Digital transformation! Really?
Are you still talking about digital transformation and digitization? Aren’t we past this point and isn’t digital omnipresent and thus a done topic?
After a stint at Roland Berger, Jochem Wesling recently rejoined Accenture as Managing Director. In his new role, he supports multinational clients in their global and large-scale digital transformation programmes by introducing strategies, environments, ways of working, technologies and corresponding operating models. The following guest post outlines three shifts he sees as inevitable.
We have been talking about digital transformation for the past decade. Yet, it still feels like we are stuck with too little to show for all that discussion. Too many initiatives have come and gone without real impact or relevance for our core business. And, if that lack of progress wasn’t enough, we see new trends popping up ever faster.
As a result, we’re falling further behind.
And then there are buzzy innovations like AI, cloud or quantum computing that we cannot afford to miss out on. We’re competing against massively diverse and successful digital companies that seem to have less dead weight to carry and that are taking advantage of the innovations and other digital core capabilities in a more agile and flexible way. This pressure is then topped off with our human responsibility to care about climate change, global health, fair trade and sustainability. After all, our customers and employees will decide our future by their choices about whom they want to do business with, or work for.
All these challenges lead to one, unavoidable perception: the one of feeling trapped in an era of digital transformation.
I rather believe that the answer lies in taking to heart the insight of Heraclitus:
“The only constant in life is change.”
Taking the lead for digital transformation
But for turning it to the positive, we need to fix a few things that badly need correction and adjustment.
One: most enterprises see digitisation as an essential discipline. It’s something that they need to add to daily operations to make them better and more customer-oriented. But too many companies see digital as a band-aid only. To them, it’s something to stop bleeding sales to the competition or to satisfy the ever more demanding client or employee. This approach is doomed to fail. It misses the reasons behind the drive for change. In addition, digital transformation is often the subject of siloed initiatives without wider purpose and strategy and thus, standalone.
Two: most strategy consulting firms address the issues of transformational need with their well-established approach of:
“flying in, generating data points, putting them into perspective, deriving advice which is put into a PowerPoint and flying out again”.
Combine this with a lack of empathy for the need for change and a missing depth of knowledge regarding the core digital disciplines, and you get another frustrating experience. This is the absolute opposite of the much-needed – and appreciated – injection of best practices and outside-in perspectives.
The solution? CEOs must take the lead on a full corporate-wide transformation strategy. And so we, as strategy consulting firms, need to transition our services towards an advocated consulting approach. We need to make ourselves a trusted sparring partner for the long run, instead of the in-and-out safeguard during times of crisis.
The solution, in detail:
We’ve seen a decade of chief digital officers and billion-dollar investments into digital. We’ve witnessed revolutionary developments in the areas of commerce, mobile, big data, computing power, customer centricity, social media, AI, automation and machine to machine learning. After all this, we are well beyond the point of discussing the question of why to transform. Explaining what has become obvious is pointless. Thus, we can stop going to market with offerings that explain to the CEOs what they already know. They don’t need lecturing on the “why” and the “what”. Instead, maybe they need some direction on the “how”. Perhaps some help on keeping transformation close to the core business, too. This assures that the value-add they expect and need really emerges.
So, if we want to be of value and benefit in the consulting relationship, we need to have an impact. Relevance to the top line, regarding new growth areas or a strengthened, more customer-centric product and service development pipeline are good examples. We also need to provide more impact on the bottom line, securing that standardisation and harmonisation of century-old processes and ways of working lead to more flexibility, efficiency and robustness, and as a result to reduced costs.
For this to work, three main shifts are inevitable.
1. Strategy consulting shifts toward advocated consulting
We need a clear shift towards a collaborative partnership and co-creation for change, creating innovative and new ways of working. The willingness to change cannot end with the C-Suite. Thus, rigorous change and transformation management needs to address the dilution of transformation that often occurs within different business departments. This can be lead by a dedicated transformation management office that reports directly to the CEO.
Digitalisation needs to serve the core of what we do. Consequently, it needs to strengthen our core business. Because of this, it just cannot be a side-line topic or outsourced into a form of innovation lab. No more “speedboat” or “lighthouse” programs without a clear value proposition. To achieve this, corporations need rigour and a strategic approach for becoming transformation-led companies. That allows them to deliver all strategic initiatives via a connected, ongoing and holistic approach.
2. Merge the strategies, into one enterprise strategy
The three siloed and sometimes even contradicting strategies (Corporate, IT and Digital/Experience Strategy) need to be melted into one overarching enterprise strategy. This includes all disciplines for the three focus areas such as:
- Decisions are based on strong, reliable and available data – transparent, in real-time, across all aspects of the business including all customer and market-related data points
- Culture, modern methodologies and ways of working are not just buzz words but become the core of the change
- Diversity is not about a female quota but about a true diverse and open culture, embracing differences and understanding the strength of it
- Work-life balance increases efficiency and quality by leveraging a healthier and more fun-to-work-in environment
- Purposefulness and the “so what?” / “why are we doing things?” questions are answered by everything we do.
- Technology is the powerful enabler for all business needs
- The new digital core restructures and optimizes legacy systems towards robustness and flexibility
- Solutions follow processes that follow capabilities that set us apart from the competition
- Staying flexible and agile is the basis for being robust and customer-oriented at all times
- Use the best-in-class tools and build upon data
- Always delight and be of true relevance to your customer – interlock this mindset with the purposeful mindset of the organization
- Design products and services that add value and make life a bit better
- Close the loop back to the organization and structures as you do so
Don’t forget: as Simon Sinek already quite rightly said, all inspiring leaders of the world think, act and communicate in the same way. They inspire the world and their customers by putting the why – the purpose, cause and the belief of why they do things – first:
“With everything we do, we believe to make a difference”.
This is how you connect with your customers. Make sure that the digital transformation is not happening in one division or is led by one initiative only. Install a full-range digital integration approach across the organisation. Leverage technology as an enabler, putting the customer experience and delight at the heart of all you do. Make continuous improvement and transformational change the core of your corporate strategy.
3. And last but not least – the switch towards the new “digital”
The new drivers of business for the decade to come are sustainability and ecological and social significance. Because of this, you need to embrace the customers’ demand for relevant and value-adding services and products that are in balance with both humanity and nature. This can only go hand-in-hand with carbon neutrality, less waste, more recycling, better production and working conditions and a healthier balance between work and life. Again, all topics can be massively supported via digital capabilities and technology as long as they are embedded into the change agenda and core values to start with.
As a result, you need to set up your organisation in a way that it will be able to adapt in all these different areas in a continuous and resilient way. Don’t opt for a one-time restructuring but, instead, choose a continuous and regular movement towards change and the new. If you manage to establish such a culture from the inside, you won’t need the regular reset, restructuring and performance improvement injections from outside.
I know – this is a true leadership challenge, especially in a world driven by EBIT KPIs, shareholder value mindset and classical profit orientation. But I am confident that by actively embracing these new concepts, setting new KPIs and managing the transformation agenda according to a new set of values – integrated, combined and serving – change for the better will prevail.
We are not trapped in an era of digital transformation. We are mastering the challenges of continuous transformation, constantly living by the rule of “let there be change”!