American Express wasn’t always a financial titan. Nintendo didn’t always sell video games. Hasbro didn’t always sell toys. Heck, Gap used to be a music store.
When these companies sensed their customers asking for different or better services, they did what most organisations did not: they transformed their organisation - sometimes repeatedly - to meet their customers’ needs and wants.
Those bold transformations are why we can enjoy modern credit and - in the case of Gap - comfortable jeans.
Today’s businesses find themselves in a similar situation: customer wants and needs, spurred by digital innovations, are changing. Established companies, regardless of their industry, need the agility and the know-how to think digitally to best serve their customers’ evolving expectations. To do this, businesses will need to constantly leverage the latest in digital technologies to deliver new value and to provide the agility to adapt to customer needs.
Still, commitment to transformation is no guarantee of success. So how does a business become a digital business? To help bring some clarity, we commissioned Forrester Consulting to analyse how companies approach digital transformations and who, if anyone, bears responsibility for that transformation. In-depth surveys were conducted with senior business and technology executives in France, Germany, the United Kingdom and the United States. The results of those surveys can be found in“Be Digital. Be More. Preparing for the Digital Tsunami.”
The study identified three critical issues:
- First, many companies lacked a “systemic” digital strategy - one where the company in question has a mature digital operating model;
- Second, companies suffer from organisational issues that prevent them from successfully executing a digital strategy;
- Third, many companies have higher levels of digital maturity and digital investment when the company’s CEO leads the digital strategy.
Some businesses seem to have a fundamental misunderstanding of what it means to have a mature digital operating model. Almost a third of companies feel they have a systematic digital strategy in place, while only nine per cent of firms have “reached a level of digital maturity where they’re truly differentiating across all aspects of digital activity.”
While there are many reason for this, three stand out from the survey: a lack of digital expertise and skills (57 per cent), disagreement on digital ownership within the business (52 per cent) or organisational inertia (51 per cent) holding back digital transformation.
Strong leadership from the CEO can fix each of these issues. Fifty-one per cent of respondents said they perceive their CEO is responsible for the company’s digital vision and strategy. Moreover, 57 per cent of organisations where the CEO is responsible for digital strategy are more likely to have a systematic digital operating model, a model more likely to lead to a fundamental digital transformation followed by the CIO (17 per cent) and the CSO (10 per cent).
Clearly, the C-suite is critical to leading a digital transformation, but that can only occur when leaders provide compelling and holistic digital vision, paired with clear strategy and ownership. Digital transformation is driven by a strong leadership willing to dedicate resources and time towards a fundamental shift in their company’s structure. Silos need to be torn down, departments need to be given autonomy and initiatives need dedicated funding. There has to be a disproportionate focus on a ‘customer needs, rapid outcomes, fail-fast and get it done attitude’.
A digital transformation is never a one-off project. It is a journey, a continuum of leveraging the best technology tools & creating new product or service experiences for your customers. It’s about equipping your workforce with the latest tool-sets to be able to engage with your customers, to be able to collaborate and innovate on the job. It is a journey built on the foundation of continuous learning & willingness to rapidly adapt.
It’s about keeping the customer at the centre of change. It’s about recognising what your company provides, recognising what your customers want and changing quickly to meet their needs. In short, Digital transformation is a fundamental cultural change in the entire organisation. A change journey, too important for the CEO to ignore.
Venkatraman Gangadharan AVP, Infosys Digital at Infosys
Image source: Shutterstock/Nomad_Soul