The Success or Failure of Digital Transformation is down to organizational culture, values and structure

Digital TransformationI recently had the opportunity to witness a high-powered CIO panel on the sidelines of an event that I was attending. These leaders represented the who’s who of the traditional and well-established industries. It was very clear to me that all of them were thought leaders and visionaries when it came to their business. They all knew what it takes from a technology perspective to digitally transform their organization, but their problem was not lack of knowledge or even remotely related to budget, it was something more fundamental and it had to do with people, culture and org structure. In contrast, if you look at the new age Digital Disruptors their starting point and competitive advantage is their customer experience built on a solid technology stack and data. There is a statistic floating around that states that 80 plus percentage of traditional companies fail at Digital Transformation and to me its super clear if you don’t address the people and structure challenges then you are bound to fail. Here are some pertinent questions one needs to ask.

Does your organization value data?

In my research on how the organization’s value data, I came across this excellent quote from Douglas Laney, Technology Analyst at Gartner.  “It’s frustrating that companies have a better sense of the value of their office furniture than their information assets.” The potential business value of organizations data is clearly missed on the asset section of the balance sheet. One of the CIO’s in the panel pointed out that everyone in his organization wanted data, but no one knew what to do with it. Most of the organization data gets presented as insights in board meetings, sales meetings, marketing meetings but seldom anything is actioned on. Let’s just keep storing the data in perpetuity since most business stakeholders don’t think it costs us says the CIO. This mindset really needs to change from data being a byproduct, to it being the most important enabler of business. This must be driven right from the top, just like the CEO of GE, Jeff Immelt says “If you woke up as an industrial company today, you will wake up as a software and analytics company tomorrow.” No matter how you feel about your business, we are all data companies now.

Who owns Digital transformation? Who decides the technology Stack?

Successful companies have different iterations of this, but the one commonality across all these organization’s is that Digital Transformation is central to the business strategy. Digital Transformation cannot be viewed as a shiny new object that needs to be purchased or implemented for its novelty value. Digital Transformation has to be viewed as something that builds competitive advantage, drives revenue and profitability, helps retain and gain market share and new customers. Only when Digital Transformation is central to the organization strategy, then you have clarity and consistency in your choice of marketing technology that provides a consistent customer experience.

Finally, a hub and spoke solution to a Digital Transformation strategy is key, when frameworks and direction are set centrally, but implementation and a sense of ownership is right at the edge of the company. Because it’s only at the edge when the customer meets the brand and business experience.