Digital Tranformations on the Brink

15 ways to salvage a troubled digital transformation

Digital journeys are rife with hurdles and setbacks. From reorganizing the ranks to insisting on value, here’s how to reboot a digital initiative gone awry.

Robert F. Kennedy once said, “Only those who dare to fail greatly can ever achieve greatly,” which may bring some comfort to IT leaders when it comes to digital transformations that stumble.

The reasons why digital initiatives fail are well documented. They include underestimating the complexity of the initiative or lacking consensus on what digital transformation really means. Often officials realize that while they’re busy transforming they still have to run a business, and sometimes, the initiative ends up taking a back seat, says Marty Boos, CIO of event ticket marketplace StubHub.

“What happens fairly regularly is the amount of effort is underestimated and the time to get to ROI is underestimated,” Boos says, adding that once you get started on an initiative, “the marketplace changes slightly or some assumptions you made going into the project turn out to be not completely accurate.”

With any transformation, projects get mired in the fear of the unknown, risk aversion and a misunderstanding of what digital offers, says Rick McNabb, chairman and CEO of consultancy Optimity Advisors. A strategy is set and then maybe IT delivers on 60 percent of what was promised. “So we don’t put the right strategy out there and we don’t deliver on the strategy we intend to deliver,’’ he says.

When that happens, it’s time for a reboot. Here are 15 ways to salvage troubled digital initiatives.

Recommit to rolling up your sleeves

Sometimes, in their enthusiasm to transform quickly, companies forget their mission or change their focus. This can especially be an issue when outside vendors get involved.

“If you listen to vendors, they’re trying to sell products and will make everything sound easy. Usually [digital initiatives are] much harder than scoped,” says Boos. “It takes highly qualified software engineers and product managers to build and transform your stack into something your customers are asking for.”

Retake the lead

Risk-averse, bureaucratic processes and mind-sets can stop a transformation dead in its tracks. To succeed at digital transformation, you have to be willing to get out in front.

McNabb recalls working with a large financial planning firm that acknowledged it was a “laggard” in the market. Firm officials were afraid to implement new technologies until they saw their peers using them. “By the time you see [the need to transform] and clean up your house and get it in order, the train has left the station,’’ he says. “You won’t have the luxury of time in this new economy because there’s too many non-traditional disruptors out there.”

Keep your users in mind

Transformations can be significantly disruptive for customers, employees and end users alike. Beware the impact of change or your initiative may suffer consequences.

“You have to understand how people utilize technology and the day-in and day-out tasks that have been put on them to learn a new digital process,” says Ari Lightman, a digital media and marketing professor at Carnegie-Mellon University. “You have to actually give them time to understand the technology and utilize it and understand the value proposition for it and that’s difficult.”

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Often, an organization drops technology on an employee’s lap without helping them understand utilization and incentivization patterns. That leads to resentment, and ultimately, the technology doesn’t get used.

Move data out of silos

People often look at a digital initiative as a point-specific problem, and when that happens, data silos are created and stored within a specific group, notes Lightman. The group may put accesses and permissions around the silo, and they may create data marts with structures around the database. While this might be good for that particular group, others may not have access — meaning the data can’t be integrated into other processes.

“There may be similar initiatives going on around the organization, and now you have two discrete digital initiatives that can’t speak and learn from each other,’’ he says. “Digital transformation needs to be a strategic company perspective,’’ and if data resides within a group and others can’t access it, “you can’t add value holistically around the organization.”

This can lead to inefficiencies because data can get re-created and then you don’t know where the truth lies, he says. Instead, teams need to share data in a common repository. Otherwise, “you risk redundancies and you risk not having all the information you need to get the most value out of that relationship,’’ Lightman says.

Beware the technology trap

While technology is at the heart of any successful transformation, it may be easy to lose sight of the big picture and instead focus too closely on the technology itself.

Fear, risk aversion and a lack of change management can also put a project in significant jeopardy, says McNabb. “I have consistently run into this” and the “intensity” has increased with the move to digital, he says. “We have fears of failure and the unknown and we don’t mitigate those risks accordingly. A lot of people are afraid to talk about this stuff.”

Transformation initiatives should not be viewed only as tech-enablement projects, and they shouldn’t just fall on IT, he adds.  “CEOs think digital is strictly tech-enablement and they take a narrow view and say, ‘It’s the IT guys’ responsibility.’ You can’t take just an IT view. The ecosystem needs to be broader.”

That sentiment is shared by George Westerman, principal research scientist with the MIT Initiative on the Digital Economy. He says that focusing on the technology can direct aspirations toward what technology can do (e.g., mobile, big data and virtual reality) rather than what a transformed business should look like.

Know the problem

Getting initiatives back on track first requires a thorough understanding of the problem, whatever it might be. Here, digital KPIs can help.

“We have found that one of the key mistakes made is that the wrong KPIs are used to track initiatives in the early stages of their growth, before product/market fit has been determined,’’ says Ben Ninio, head of digital at global agriculture firm Syngenta.

“We use a process of innovation accounting to articulate the right KPIs before starting an initiative, which helps to quickly highlight problems when they arise,” Ninio says.

