Transforming an established company into a digital business isn’t rocket science.

It isn’t easy either… but even the most traditional organisation can adapt to the digital economy successfully — and avoid a whole heap of expensive pitfalls — by following this simple, pragmatic approach.

Wilson Fletcher
Feb 11, 2019 · 6 min read

Digital transformation is a topic on the agenda of most established companies today: there are few leaders who would not recognise the imperative to adapt their companies to better compete in the digital economy.

The process of digital transformation is generally focused on what I’d call ‘technology and operations reform’. Retire old tech, implement agile, make the company’s processes as digital as possible using modern tech.

The question that few can answer convincingly is ‘what are you transforming into?’ I get answers like “a more customer-centric organisation” or “an agile organisation” or “a business better able to service the needs of future customers”.

Haven’t businesses always needed to be these things? What about any of these statements is likely to make me confident that these companies will become thriving digital businesses?

The end goal for any established company today should be to become a business whose answer would start more like “we’re becoming a digital business that…”. Becoming a true digital business demands that you run the entire company with a digital-first mindset — but does not, and this is a common misunderstanding, demand that everything you do is digital.

To operate confidently with a digital-first mindset you need a series of core strategic components that are understood by everyone in the organisation and committed to fully by its leadership.

The Company Core.

Purpose

Vision

Assets

Values

Domain

No agile, no tech?

Don’t underestimate how important these components are, or how powerful they can be when done well. I’ve seen a reframed and rewritten purpose statement alone transform the ambition and behaviour of an established leadership team. When they’re properly formed — and used well — these core components underpin every aspect of the company’s behaviour as a digital business.

You’ll note that there is no mention of agile or lean or technology anywhere here. That’s deliberate and important: too many companies are lured into thinking that approaches like agile are their silver bullet. They’re not, and it’s critical that leadership teams recognise this and get their strategic core components well defined before implementing any substantive changes in approach. If the exec team isn’t confident and aligned behind the core components, innovation initiatives will lack imperative at board level and are almost guaranteed to underperform or underwhelm. There’s a reason the core components are framed in the language of business.

A robust company core enables the more experimental transformation and innovation initiatives needed to enact change.

Define key transformations.

We always write transformation statements in a ‘From > To’ format, keep them as short as possible, and aim to have no more than a handful that the company should focus on. Each has a short accompanying rationale.

Here’s an example, from a data company:

From: End of day delivery
To: Real-time access

Why? Our customers make decisions on a real-time basis, and we maximise our value to them if we can support them exactly when they need us.

Here’s another, from a financial services company:

From: claim-centric
To: person-centric.

Why? We have a huge impact on our customers’ lives. The less we think about siloed transactions, the better we can understand and support the people involved in them.

These are real examples (I’ve amended both to anonymise them). I hope they illustrate why they’re such useful tools, because it’s not hard to see how they can inform decisions about everything from business models to technology architectures.

This is one of my favourite things about transformation statements: you can measure progress against them, and they can be particularly useful in focusing the transformation activities of long-established companies and high-earning legacy services.

Innovate at a service level.

One of the main reasons that conventional strategy doesn’t work well in digital businesses is because it tries to define too much at the level of the company. Service-led strategy overcomes all of the conventional shortcomings and enables traditional businesses to transition into digital businesses pragmatically.

Native digital businesses do this naturally — allowing Google (or Alphabet) to run its Android service in one way while its search service is run differently, or Amazon to operate its e-commerce service alongside its AWS web services. Different services, using optimal models for each, operating around one Company Core is the way digital businesses succeed.

Even single-service companies should think this way because otherwise they’re putting themselves in handcuffs, limiting their ability to innovate in the future.

A simple, powerful approach.

I’ve seen this approach work well in an incredibly diverse range of organisations. It works because it’s practical and simple. After the core components are defined up-front — which can often be accomplished very quickly — a company can start to innovate and transform with confidence at a service level. It’s highly rigorous but fast, and it doesn’t waste effort or money on activities that have little or no value in defining a digital-first future for the company.

Transforming an established company into a digital business isn’t a walk in the park, but it isn’t a flight to the moon either. The approach I’ve set out here can help even the most traditional companies regenerate as businesses fit for a successful life in the digital age.


Mark Wilson is a Founder Partner at Wilson Fletcher, a business innovation consultancy that helps established companies design the strategies, services and experiences needed to succeed in the digital economy.

Wilson Fletcher — The Human Layer

Insight, thinking and perspective on designing successful…

Wilson Fletcher

Written by

A business innovation consultancy. We design strategies, services and experiences that turn established companies into strong digital businesses.

Wilson Fletcher — The Human Layer

Insight, thinking and perspective on designing successful digital businesses from the team at Wilson Fletcher

Wilson Fletcher

Written by

A business innovation consultancy. We design strategies, services and experiences that turn established companies into strong digital businesses.

Wilson Fletcher — The Human Layer

Insight, thinking and perspective on designing successful digital businesses from the team at Wilson Fletcher

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