creative strategy for FleishmanHillard. He has been a guest lecturer at Harvard University and has appeared on NBC and CBS Evening News as a business commentator.
