Digital transformation can often feel a little like chasing the pot of gold at the end of the rainbow. As you achieve one milestone, you look up to see the rainbow has moved and that pot of gold is as elusive as the profitability stakeholders seem to immediately expect from any digital activity.
When, in 2010, Transform first started conducting annual research – our Digital Maturity Insights (DMI) – into how digitally mature companies were, we were asking the now astonishingly basic; “Do you have a website” and “Is it transactional?” Several iterations of DMI later and we were asking, “Do you have a mobile strategy?”
Then the industry got used to the channels and tech and began to look more closely at the customer. We became comfortable talking about user journeys, CX & employee experience, test-and-learn and service design. The number of tech stories we’re seeing every week seems to be growing almost exponentially as AI, voice interfaces and IoT horde column inches. Yet to become too tech-focussed when approaching business problems is a mistake.
The difference between operating digitally and actually being digital lies in having a truly balanced eco-system. Yes, tech is important. Yes, the customer is important too. Likewise, the channels you deliver through are key. And, of course, data is underpinning nearly everything we do digitally. But without the right internal employee culture and a well-developed strategy you’ll never be digitally mature.
Being digital on the inside
As with the chicken and the egg, it doesn’t really matter whether customer or employee comes first, the key point is that they both depend on each other. Yet many organisations are so focussed on the customer, they neglect supporting employees with the kinds of digital transformation that can help them deliver on the overall purpose of the company. Whilst digital continues to get more bandwidth, investment and attention, we need to move our focus from customer experience to operations if we’re to really benefit the end user.
Our research shows that whilst 51 per cent of businesses say they’re customer-focussed, just 2 per cent said they were employee focussed. Worse still, 87 per cent said that their employees ‘are not engaged’. It’s a huge concern. Motivated, engaged employees are more productive and deliver greater returns. Businesses need to be looking internally to drive great results for their customers. Legacy processes and general inefficiencies can affect employees too, so we should all consider the implications of poor digital on internal morale and culture.
From our perspective at Transform, there are three ways companies can drive internal change:
- Apply a Customer Experience approach to Employee Experience – great design delivers processes that are productive, effective and appreciated, internally and externally
- Address the organisational challenge – define ways of working that combine the best of IT, digital and the employee teams instead of limiting digital expertise to the customer
- Act commercially and considerately – manage ‘change’ from the beginning, and treat it as a ‘people change’ programme and just a ‘process reengineering’
With data, size doesn’t always matter
Most businesses are now aware of the value data can offer them, but many still lack the knowledge and experience to actually extract it. Billions may be being invested in large-scale tech that stores, saves, organises, analyses and acts on data – yet few companies have seen the promised ROI or clear operational benefits. The overt focus on CRM and SCV has left us with an eco-system too heavily weighted towards technology, with not enough focus on what we need to get out of data, or the strategy, culture and customer engagement models required to generate change. In short, it’s all very well creating a giant pool of data – but do you have the expertise and tools to actually fish in it?
You’ll have read that more data will be created this year than in the history of data, but still less than 0.5% of it will be used for operational decision making. We’ve reached the point where smart, connected data is where the value lies. Our research shows that 72% are focused on gathering data, rather than analysing it – and whilst 80% say data is “key to decision making”, under a third (31%) are actually structured for it.
Digital leadership is vertical AND horizontal
Remember when the Customer Experience Officer (CXO) was a thing? We’ve seen the debate about where digital leadership belongs continue, whether it’s with the CCO, CIO or even CMO. That’s not to mention the ongoing paradox of the CDO, whereby most organisations that have one are less digitally mature than those without!
The fact is that responsibility for digital isn’t just with one job title, it needs to be universal across all positions. The role of CEO is key to ensure this happens, as a data leader driving digital across all aspects of the business and getting the most out of their teams. Likewise – and not often mentioned – is the low-level of digital knowledge at non-exec level. Just 1.7% of non-exec directors in the FTSE 100 would qualify as ‘digital’. Already today a digitally capable non-exec board member can be worth their weight in bitcoin!
The best leaders make digital competency/understanding a key requirement across the entirety of their business, top to bottom. They also put less focus on Target Operating Models and fixed structures of working, and put more on flexibility by design and working across functions. Similarly, empower HR to hire for the near-future and not just the now.
The goalposts of digital maturity are constantly moving, and the benchmarks of success often a little rose-tinted. Since we started tracking Digital Maturity, we’ve noticed the shift in what’s being achieved in the world of digital, but also where the main gaps are in companies building a digitally mature, balanced eco-system, where data empowers technology, culture and organisation, channels being used, customers and of course, strategy.
Businesses can improve and rebalance their digital efforts in the three clear areas outlined above, and – as ever – those that do have much to gain; foster an internal culture that’s as employee-minded as it is customer-focussed; hire or outsource the complicated data expertise required to actually grow the business and empower change, and finally, stop trying to make CDOs happen – they’re not going to happen.
In 2017, one thing is clear to us, digital maturity isn’t what you do, but how you do it. It’s organisational and approach-based. Far more than simply the tech and channels of digital experiences. And it’s data that’s enabling us all to do this more effectively and efficiently.
Emma Robertson, CEO, Transform
Image Credit: Chombosan / Shutterstock