The Digital Transformation Series – Part 6 – Three factors for transformation success

A transcript of a video, the final part from the Digital Transformation series, produced in partnership with the Business Transformation Network. The video is here.

Introduction

Hello I’m Chris Micklethwaite, I’m founder and principal consultant at 3pointsDIGITAL. I’ve spent my career in technology, working with web and customer-facing technologies, and using technology to help find efficiencies in business, and that help people collaborate and work better together.

What I’ve learnt from the businesses I’ve worked with is that technology alone can’t make a change in an organisation; to use technology effectively to help people to become more productive, and for an organisation to better connect with the customer requires fundamental changes in people, skills, structure, approach and culture. I founded 3pointsDIGITAL to help businesses of all types tackle these challenges, and the challenges and opportunities from balancing three points of a triangle: Customer, Business and Technology.

In this series of videos we will to explore this type of technology and the permanent changes required in an organisation to adopt, use and generate benefit from it, which in short is called digital transformation.

We’re going to talk about digital disruption, what characterises digital native businesses and what we can learn from them, and how to create a digital strategy and embed change in your business.

What are the top 3 factors of a successful digital transformation?

Yes, I think there are three things.

One is board support. The entire c-level needs to understand the opportunity in technology and digital, and if they’re not already feeling the threat [of disruption] and the competitive pressure, then at least understand it’s coming. [They] need to support digital initiatives, technology led change, and technology creatives in the organisation… understanding that they are your new competitive advantage.

And that leads me very neatly into the second point which is, ironically, in the digital world, people and skills have never been more important. So having the right skills for what you’re trying to do, having people that understand the technologies, having people that understand the customer and what the customer wants and needs, and how to meet those needs, and solve those problems in technology.  It’s also true for the business teams, operational teams, and frontline teams; what they want and need, and how that can be met too. So having teams that exist in that triangle of understanding, three points of customer, business and technology. So people, skills, and an understanding is the second point.

I think the third thing that’s really vital, is the approach. Traditionally, most businesses are run with a project-led approach and a business case led approach. And the problem with that is short-termism, usually it’s driven by some kind of prediction of the future. By creating a business case to deliver and invest in a set of technologies or a platform, with preconceived ideas about what the solution might be, what the features and functionality should be, and usually it leads to a large request for investment predicated on those assumptions. Those assumptions of specification, benefit, timescale and cost, then lead the teams into a situation of managing and measuring everything against cost and risk of delivery. This means you’re unable to capitalise on technology opportunity as it presents itself, it ignores the fact that software development is an extremely complex and uncertain undertaking, in a complex an uncertain environment, it attempts to predict the future by saying a team that costs X is able to deliver Y within a certain timeframe. How can you possibly know that? There will always be problems in technology delivery, and the best way to setup for success is to be able to find opportunity in those problems.

Project and business case led approaches also tend to lead to a situation where senior execs get in a room and have a discussion about what should be delivered, how it should work and how much it’s going to cost. There is so much wrong with that. The flip side to that – and the better approach in my view – is a product-led approach where you treat your software as products and services (and in fact in the digital world products and services can exist exclusively in software). The examples of digital businesses I refer to – Uber, Spotify, AirBnB, you know by now! – that’s exactly how they operate, they treat their mobile applications and websites, and the features within them, as products – they have a lifecycle, they develop, they improve, they provide value and generate income.

If you are taking a product-led approach you are taking a value-led approach (vs cost and risk in a project-led approach) – you are giving something to a customer or user that will deliver value – which you will measure – and you will ask them if it’s delivering value – if it solves a problem or makes their lives easier. If it does, you will do more of that, and build on that. So this idea of iterative and incremental delivery of software becomes a very powerful concept. The way to do that, is with stable development teams, who can take the next best idea, the next highest priority, the thing that will deliver the most value, and deliver it in the shortest time.

That’s the product-led approach which delivers value early and often, versus the project-led approach which makes a whole load of preconceived assumptions and quite often ends in disaster.