Developing and implementing effective digital transformation strategies is becoming more and more imperative not only for growth but also for survival in many industries. If your organization does not become capable of fully leveraging the opportunities offered by new data technologies in innovative ways, your competitors will. Also, new competitors will emerge with the ability to readily adopt new technologies. Where relevant, this is being largely realized by executives who are making digital transformation strategies a corporate priority. However, to what extent are their approaches helpful or actually detrimental to the progress of their organizations?
Throughout my experience in the energy industry, which is pretty data intensive, I have noticed that the technology-driven transformations can easily be derailed by the same strategies that aim to support them. Some of these pitfalls can be more tragic than others of course but some combination of two or more typically collide to reinforce the natural resistance to change. Here the top four I’ve observed over the years:
- Communicating the digital transformation as an end rather than a means. Introducing digital transformations as a vision for the future can actually be pretty confusing. A digital transformation strategy is actually a means to develop the ability to quickly leverage state-of-the-art data technologies to realize an already well articulated commercial vision. Through time, this is becoming more of a must-have than a differentiator. Clarifying the specific objectives of the transformation is the first step towards success. Are the new technologies and the data they avail going to offer more insight into clients and/or competitors? Are they going to improve the quality of the offering or enable the development of new offerings? Otherwise, if the ongoing global technological revolution calls for an overall vision revisit, that should be well articulated. Otherwise, eyes should still be kept on the prize!
- Getting overly excited about solutions before defining the problem. Let’s admit it. Most, if not all, executives are not necessarily the most tech savvy in their organizations. A leader, however, may get extremely excited about the opportunities made possible by a specific concept like Big Data, Analytics, the Internet of Things (IOT), Artificial Intelligence (AI), Machine Learning, the Cloud, etc. And if a leader constantly raves about specific solutions, these may end up being perceived as the desired answer regardless of the question. Going back to your vision as a leader, it’s best if your guidance focuses on where you think technology can be helpful. And trust your organization to identify and implement the suitable solution because before I finish writing this some even more exciting concept, technology, or application will have emerged!
- Creating an unintended parallel organization. Investing in and empowering a highly talented technology team to migrate systems and data to new platforms is critical. But, if operations, subject matter experts, sales and marketing teams aren’t all fully engaged in the journey, the desired holistic shift could easily be slowed down or miss its business goals. Old systems and approaches may remain a mystery to the technology team, negatively affecting efficiency, quality, and, as a result, brand. Employee engagement and client centrism are significant ingredients for successful digital transformations. This requires a well formulated strategy for securing buy-in and establishing a sense of partnership among stakeholders.
- Isolating innovation as an independent business function. Allocating a department or function to innovation can be useful at a time when technology is evolving faster than we can figure out what to do with it. But it can signal that the rest of the organization has no business being innovative. Also, innovative efforts across the organization that go unnoticed can be a huge demotivator. Adopting an innovative culture that engenders creativity, on the other hand, will have positive impacts on the pace as well as the benefits of the digital transformation.
As the digital revolution unfolds, leaders are challenged with having to develop and implement transformation strategies while learning from their own mistakes. The importance of dynamically understanding and managing the wholesale cultural and commercial implications of this transformation can not be overstated.