Business leaders need to see both sides of the ‘digital transformation’ coin

Digital transformation is something every company is focused on, but are they seeing the full picture or is something missing?
5 March 2020

Kodak is often used as an example of companies that failed to keep up with the times, but is there a digital transformation lesson there? Source: Shutterstock

Organizations have been focused on digital transformation for the past several years. Of course, their commitment is reflected in their investments — but are the changes reflected internally as well as externally? Maybe not.

When business leaders decide to pursue digital projects, they often do so in order to boost efficiencies or delight customers. There’s seldom a focus on balancing efforts to maximize impact.

According to experts, however, to truly succeed in the digital era, companies need to focus on digitizing their operations as well as developing products and services fit for use in the age of technology.

One without the other will not be sustainable, at least not for long.

Kodak is one of the first companies that was completely disrupted because they failed to heed the arrival of digital cameras and the shift in consumer needs. Today, organizations that fail to engage in holistic transformation risk suffering a similar fate.

The Massachusettes Institute of Technology (MIT) did some research recently which provided some guidance on how organizations can focus on and excel at both sides of the ‘digital transformation’ coin.

Is it a good idea to divide and conquer?

MIT believes that companies could do well to create separate teams to tackle digital transformation for the different sides of the coin.

From the inside, business leaders might feel that having separate teams is a waste of resources because ultimately, the business needs its digital initiatives to converge — like its data, analytics, and platforms.

However, the reality is that digital transformation can be optimized with separate teams so long as there’s a shared vision of the organization’s future state.

Each team, working on their own side of improvements, can make contributions that help move closer to the end state. In practice, this is often more productive as well.

Take a manufacturing entity for instance.

The team focused on transforming operations can work closely with those on the shop floor to understand their workflow and identify opportunities to eliminate, improve, and automate tasks, ultimately expanding the team’s remit to sourcing, logistics, and other operational areas of the business.

On the other hand, the team focused on helping develop digital products and services can work with marketing and sales teams to get a sense of the customer’s needs, wants, and expectations, and transform the organization’s portfolio of offerings accordingly.

Digital transformation needs a four-wheel drivetrain

At a time when organizations are looking to accelerate their journey up the digital maturity curve, transformation needs to be a 12-cylinder piston engine supported by a four-wheel drivetrain.

Truth be told, going digital is hard. It’s something that most companies have failed at for the longest time — and only recently tasted success as a result of past experiences.

The digital era is different.

Investments yield great returns but take longer to deliver, and require frequent tweaks to ensure that ground realities are accounted for when implementing use cases or scaling up pilot projects.

Organizations need to be agile, they need to think big but start small, they need to forget all the rules of success that brought them to where they are today and embrace a world where the pace of innovation exceeds even the pace of regulation, several times over — and yet, earns the support (and trust) of lawmakers.

Unless you’re dealing with customer data, even the largest organizations are embracing mantras chanted by startups such as ‘fail fast, fail often’.

The risks, of course, are huge, but those that innovate boldly and embrace digital solutions to transform their operations and revolutionize their portfolio of offerings have an opportunity to win big. Big enough to reshape the market, regionally, and globally.