Digital Transformation has been at the forefront of most business strategies for at least the last two years and, in many cases, for nearly a decade. In the main, even the most traditional of companies have cottoned on to the fact that the experiences and services that their customers value are probably not the ones that they are delivering. At the very least, there are competitors and digitally native disruptors who are already doing it better. Brand loyalty can only go so far these days, where a seamless, personalised, omnichannel experience is a minimum expectation.
The exponential rate of external digital change means that we now live in a world that never stands still. Where being adaptive to change itself is an absolute requirement and not just an expensive-sounding aspiration of the CIO, which is given lip service on an executive away day. Nor is it something to scoff at, with the sense of security that 150 years in business can sometimes conjure. In fact, in the digital age, 150 years of business often creates a huge ship to turn and a tiny space in which to turn it.
In its most natural form, digital transformation, particularly in the private sector, can be summarised by these two distinct objectives.
- To develop and deliver digital services and experiences that consumers expect
- Restructure the company's entire internal operations to enable continual alignment with external digital change and therefore can continually develop and deliver the digital services that customers expect.
Both of these objectives are critical to customer acquisition and retention. It is inevitable that digitally native companies with no legacy baggage to deal with, alongside competitors that have stolen a march on making digital changes, can and will deliver the services and experiences sought after. These are the companies that will naturally take the largest market share in the weeks, months, and years to come.
Although digital transformation can be distilled down into two short sentences, these are incredibly complicated and challenging objectives for every organisation. Achieving them requires a complete change in the way that the people in the organisation across leadership, staff, and the company's executive need to think, work, behave, and ultimately what they believe in.
It is this reliance on the people within the organisation that often derails transformations. A massive 70% of digital transformations fail, and by far, the biggest barrier and cause of failure to any digital transformation is the people in the organisation. The ship simply will not turn. It's been on the same course for too long. But without warning, seven weeks ago, an iceberg comes out of nowhere. It was enormous, and a collision that would sink the ship was inevitable if leaders of businesses did not immediately plot and execute a new course. The iceberg was called COVID-19.
Reacting to an existential threat.
COVID-19 changed the way that millions of us work. Not in months or even weeks but a matter of days. The crisis blew apart scores of business continuity plans that focussed on lifting and shifting an entire workforce to one alternative location. In the space of a few days, in many cases over a single weekend, organisations scattered their whole workforce to several thousand remote locations as home working became the new norm.
While this has been a tough transition for workers and leaders alike, it has proved that when businesses give people the right tools, the means to communicate and to collaborate effectively, then commuting to an office, is not always required. It has also proved that when necessary, even the largest businesses can make changes so rapidly that it makes you wonder how much companies could achieve if they treated other aspects of digital transformation with the same urgency.
Leaders should now recognise that the small and medium sized "digital" icebergs that they are tentatively navigating around at the moment will soon become a completely frozen ocean.
An ocean that will grip their vessel tightly, stopping any progress at all and ultimately breaking the ship apart. If our leaders can learn this lesson, then maybe we would start to see some truly significant transformative change.
The global business community is seeing benefits that no-one thought possible at the start of the crisis, and incredibly those benefits appear to be improving day by day.
A report undertaken by IAB Russia with its members on March 26th, 2020, and then again on April 22nd, 2020 illustrates the positively changing picture. When asked about positives coming from the crisis, 51% now say that it has made their business more productive. This is up from just 23% in March.
46% said that the adoption of new business technology was a positive impact, again dramatically increased from 23% just a few weeks previously, which clearly shows how much progress and capability is being rapidly deployed.
34% believe that the crisis has now given them access to new business opportunities.
And now, nearly seven weeks into the lockdown, there are clear signs that the initial, frantic change and emergency activity has almost concluded and as companies settle into a new way of working. And it seems to be working well.
