I truly believe that there has never been a more exciting time to be in business. The promise of digital transformation is inspiring … and staggering. But when commitments to digital capability development are balanced against basic financial performance objectives, digital transformation initiatives can stall or worse, fail.
A recent HBR article took a closer look at the reasons why many high-profile digital transformation initiatives fail. I believe there are some valuable lessons that can be learned from the digital stumbles experienced by industry giants like GE, Proctor & Gamble, Nike, and Ford that can guide the rest of us down a more direct and thoughtful path towards digital success.
Lesson 1: Don’t put all your eggs (investments) into one digital basket
There is no doubt that digital is promising and inspiring, leading to an upswing in shareholder investment. But companies must focus on balancing their portfolios, aligning them with strategy to ensure the right mix of programs, projects, and products to hit the mark. And that includes funding a mix of these exciting digital transformation initiatives, as well as the less-sexy cash cow products and cost-cutting measures.
The spirit of going “all in” with digital can invigorate an organization and the street. With jaw-dropping statistics from warning that strategic initiatives fail 50 percent of the time, consider mitigating risk by performing continuous strategic planning across the organization to ensure people and money are applied to the valuable initiatives.
Lesson 2: Visibility is the key to the long game of digital transformation
Going digital is not a “one and done” item on your executive check list. This is a lifestyle change for your organization. “Digital transformation is an ongoing process of changing the way you do business . . . that requires foundational investments … as well as continuous monitoring and interventions.”
But how? Given the organizational breadth and depth that digital transformation touches, decision makers need a single view that breaks down each digital transformation initiative into the things that actually need to get done to deliver on the promise of digital transformation. You can’t leave it to siloed champions separated by departments, divisions, brands, geographies, and competing objectives. Digital transformation requires cross-functional visibility up, down, and across the company to identify dependencies, efficiencies, opportunities, and potential risks before they threaten to torpedo company performance. To be able to pivot quickly, winning companies leverage an enterprise-wide software to help everyone understand the investments necessary to achieve the outcomes defined. Once leaders can see the bigger picture outside of their particular silos, they can coordinate across lines of business, brands, regions, and departments, to bridge gap between strategy and delivery.
Lesson 3: Digital transformation is an inside job
Establishing a digital governance discipline is key. This means knowing how much of your portfolio you want to invest in digital. It means knowing the difference between digitization, digitalization, and digital transformation. It means searching your company DNA for the core capabilities that will best serve your customers and your bottom line. And it means having a repeatable execution process that can turn these innovative, digital ideas into sustainable benefit realization.
Lesson 4: Use digital to drive digital
It’s no secret that many organizations make decisions based on “gut feel” and approve program funding based on the leader championing the effort. While the human factor is crucial, there is a better way to leverage technology to help make fact-based tradeoff decisions in your digital transformation portfolio and not be dazzled by the shiny.
If you really want digital initiatives to thrive, use digital to guide your decisions. Adopt industry best practices around work and resource management, especially in the form of enterprise-wide dashboard reporting. For digital initiatives, work and resource management (WRM) can give executives an end-to-end view, unifying a broad set of domains to break down organizational silos, bring teams together, and accelerate the delivery process.
The key to your digital transformation is delivering better customer experiences that drive sustainable competitive advantage. To shift from being a project- or product-centric organization to a customer-centric organization, change is required in every department of the company. Make the change and you’ll be able to deliver the most innovative, differentiated products, services, and experiences to market faster than the competition.
A successful transformation starts with your vision and includes continuous planning, visibility across organizational siloes, digital governance discipline, and a work and resource management approach.
If you recognize your organization in some of these high-profile failures, it’s time to rewire your initiatives with smart work and resource management solutions that make the difference between falling behind or leading the pack in this connected, digital world.