Much has been said about the impact of digital transformation in the marketplace, and there is no question that this transformation is key to ongoing success and longevity for many businesses. This is the first in a series of posts created to address the crucial aspects of performing a successful digital transformation.
Customer and market dynamics are changing at a pace never seen before, and this kind of market impact will render changes in organizations that are not always apparent. Companies need to be prepared for this new assault on traditional ways of doing things, the teams involved, and organizational structures.
Technology is only one aspect of the journey to transformation – in some cases it will help drive that transformation, in other cases it is the enabling technology to a plan already in place. In almost every case, there will be an organizational impact as a result of the transformation. Embracing the organizational change that accompanies the digital transformation process can make the difference between being on time and on budget, and wishing that you were.
Building consensus in digital transformation is critical
One of the biggest challenges of ERP transformations that happened in the 90’s still holds true today: The boardroom must not only endorse the change, but also embrace it. Anything less than full buy-in greatly increases the risks of not getting it right on the first pass. Digital transformation of the front office is likely to impact most, if not all, areas of the business.
I recently worked with a company in the midst of its front-office digital transformation. During the initial minutes of our first meeting, I asked who the executive sponsor was (it was the CIO) and how engaged she was in the transformation planning and checkpoints with the business. It quickly became clear that this was a project run by her team – almost exclusively by the IT organization. They viewed the business as their overly demanding “customer.” Worse yet, no one on the core team knew if the board was aware or engaged in any meaningful way in the project.
This scenario highlights two fundamental challenges that companies face in the digital transformation effort:
- Board support is crucial: At the very beginning of a digital transformation project, there must be clear guidance from the board that the project is important enough to be a mandate. The board could issue a few guiding principles regarding the critical nature of the transformation and the expected support of the whole organization.
- Business leadership buy-in: There must be full support from the business leadership. Ideally the heads of the business and the IT leadership are aligned early and supporting the project from the top down. Joint statements of mission, goals, and responsibility will go a long way toward setting the right attitude regarding the effort.
Investing time upfront to prioritize focus can save precious time down the road. When the CEO of a multi-billion Euro business worked directly with the core team to support development of the mission statement and buy-in across the organization, there was far less internal squabbling as the project got underway. CEO sponsorship of the digital transformation process is crucial to the success of the project – and the long-term success of the organization.
Say it clearly: Crafting the mission statement
Front-office digital transformation runs the gamut of organizational impact – from a straightforward technology upgrade, to a complete reset of technology, process, and change to the organization – making it a bit of a challenge to generalize the mission statement. It is clear that in every case, identifying the goals of the effort accomplishes buy-in upfront across the organization.
Though it still happens, there is little room for the “If we build it, they will come” approach inside the organization. The toughest discussions I am involved with regarding transformation are the result of the project not being well-presented to the rest of the organization. Expectation mismatches only lead to trouble.
Some might challenge the notion that you should craft a mission statement for every project. I would argue that even upgrades to technology should have a mission statement in place, as it will set the tone and scope for the project. Everyone fears scope creep (more on that later), and this is the easiest starting point to minimizing unplanned project expansion.
As you craft the mission statement, it is crucial to evaluate the ability of your organization to accept change. In mature organizations it is reasonable to have a detailed statement that underscores the long-range vision. For less mature organizations still finding their way strategically, the mission statement should look more generic to reduce pushback from elements within the company that don’t align to the changes.
Begin your statement with the motivations driving the effort. This will help refine your mission directly. What are your competitors doing? Are they ahead of you? Are there new entrants in your business? What trends in your industry are relevant? How has business interaction with your customers changed? Are there new customer segments you will reach?
While there are a host of questions to consider, the set relevant to your transformation will vary based upon the size of the effort and your objectives.
The mission statement should be concise enough that the aligned team can internalize it, and executive leadership and the board can communicate it effectively. While this seems obvious, we often find that customers who struggle with digital transformation have a mission statement that has little connection to what the project morphed into.
Apart from failing to have one, the two biggest problems with setting your mission statement are:
- Not getting buy-in across the organization
- Putting too much into the mission statement
Everyone on the team, including partners and technology vendors, should be made aware of, and be able to articulate, the mission of the project. This will form the baseline for your project and provide the foundation you need to deliver – and communicate– successfully.
Mission statements for the organization should serve as overarching guides for the transformation.
Here are some big-picture views:
- Amazon.com: Our vision is to be earth’s most customer centric company; to build a place where people can come to find and discover anything they might want to buy online.
- eBay: Our mission is to provide a global online marketplace where practically anyone can trade practically anything, enabling economic opportunity around the world.
- Zappos: Our goal is to position Zappos as the online service leader. If we can get customers to associate the Zappos brand with the absolute best service, then we can expand into other product categories beyond shoes.
- Clarks Wholesale eCommerce: Digitally delivering the right shoes, to the right customer, at the right time; while being the largest profit-generating resource at Clarks, always in perfect sync with Clarks’ global wholesale strategy. (Jack Di Lillo, B2B e-commerce manager for Clarks shared a more specific mission for the projects that are a part of the overall mission.)
Technology is an enabler in transformation and a key part of the equation, but it’s never a good idea to start with technology – the organization first needs to embrace the need for change far before the deployment of a specific technology. Defining that needed change will help determine the right tools to provide that enablement.
In the next post in this series, I’ll discuss how to define the scope, and more importantly the guard rails, of your digital transformation project.
Digital transformation is hard, but the alternative for most companies is worse. If you haven’t started the conversation about transformation, there is no better time than the present.
Uncertainty is here to stay. By imagining multiple destinies and working back to the present, companies can prepare for anything. That’s why Strategic Plans Need Multiple Futures.