A survey from XpertHR on April 2nd, 2020, just two weeks into lockdown showed that almost half (42.8%) of HR professionals were spending all or most of their work time on dealing with the effects of the crisis. That reduced to a third, four weeks in (32.3%). In their most recent poll, six weeks into lockdown, only 1 in 5 (20.8%) of the HR professionals surveyed said that they were spending a significant amount of time dealing with the crisis. This improving position is a clear indication of business bedding in, and ultimately succeeding to operate in the new world and is a testament to our companies and the people who work within them.
From Crisis to Success.
To me, this success, this approach, this unity, and tenacity has shown that previously reticent companies are more than capable of real digital transformation, which will not only enable them to survive but thrive in the digital age.
Because this pandemic has forced a real "leadership moment" and necessitated one of the steepest and most profound global leadership learning curves of all time, the people beneath them have responded unequivocally.
For years consultants like me have been banging the drum that transformation must be led from the top and is not an IT project. Never before has this requirement been so undeniably and globally proven. It has been a light bulb moment of monumental proportions for leaders across the world, and in the main, they have stepped up and led their organisations through the storm.
This is the type of transformational leadership that brings about genuine transformation, and I am optimistic that this is how most will continue to operate. This is what can happen; this is the art of the possible when leaders lead decisively, from the front with a clear vision and strategy. The crisis required a business and technology transformation unlike anything ever seen, but it was also a personal transformation for entire workforces. Exactly what real, digital transformation also requires.
This morning I read a quote from the CHRO of one of the world's largest insurance companies. She said, "the crisis has created a level of transparency and trust in our workforce we haven't seen in decades."
This trust, new to more traditional organisations is precisely what is required to achieve digital transformation. A digital culture is built on trust and empowerment. In a digital culture, the status quo isn't acceptable. A digital culture knows that if it sits still, then it's falling behind. And it isn't just a leadership thing, its top to bottom and left to right.
In a digital culture, people are empowered to make decisions without the need for committee or sign off. There must, of course, be some guiding principles and a framework of appropriate governance, but in a digital culture, people are trusted to make decisions. There are sure signs that the rapid change to remote working and the sheer necessity of this forced this approach. There was no time for planning, testing, and layers of governance committees. Leaders are trusting their people to work, make decisions, and to implement what is required to achieve the objective. This trust and empowerment has also flowed into business as usual as remote workers are now trusted to manage their own workloads like never before. Trusted to be more independent and have more accountability for the results they produce.
A digital culture only plans short term. In the digital age, things move way too fast for any traditional waterfall planning. By the time the plans are drawn up, they're out of date, and you're still falling behind. A digital culture promotes speed and iterative development. New products are launched as soon as possible, not when they're perfect. This is exactly what was necessary to enable the pandemic workforce to continue working. Maybe the remote solution wasn't perfect, and perhaps it hadn't been through the entire corporate governance process (or any of it), but it was pushed out and implemented anyway. People took the risk, because it was necessary, and it paid off big time.
And lastly, in a truly digital culture, we promote collaboration at all levels and not individual effort. Cross-functional working is the norm, and to facilitate, companies rapidly rolled out collaboration and productivity tools such as Office365, Microsoft Teams, Slack, Skype, and others.
Recent Willis Towers Watson research found that 90% of companies believe their culture has improved, 83% believe their employee experience is better, and 84% believe employee engagement has gone up. This is underpinned by 76%, believing that overall company collaboration has significantly improved.
The future of Digital Transformation.
So amidst all of the bad news, the tragedies and the long-term economic issues caused by the COVID-19 crisis, there are some incredible stories of success and signs that if nothing else, we have now paved the way for real, lasting digital transformation. Leaders now understand how and what is required. They know that they can trust their employees to deliver, even in times as tough as these. However, this can only succeed when they are led from the front with a clear mandate and strategy. But also that their employees need to be empowered to do so. Similarly, people across the business world know that change is inevitable. When a change is real, and profound, and wholly necessary for the survival of the organisation then it's time to get on board, dig deep and be a part of something special.