Getting transformation right

With around two in every three digital transformation projects ultimately failing, how can companies contemplating such a move ensure they are part of the successful 30%?

Johannesburg, 04 May 2020
Read time 4min 00sec
Craig Mitchelmore, digital transformation specialist consultant, Mint Group
Craig Mitchelmore, digital transformation specialist consultant, Mint Group

Digital transformation may be seen by some as yet another industry buzzword, but the fact is that by 2022, global spending on digital transformation is expected to reach nearly $2 trillion. The size of the anticipated market is such that it is not surprising to learn that most enterprises are either busy with, or are at least considering, some form of digitisation strategy.

However, despite this significant move towards implementing digital transformation, a recent McKinsey report suggests that less than 30% of those companies undertaking such an approach will actually succeed.

According to Craig Mitchelmore, a digital transformation specialist consultant at Mint Group, so few succeed because they have not realised that the success of a digitisation strategy lies in the holistic broad view that needs to be taken when implementing such a strategy.

“A wide-angle view is vital, as the management and leadership team, along with the workforce, are simultaneously faced with the complexity of keeping the as-is business operating efficiently, while also having to formulate and shift to a digitally transformed state,” he says.

“Remember too that when it comes to digital transformation, it is not merely a ‘flip-the-switch’ scenario, where some magical and instantaneous outcome occurs. Instead, iterative changes are key to maintaining momentum, accompanied by supportive leadership.”

He adds that the iterative approach requires a design-led, agile mindset that can clearly grasp what the future digitally transformed state of the organisation needs to be. This is important, as digitisation will ultimately transform the way in which the business goes to market, the products and services sets it takes to market and how it generates revenues out of existing and new streams.

“In addition to this organisational style of planning and implementing, collaboration is another key requirement that is vital for success. Collaboration is a complex ecosystem of interaction, tools and practices, which opens the doors to efficient communication and a reset of leadership and management styles.

“This is where digital transformation often hits hurdles, generally because of the deep demands of reframing how leaders engage and motivate their workforces. Traditional and historic management practices are often ingrained, and can include things like the binding of employees to office premises, communication-by-e-mail, hierarchical structures and on-premises IT landscapes. These practices all deliver outcomes that are slow to respond to market changes.”

Digitisation, he continues, challenges all of these behaviours and toolsets, by opening up faster communication channels, leveraging on-demand scaling up and down, and bringing new types of human personality requirements, behaviours and thinking to the table.

The real problem, suggests Mitchelmore, is that the specific dangers around a failed digital transformation project is the erosion of trust in the power of IT, and business leaders may suffer reputational and confidence impacts. Moreover, competitors can swoop in to overtake the business in the marketplace, even potentially making the organisation obsolete in its pricing and offerings portfolio.

“There are many other negative aspects to a failed digitisation project, including reduced revenues and failure to recognise new revenue streams, change fatigue, and a failure to stimulate collaboration opportunities, which leads to siloed thinking and behaviours, workforce politics and best-of-talent drain. Thereafter, customer experience soon declines, followed by disengagement from the brand, because customer journey friction points with your offerings remain unresolved.”

So, what are the key steps one should undertake in order to ensure your company is part of the 30% that succeeds?

To begin with, says Mitchelmore, the business must adopt a broad scope, customer-centric and strategic approach in order to fully understand the customer journey landscape. This should then be complemented with an approach that is both methodical and design-led to imagine the future state of the organisation, its people, new revenue streams from revamped offerings portfolios, and how it optimises its operations.

“Focus on design-led strategic insights, vision and planning, and training to develop new leadership styles and adjust for a new-way-of-work workforce culture. Implementation should occur via a continuously agile approach, while workforces should be engaged by driving a high degree of awareness and visibility of the strategic digital transformation objectives.

“The business also needs a clear understanding of the real power that can be leveraged from cloud computing. Finally, they should engage with a trusted partner that will advise and deliver more than just a hyped-up marketing message,” he concludes.