It’s not just about the technology or the culture!
Digital transformation is one of the most widely talked about and hyped terms of our time. All organizations are enthusiastic about embarking upon a transformation project as the rewards can be significant if completed successfully. Though the success with change is not guaranteed as the vast majority (60–80%) of organizational change efforts fail. When it comes to digital transformations, Bain research suggests that a mere 5% meet or exceed expectations. As the average lifespan of S&P 500 companies has fallen to just 18 years, business transformation and digital disruption are more important than ever before. If companies don’t consider how to manage the change before embarking on a large project, they may be risking ending up in the “failed bucket” without yielding any long term value. Most experts underline the need for top leadership support, culture change, upskilling, need for agile and diverse teams as the true enablers for a successful digital transformation but these best practices do not guarantee the success either.
Increasingly, companies are realizing the battles are not just to buy the technology or create agile teams but spend as much resources on identification of the customer centric business problems/opportunities and then re-engineering workflows and legacy organizational models. Leading the process and organization transformation is make it or break it for the success of any digital transformation of a business. The value delivered as an outcome is amplified when the underlying projects are executed with meaningful process improvements.
Value (Digital Transformation) = Process Improvement x Digitization
The Need for a Holistic Approach to Process Improvement
The key to success is to ensure the right efficient process is digitized for scale up and then the sustainability is achieved that is not dependent on tribal knowledge. Accelerating change in enterprise-level is easier via leveraging the best practices that are proven to work and I will refer to 4 of them today.
Design Thinking, Lean Six Sigma, Agile and DevOps mindsets aren’t mutually exclusive. This is confusing as people prefer simple explanations and managers do not tend to have a long attention span. But the world is fuzzy and moving much faster now. We need to be comfortable with blending and combining these different approaches in meaningful ways to solve our strategic problems to survive. I like thinking of them in terms of the business risks types and the degree of uncertainty of our problems as below.
There have been attempts to explain how to use them together. Gartner introduced a model combining Design thinking, Lean Startup and Agile. The challenge for large companies and project teams, however, is to understand how to use these methodologies optimally and when to shift up and iterate back and forth from one to the other. We should think about these methodologies as tools within your process toolbox. Change leaders can pull different tools out when you need them, regardless of where you are in the transformation process.
If Design-Thinking can help identify new innovative ideas, Lean Six Sigma can help define to scope and identify the future process and Agile to quickly build them. Finally, DevOps could be leveraged to operate and continuously improve the transformed processes.
Consider Agile, for instance, a best in class methodology that permits teams to move rapidly and deliver high-quality work while responding to dynamic changes. This allows businesses to stay aligned with the needs of the customers and the interests of the stakeholders. However, Agile teams often lack a bird’s eye view of the situation.
This is where the Lean Six Sigma strategy kicks in ideally ahead of your Agile phase. Lean can help solve critical problems by suggesting tools, road maps, and phases which are inherently based on a bird’s eye view of the situation. Below depicts another way of looking at these four methodologies with the degree of maturity of your business model that is under transformation.
A common mistake companies make is trying to forcibly solve all their problems with a single methodology that they see as a “silver bullet”. A better approach is for businesses to blend these methodologies and enjoy the benefits at the right phases. By bringing together, these tools can reinforce each other, eliminate their individual shortcomings, and work in cohesion towards the realization of a higher ROI for your digitization investments.
Resources and further reading:
Understanding Design Thinking, Lean, and Agile — Jonny Schneider — O’reilly