Having a well-defined problem makes it easy for his team to find creative ways to work through the challenge, he adds.

Rebalance your vision

It’s important to think of your digital strategy as a living document that you refresh every six months, McNabb says. “Most of the people I deal with in an agile world make things very small. They’re turning left one week and going right the next.” But it’s good to have both short- and long-term timelines, he adds.

“People who do weekly sprints wander all over the place and lose what they were trying to do long-term, and that wastes capital dollars,’’ McNabb says. “People doing a long-term vision with a short-term view get there. You may change your pattern, but at least you’re using efficient resources to get there.”

Readjust timelines and budgets

Rather than killing digital initiatives altogether, StubHub’s Boos says he hears from his peers that typically they do “some kind of reset on their timeline and a reset on the budget required to get it done.” In some cases, a reset means taking a step back and asking, “Is what we set out to build what we still need?”

Projects with timelines two to three years out rarely remain stagnant, so cutting up the project into chunks that can actually deliver value is a better approach than looking for the big bang after three years. “So we deliver something of value after six months so the business is not waiting. That was the perfect solution three years ago — but it may not be by time you get there,” Boos says.

Insist on value

As much as organizations should “insist on faster delivery of features,” they should also “demand some kind of solid evidence that each new piece is contributing value,” says Westerman. “Agility works when you examine the impact of each new release. Simply having friendly testers say they like it is not good evidence of whether normal customers will like it.” 

Reorganize the ranks

The digital era has ushered in multiple new C-level titles, says Lightman, and the resulting organizational complexity can impact digital strategies.

“Because we have all these new digital-focused leaders within an organization, education needs to be done to think through all these different permutations and initiatives,” Lightman says. Data scientists tend to talk in jargon, he adds; they’ll discuss their models and get very excited — but typically, no one understands what they’re saying.

“We tend to complicate things. There’s all these interesting opportunities to go after and data can help tell them what might be important for them today, in the near term or what, from an analytics perspective they should go after,’’ Lightman says. “But unless they simplify the organizational structure it’s going to be near impossible for them to do [digital initiatives] in an agile fashion.”

Visualize success

To help get a digital initiative back on track, talk about the application of networks, ecosystems and platforms to solve problems, advises McNabb. Utilize design thinking — creative materials and prototypes that can help people visualize how to build something better. “You get not only a higher quality product, but more people have bought into it visually,’’ he says.

Lightman believes in the hypothesis that if you engage with the data, you cognitively process what’s happening better and there is context around it; something he calls “digital storytelling.”

Call in outside help

When your transformation is stalling, it may be time for fresh blood — or at least a fresh perspective. Here, Boos believes “an infusion of new talent in the form of contractors” is a good strategy.

McNabb agrees, adding that once education has been performed at all levels of the organization on why the project should be brought back to life, it’s worthwhile to bring in outside help. “You have to use outside DNA to be overly effective. You can’t innovate in your four walls. You need to bring in new stakeholders to think out of the box,” he says.

This is especially true when something has gone wrong and you’ve already spent lots of capital on the transformation. Then it’s time to have a third-party auditor do diagnostics and an objective review, says McNabb. “You need an outside person to have the courage and non-political viewpoint to say those things. That’s true of any transformation.”

Let innovators innovate

Sometimes outside help comes in the form of an acquisition. Here, it’s essential to manage expectations, or you might get derailed. That’s what StubHub learned when it purchased a much smaller company to help give professional sellers in StubHub’s marketplace the ability to post and manage their inventory on competitors’ platforms as well, Boos says.

The staff of about 60 from the new company was integrated into StubHub’s existing staff of about 600. “We started bringing to them our processes around testing and change control and product roadmaps,” Boos recalls. “What we found was, we took a team that was very nimble and able to work very fast, and we were burdening them with a bunch of processes that got in way.”

That slowed down the new team, which wasn’t adept at having to go through different product design iterations. As a small startup, the staff preferred to “make a decision in the morning and start coding in the afternoon.”

“The velocity by which they could build new features was slowing down,” Boos says, “so we knew we were crippling them by adding a lot of processes into their organization.”

One of the many changes Boos says they made was not treating the new staff “like part of a 600-person company” and giving them autonomy so they could stay “small and nimble.”

He adds that, “We knew they knew their business better than us at headquarters, so [we said,] ‘Tell us where you need help and where we can do better.’”

Get real

With so much at stake, digital transformations should be ambitious — but not overly so. If you’re trying to do too much, it may be time to reassess what’s feasible for your organizations.

“Quit trying to be everything to everybody and try to reinvent yourself in possible ways,” McNabb says. “Look at how IBM has radically recreated itself with Watson AI.”

Know when to pull the plug

Sometimes a struggling project can become an unshakeable albatross. The outcome and even the strategy can sound great in the boardroom, but seemingly doomed in execution. Here, you might need to do something radical or pull the plug, Westerman says.

“Partner with the right part of the business,” he says, and if that’s not doable, “kill the project.”

Copyright © 2018 IDG Communications, Inc.

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