Making the most of the digital turn with Change Management (II)

“If a company’s leaders are taking a technology view of digital transformation, they are doing it wrong.” George Westerman, MIT researcher and co-author of Leading Digital.

In our previous article, we set out to explain how the digital turn disrupted the global economic landscape and why it is urgent to jump into the bandwagon or risk losing to smaller and highly reactive entities. Digitalization is a long and above all holistic process. It takes a deep-seated reform that goes beyond technology to embrace new working routines and business culture. At stake is customer experience excellence. In this second instalment, we tell you how to play your cards right.

Key factor 1: Leadership and vision

Hiring a Chief Digital Officer “won’t fix it”. Nor can a single person bear the weight of transformation, be (s)he the CIO, Marketing or IT Director. If the Board of Directors is not fully committed and somewhat “digitally literate”, the process is bound to fail. With plenty of digital champions such as Dorsey (Twitter), Sandberg (Facebook) or Jobs (Apple) on its board at some point in time, Disney is a classic example of best practice. Think of the 5 generations now sharing the same business space, but distributed unevenly across the decision-making spectrum. The knowledge gap is the widest between baby boomers at the organizational top and millennials (Generation Y) or digital natives at entry or mid-level jobs. Not only is filling this gap crucial but having a strong vision is also instrumental to retaining a workforce in search of meaning - as Generation Y is known for. A robust sponsorship has consistently proved to be the top key success factor of any change initiative. In short, a sponsor must be active (A) and visible, build (B) a solid coalition to set a clear course and communicate (C) with employees. Knowing and respecting the ABC of sponsorship (© PROSCI) will go a long way towards turning your vision into reality.

Key Factor 2: Mindset and Behaviors

By transforming mindset and behaviors, we basically mean working simultaneously on three pillars. First comes the development of a culture of innovation. Attached to it is the ability to quickly act on ideas without injecting massive amounts of money into test-driving a “full-fledged” product. Creating a less risk-averse culture, failing often and cheap (and rapidly taking corrective actions) will definitely help set your organization on the right path. Because it encourages everyone in the workplace to put an innovation forward, Toyota is a vivid example of this. Out of the millions of proposals received, 2500 are said be implemented each day. Agility is the core competency intrinsic to this type of culture. It requires working on iterative pieces and quick deliverables, in a silo-less environment. Coupled with a culture of innovation, it speeds up the closed loop “test, fail and learn”, thereby reducing the impact of failures or missed attempts[1].  Case in point, Carrefour which got the idea of an “Amazon Go” two years ahead. Unfortunately, as changes kept piling up within the company, executives focused on potential shortcomings instead of implementation. Execution is everything and without the winning combo i.e. innovation/agility, ideas might well remain an empty promise.

The third pillar is customer-centricity. Not surprisingly, most of the top business giants[2] are ecosystem players sharing a business model firmly based on their customer needs. What it all comes down to in the end is customizing offers to your clients’ personal preferences, history and behavior (think mobile and simplicity!). Think of it this way. Was the taxi business really killed by Uber? Or is it that limited access and fare control pretty much hastened the downfall of previous models? The same thing happened to retailers who took a major hit following Amazon’s simple and efficient response to poor customer service and experience. Netflix, Uber, Apple … all tell plenty of similar stories. Technology by itself was not the disruptor, but much rather the fact that customers were pretty much ignored or poorly understood.

Key Factor 3: Process and Capabilities.

From a technical standpoint, silos create a poor experience as touchpoints multiply (email, chat, social media, calls), generating friction … and frustration. All interactions should be centralized and easily tracked. That is why digitalization is not a matter of implementing a new tool, but of rethinking and rearticulating processes in ways that they all connect to one single interface or platform. Digitalization is not a change that can be outsourced. It is best managed when everyone is in the loop and, needless to say, knowledgeable and sufficiently equipped to make use of whatever is being implemented. You cannot expect any long-term results without building internal capabilities. Of course Millennials can be of great help but, as we have said, hiring an army of them won’t solve the problem if other key factors are disregarded, starting with a clear vision upheld and pushed by digitally aware sponsors.

All in all, “digitalization” does not happen overnight, which is only logical given the number of domains it spans and above all, because people change at a slow pace. The key takeaway is that people are the cornerstones on which digital change is built. Each and every buzzword attached to digitalization you can think of should not distract your attention from the real challenge. After all, AI, big data and the likes are only the tip of the iceberg (see graph below). Its hidden part, as discussed throughout this post, is where time and energy should be thrown into.