Nobody tells you at the outset that digital transformation is very hard and very risky. However, you don’t have to look too far to find examples of failed attempts to embrace the digital economy. Failure isn’t often considered a good thing in corporate culture, but it is in fact essential as part of a highly iterative, risk-tolerant culture of experimentation. Here’s how to find fruit in the failure of undergoing digital transformation.
Failure is hard
Previously, success or failure could be measured using time, cost or scope as metrics. Blown budgets, unfulfilled requirements and missed deadlines were all clear indicators of failure. In the digital age, failure is hard to measure, with digital transformation projects particularly difficult to quantify since nothing like this has been done before.
Failure is also hard to accept; no one likes to admit they have failed. To the risk averse, failure is a bad thing and must be mitigated, managed and avoided at all costs. Many organisations carry on with failing projects in the hope that things will suddenly improve as other projects may have done. Additionally, projects, powered by time-and-materials style funding can rumble on forever, even when they should be canned. Projects can also nose-dive at any point in time. Even if at first they seem a success, maintaining a project is hard work.
However, digital transformation projects are hard to succeed in without failure. It is no coincidence that most modern techniques for developing digital products are iterative – approaches such as User Research, Agile Delivery and Continuous Delivery all embrace continuous improvement. This assumes things will not be perfect on day one, but that things will fail and then be fixed as the process moves along. Therefore, businesses must try things and take risks.
Digital projects require a data-driven culture of experimentation in order to continuously refine the organisation’s relationship with its digital users. Gathering data from real people’s experiences with the business’ products and services enables organisations to learn from this feedback and improve as often as the business allows.
Failure, if properly embraced, enables and actually leads to success.
Mistakes to avoid
Digital transformation projects are still in their infancy and there is no set method for taking your business digital. However, there are common and simple mistakes to avoid when beginning the transformation journey.
Many make the mistake of putting technology before strategy. It’s easy to get caught up in a self-focused whirlwind of the possibilities of blockchain, AI, cloud, RPA, Big Data and so forth before you completely understand your problems. Having a view of which areas need fixing immediately is a mistake. Similarly, businesses should not focus on small and bitesize transformations, they need to consider the transforming force as a whole. Having a holistic, thought-out strategy should be the very first step.
Another big mistake is ignoring the iceberg of legacy. Organisations accumulate tons of technology and data – the average enterprise uses over 1,000 software applications. While many focus on the innovation change associated with digital transformation, it is crucial to understand how these changes will work alongside existing systems. These systems are often heavily used in mission-critical capacities and serve as repositories of vitally important data – you cannot just automatically switch to new tools.
Digital transformation typically shifts the delivery mindset from ‘projects’ – which have a beginning, a middle and an end – to ‘products’ – versions of which are iterative and improve forever. Digital transformation does not have a definition of ‘done’, it’s simply a way to embrace and tackle change.
Finally, many make the mistake of getting stuck in the echo chamber. Over the past few decades, extensive market research into products has been the norm for businesses’ approach to the development process. Many businesses have started using this approach with digital ‘products’ such as websites, mobile apps, bots and more. This won’t work for companies who want to undergo digital transformation – it’s vital to stop sitting around a table and deciding what they think people want.
Companies need to turn their gaze outward and understand who the users of their digital product are, who their users will be, and what makes them tick so they can match them to the technology provided. Market research doesn’t work, user experience research does.
Culture is key
Finding fruit in failure relies on the right kind of culture. A company needs a team that can embrace and admit failure, and then learn from the experimentation to keep driving forward and keep improving. To make sure your company is ready for the digital transformation process, you need to have the right work culture in place.
If serious about implementing digital transformation, technology must be given the attention it deserves. Making it a top priority so that the process can start in the board room, not the server room, is essential. A lack of CEO sponsorship, as well as excessive caution and fear of the unknown has contributed to the stagnant response to undergo digital transportation so far. This needs to change rapidly if they want their businesses to survive.
Further, if wanting to be a top digital company in your industry, having belief in your offering and understanding what makes it unique is also crucial. A company that believes in its service or product will find it easier to connect with the users that can transform it into a digital leader.
With serious changes in companies, the temptation is to go on a hiring spree. Technology is difficult; you need great people, not lots of people. From highly-skilled permanent employees to contractors with experience and consultancies who can be objective, ensuring you find the right talent that can help you implement your vision of a digital transformation is vital.
While digital transformation is a tough process to plan, it is key to embrace a fail-fast, fail-cheap learning culture; something that is counter-intuitively critical to success. Failure is an ever-present companion on the digital transformation journey, it can be both friend and foe, and the success will be determined by what you decide to do with it.
Chris Porter, Managing Director of Digital Transformation, 6point6 (opens in new tab)
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