Many businesses hesitate when it comes to digital transformation because of the costs, time and effort it requires; but, Rich McEachran argues, the investment is worthwhile. In this brief guide to tackling digital transformation, McEachran explains why setting reasonable expectations, taking a long-term view, upending old hierarchies and embracing adaptation as the new status quo are crucial for a successful transformation. With the right attitude and supportive data, you can have the confidence to bring your organization into the digital world.
- Digital transformation is becoming more of a necessity than not in today’s world.
- Adopt four foundational mind-sets to ensure a successful transformation effort.
Digital transformation is becoming more of a necessity than not in today’s world.
Understandably, many businesses – even those facing imminent disruption – hesitate to invest their valuable funds in digital transformation. Still, the risk is often necessary to avoid loss of competitiveness. When executed correctly, the eventual positive outcomes of the shift will be worth any cost-related challenges and the uncertainties associated with the process.
For example, the education company Pearson faced profit warnings from 2012 to 2020. Since then, the company has reinvented itself as a digital-first business under the leadership of CEO Andy Bird, a former Disney executive who joined in October 2020. Bird highlighted the shift in learning habits due to technology in a March 2021 trading update, comparing it to the changes seen in entertainment consumption like consumers switching from DVDs to streaming.
“There are a lot of companies who talk about transformation, but not all of them succeed.” (Andy Bird)
Amazon CEO Andy Jassy noted that the transformation at Pearson succeeded thanks to its unwavering commitment to the process. Those who wish to follow suit must identify a uniting vision and understand that accomplishing that vision will take time.
Adopt four foundational mind-sets to ensure a successful transformation effort.
Succeeding with your digital transformation – whether that involves building a website, changing your services into a digital format or creating an app – starts with setting the right expectations.
“Anyone who imagines that a transformation will be an overnight success is likely to be in for a big disappointment.”
Adopt these four mind-sets to prepare yourself for the transformation process:
- Expect growth to take time – Digital transformations require a lot of money up front, and the profits from these changes might take a while to show up. These facts may make some CEOs reluctant to start or continue such an undertaking. If you approach the process with an eye toward future growth, however, it can help counter the stress of immediate financial pressures. An FTI Consulting survey of 600 business leaders in the UK, France and Germany revealed that even those who didn’t consider their transformations a complete success projected that their businesses would grow, on average, 27% over the next year. Meanwhile, those who had not begun any transformations projected an average of 18% growth.
- Focus on long-term value – Rather than thinking too much about your transformation’s costs, consider the new opportunities it will create for your business. Digital transformation will likely improve agility and decision-making by speeding up your ability to collect and analyze feedback. It will also reveal new revenue streams, which, in turn, will make your company more resilient and adaptable in the face of disruption.
- Embrace operational changes – In and of itself, new technology won’t transform your business. Companies must first ensure their way of doing things fits the technology they hope to adopt. For example, generative AI won’t help a company wedded to a “silo mentality” or other approaches to work that impede the free flow of information and collaboration between teams and limit individuals’ capacity for innovation.
- Make adaptation a core value – Establish a continuous feedback loop – from employees and customers alike – that guides the transformation process and keeps it on track. Automation may come with steep costs, initially, but it makes certain tasks easier and will make innovation and expansion less expensive in the long run.
About the Author
Rich McEachran is a freelance journalist and copywriter.