5 things you need to know about digital transformation

5 things you need to know about digital transformation

My colleague Jarco and I represented iCapps at the Digital Transformation Forum. The event took place on the 27th floor of The Hotel. With the inspiring view over Brussels, came inspiring talks about the challenges, opportunities and the impact of digital transformation for companies. Twelve speakers, who represented Belgian companies of all sizes and industries, shared their experiences and struggles.

We learned that technology is not the difficult part, leadership is. Your digital vision needs to be embedded in your employee’s souls. They can create useful products for your customers when they focus on user experience. Not convinced? Read how we learned that...

 

1. Digital leadership is key, not technology

Many people seem to think that it’s all about technology. But it is not. According to Jo Caudron, author of the book Digital Transformation, it is not a technology challenge. He claims technology is the easy part. Changing how people operate however, that is the difficult part. That makes Digital Transformation more of a management & people challenge. This implies that a successful Digital Transformation requires digital leadership. You’ll need someone to manage this transformation. Someone who draws up a vision for the future, and someone who develops a roadmap that will get you there.

The digital leader of a company understands what the impact of digital is on their business models. He doesn’t necessarily need to know and understand all the technical details. Many influential companies have appointed a digital leader as their CDO (Chief Digital Officer). These CDOs are constantly questioning the current business models and how these models can be adjusted to tackle future digital disruption waves.

 

2. Company-wide employee alignment is a must

The digital strategy of a company can only be effective when everyone within the company is involved, and not just a small group of converted natives. Tom De Ruyck from InSites referred to a US study that found that “only 13% of the employees in the average company is passionate enough to change/get the company forward". This number has to go up!

So, how can you achieve this? A sensible way to start, is by giving employees information on the company strategy, but also on its customers. When every employee can identify himself with the customers, they know how to serve their needs. This will lead to better decisions on future products and services, that are aligned with the company’s strategy.

Secondly, it is important to give employees responsibility and the freedom to make decisions (For managers: Let it go!). When self-managing teams are empowered to do what they think is right for the company, they are more motivated and more involved. It’s also important to have diverse teams consisting of business/technical employees, juniors/seniors, and people with different expertise.

The digital strategy of your company should be top of mind for everyone, every single day. Tom used Newton's First Law of Motion as a metaphor: A body that is in motion wants to stay in motion. A body in rest wants to stay in rest. So persist. Keep on going. And most of all, keep the company in motion!

 

3. The company structure will (probably) have to change

Traditional organisations are built on hierarchical structures, in which decisions have to be approved by multiple committees. This takes time. A lot of time. In a digital world that is rapidly changing, time is of the essence. Thus, for faster decision-making, the organisational structure has to be flattened. Less talking, more doing.

Take Bolero for example, Bart Vanhaeren, CEO of Bolero, explained how they focused on being the first to launch an Apple Watch app (iCapps played a crucial role in getting the app developed in time). Bart didn’t have approval yet, but he went along anyway, there was just no time to wait for a sign from above.

Jo Caudron proposes to go for small teams, pitches, spin-offs within a larger company. He mentioned Adobe Kickbox, a box filled with a $1.000 pre-paid credit card, instructions, innovation tools, caffeine and sugar. Any employee can get one, and do whatever they think is needed to improve the lives of their customers and move the company forward. This way they explore lots of potential ideas, and mini-startups form within the company.

But it is not all about money. Having a budget is nice, but Jo warns that these teams also need a licence to change. Sometimes a new project cannibalises part of the existing business, but don’t let that be a reason to drop that project, on the contrary. If you don’t change your own business models, someone outside of your company will do so, which may cause your company to fail. Think of some big companies like Nokia, Kodak… who failed to get off their cash cows and innovate. Where do they stand now?

You need to have the guts to take risks. Don’t focus too much on KPIs. Don’t be afraid to fail! Failing means that you are trying, and the knowledge you gain by doing so is priceless. Not every story has/will have a happy ending. In some sectors, margins will go down, as explained by Truvo’s Marketing Manager Wim Vermeulen. It is better to have a shrinking company, than a company that is disappearing completely.

Or as Andrew McAfee formulates it: “We have to protect the future from the forces of the past”. So don’t hesitate to change something, even when it endangers jobs that were created in the past.

 

4. You'll have to ge tout if your comfort zone

It is possible that your next business unit won’t be a part of your traditional market. You need to look further than what you are comfortable with. Explore new markets, new partnerships and look for opportunities outside the company's traditional market, Wim Decraene explained. Take Visa for example, who collaborated with car manufacturers to allow drivers to store their payment information in their car. This enabled car drivers to pay for something, like a pizza, with their car.

Another example is General Electric. GE entered a new market of selling predictive maintenance software for connected turbines, something they had very little expertise in. By doing so, GE made itself a structural part of the future. Also, Wim Decreane explained not to be reluctant to take advantage of the existing network of the company, such as GE did by selling its predictive maintenance software to customers in its existing network.

 

5. You need to focus on the User experience

If you want to know where your company should be heading in the digital future, just ask your clients! Your clients are the users of your products and/or services, so they should steer the innovation process and make sure you are on the right track.

In the digital age, not everything is digital. So don't focus solely on building apps and the likes. The customer journey is about more than just digital interactions. In the old days, the only way for a customer to reach out to a company was by phone, during office hours. Even though digital communication makes 24/7 communication possible, 75% of all people still prefer personal interactions. Bolero, for example, organises events, business trips and 1-on-1 meetings to maintain a certain level of personal interaction with their clients.

At iCapps, our Concept & Design team involves users through interviews, workshops and other sessions to define user journeys and customer needs. By involving users early on, and not just at the stage of user testing, we get instant feedback that tells us whether or not we are on the right track. This is where Google's Pretotyping-Principle comes in: "Make sure you are building the right 'it', before you build it right".

If you want to discuss how to make your company more digital, you are always welcome for a hot cup of coffee.