Like any buzzword, we are liable to getting different interpretations of the meaning. One definition I like is from Enterprisers Project.
‘Digital transformation is the integration of digital technology into all areas of a business resulting in fundamental changes to how businesses operate and how they deliver value to customers.’
Although this definition is painted with a wide brush, it captures the true purpose in my opinion. I believe every successful organization makes decisions based on adding value to customers (the VOC, Voice of Customer). It is a part of their culture. In a digital transformation – the purpose is using modern technology to expedite the delivery of value to customers. Some say the purpose of digital transformation is to expedite growth, market share, etc. etc. However, increased growth and market share are a function of adding value to customers.
But there’s more lying beneath the surface. If we consider that the purpose of digital transformation is adding value to customers, it suggests we should be looking for ways to use digital technology to do our jobs more efficiently – so we can expedite value to customers. It’s a win-win. However, this is a one way street. If the purpose of digital transformation was to do our jobs more efficiently, it does not necessarily correlate with adding value to customers. The organization might then be in the trap of ‘doing efficiently, that which should not be done at all’.
Here’s a different definition from Salesforce.
‘Digital transformation is the process of using digital technologies to create new — or modify existing — business processes, culture, and customer experiences to meet changing business and market requirements. This reimagining of business in the digital age is digital transformation.’
Although this sounds similar to the first example, my experience working with clients in various industries undergoing ‘digital transformations’ makes me quiver a bit by this second definition because of only one word…. culture. Company culture changes and digital transformation are both large, complex initiatives. Attempting them at the same time may not yield the results you hope to achieve.
My experience has taught me that ALL truly successful, sustainable, and scalable improvement efforts must be conducted in this order:
People still need to do all the work and sustain the system as a whole. Additionally, the customers are people!
The people are essentially the foundation (and common denominator) of every system. The processes, tech and everything else are more like building blocks.
Tools and technology alone do not fix organizational (people) issues. Without first establishing an organization-wide culture of continuous improvement, and engaging the entire team in not only identifying, but understanding ‘WHY are we doing this?’, sustainable change is rare at best. Tools and technology alone do not have the capacity to improve a culture. But they do have the capacity to further diminish an already unhealthy culture by adding perceived complexity to an already fragmented or broken system.
Nor are simple process improvements generally sustainable without a strong culture of continuous improvement at the wheel of these initiatives. Humans tend to dislike change unless they feel they are a part of the change and can see how it benefits them. Things simply drift back to the old ‘status quo’. Yikes!
Many organizations who got the memo that a culture of continuous improvement was important have ‘leap frogged’ their way into a digital transformation years before it became a ‘buzzword’. Pfizer, Lego and IKEA are just a few examples. They had already established a culture of continuous improvement which allowed them to harness the power of modern technology well in advance of typical businesses. Their culture actually spawned digital transformation organically by continuously asking ‘how can this be better?’ The change has stuck. It continues to add value to customers. And it has strengthened their internal commitment to continuous improvement.
Digital transformation requires a solid organizational foundation. If you are considering a digital transformation, it might be a warning sign that your organization as a whole is not yet committed to continuous improvement. A focus on your ‘people ops’ might be a better place to start and yield better outcomes.
Establishing a culture of continuous improvement with the focus on adding value to customers is not for the faint of heart but it is vital to successful and sustainable transformation. Without the ‘transformation’ sticking, you’ve simply gone ‘digital’.
Don’t make the mistake of placing building blocks on a weak foundation. 😎