Digital Transformation Strategy: Business Before Technology
We’ve learned a few things from Harvard Business Review, Gartner, and Forrester since we last talked as we continue exploring and defining a digital transformation strategy. We recall earlier comments regarding CIO challenges of how the pandemic saved many of us from needing to recover our prior floundering efforts.
These periods of intense focus and dramatic change energize your organization as it rallies around a common threat and dedicates effort and funding toward transformation. During the intense competition, it’s easy to overlook how important the earlier, more mundane investments are to building capabilities and “future fitness” (thanks to Forrester for this turn of phrase). Training prepares us to pivot quickly as a team toward a new threat, but losing focus is easy as we fight to overcome ignorance, fear, guesswork, and diffusion (2).
A Methodical Approach to Digital Transformation Strategy
This got us thinking more about how vital motive and planning are to approach transformation methodically. We’re undergoing a transformation of our own — and will tell you about it soon, we promise. We know from experience that it’s challenging to be this planful about change when so many of the daily challenges we face are almost entirely reactive. Measuring the business value of transformation is hard and takes creativity, work, time, and commitment.
Our experience shows that the build-up to complete digital transformation often has humble origins. It might start with a few pilot projects focused on moving a few analog processes to digital to develop early Agile capabilities. But it quickly progresses along the value continuum with later efforts, as shown here.
This is fine, as long as it’s intentional. But as long as we’re on this topic, it makes sense to drive the point home with examples of what is NOT progress along this continuum towards transformation.
Digital transformation is NOT an unintentionally positive result of something you did.
There’s an old saying ascribed to many: “Character is what you do when no one is watching.” Unlike character, digital transformation is what you get when someone IS watching. What does this mean? It means you have to be intentional about it, have a plan, establish metrics, baseline those metrics before making changes, and then measure the actual impact.
The path to digital transformation usually involves an element of agile transformation as well — you need to get a product and development mindset in place to support the work. Forrester offers several meaningful metrics to gauge your progress towards modern application development practices as the end goal. (3)
Digital transformation is NOT the latest quick fix to respond to some new external crisis.
We all watched as the world pivoted to virtual everything over the last few years. Was this digital transformation? Did those that acted fastest gain market share? Of course — at least temporarily.
As we emerge from the crisis, it is clear that those who prepared for it made meaningful and lasting changes in operationalizing new digital models. (1) Those that weren’t ready tried to keep up with digital parity by rolling out solutions that enabled virtual or low contact access to their services with little or no lasting impact on their operations.
Digital transformation is NOT adding incremental, low-hanging features to an existing product or cool new technology looking for a problem to solve.
A digital transformation follows a roadmap. And while there are likely digital projects and features on that roadmap, implementing them alone rarely accomplishes any significant transformation. It may provide meaningful relief in removing pain from archaic processes or even create efficiency through automation. But it probably doesn’t transform your customer experience.
It’s OK to align your digital transformation roadmap with the need for new products or features after you have completed your business model canvas planning (1). However, don’t fall into the trap of thinking that your product roadmap IS a complete plan for digital transformation. It’s necessary but not sufficient.
Digital transformation is NEVER accomplished solely by buying or coding new technologies, nor is coding sufficient to prove that transformation is happening.
Gartner highlights that digital transformation occurs on two levels: the business and IT systems. Yes, IT is constantly working on optimizing and modernizing the technologies they use. In a manufacturing context, this is particularly important. But at the same time, the business case for more profound transformation lies in considering new business models, changes in your industry, and the shift towards fully integrated, digital manufacturing practices (5).
You must consider the business and IT systems in concert to create meaningful digital transformation.
The path to digital transformation IS paved with a strong training plan that teaches your team how to prepare for the next competition.
The best teams are more about leadership, teamwork, trust, and building shared ways of working than finding the best individuals in each position. The best “Digitally Transcendent Team” is like a winning basketball team. You have to build diverse capabilities; in the same way, you can’t build a winning basketball team with only shooting guards; you can’t plan and execute a digital transformation with only developers.
To prepare, you train and practice together. This is not only important, so everyone has the stamina to make it through the game, but everyone has the skills they need to play their position. For your digital transformation dream team, this means bringing a product mindset, a focus on business value, and a commitment to measurement so you can understand what does and doesn’t work. It also means selecting for individual excellence, clear vision and strategy, beautiful designs, efficient code, and trustworthy deployment processes.
Learning the offensive and defensive plays gives the team a shared set of expectations, and practicing them together builds both proficiency and trust. Team members know their roles and trust the others to do their jobs. The shooting guard doesn’t camp out in the lane on the basketball court because they trust the bigs to be ready for the rebound. On your digital court, your developers don’t spend their evenings doing market research because they trust that the Product Manager has done the work to understand where the most business value lies.
And, of course, the last (or first) ingredient is leadership. Great teams are only brought together with good coaches and leaders. The best coaches don’t have to invent the plays, but they need to understand their team members and choose a strategy that is appropriate for their strengths. True transformation requires a relatable vision, cooperation, and discipline that are near impossible to achieve without solid leadership.
- “How to Map Out Your Digital Transformation”, Harvard Business Review, Benjamin Mueller, https://hbr.org/2022/04/how-to-map-out-your-digital-transformation,
- “Digital Strategy: The Four Fights You Have To Win,” McKinsey Digital, April 27, 2022, https://www.mckinsey.com/business-functions/mckinsey-digital/our-insights/digital-strategy-the-four-fights-you-have-to-win, October 18, 2018
- “Modern Development Metrics That Really Matter,” Forrester, Diego Lo Giudice, et al., August 2, 2021
- “General Magic” Documentary, Sarah Kerruish, Matt Maude, https://www.amazon.com/gp/video/detail/B07WS4HKXV or other streaming services, 2019
- “Manufacturing Digital Transformation and Innovation Primer for 2022”, Gartner, Mike Ramsey, February 4, 2022
- “Executive Guide 2022: Agile Transformation — Accelerate Transformation With Agile Leadership, People, Practices, And Technology”, Forrester, Diego Lo Guidice, et al., June 10, 2022