trans·for·ma·tion: a thorough or dramatic change in form or appearance
The term “digital transformation” is ubiquitous and has lost its luster (but everyone still uses it, so I am going to milk it). It is a dated term often used but can have a variety of connotations. Know what it is not about? Technology. It is about people.
The pragmatic reality of the term is scary. It is overwhelming.
It is both of those because transformation relies on changing behaviors of people. Real, human people ranging from employees, customers and investors. In most cases, the behaviors you need to change have been around a very long time...and our brains are hard-wired to not like change very much.
Feeling Brain drives behavior
Our brains do not like it because we are not used to it. It gives us anxiety. It makes us feel inept, uncomfortable. When those sorts of negative emotions arise, our Feeling Brains protect us. You see, anything that involves human behavior needs to incorporate some level of psychology.
Before we go deeper, lets talk about what this mythical term called Digital Transformation is not:
Those are natural byproducts.
Digital transformation is rethinking how you measure the health of your business due to changing buying behaviors (and all of their downstream impact on people).
The gap is widening
According to a new study from Accenture, digital transformation leaders vs. laggards 2015-2018, grew revenue at a 2x pace. Today? That number is 5x!
The outcome of transforming is profitability. Strategy, operational frameworks and best-in-class tactics transform you into an easier-to-do-business-business. People are happy when they get what they want. Give it to them. Everyone wins. Customers get a frictionless relationship with your brand (that keeps them coming back). Employees are engaged because they understand how their day-to-day is doing right by their customers. Investors are happy because the numbers look super terrific.
Broadened further, profitability is not just revenue growth for a stronger EBITDA. Extend that knowledge to avoidable costs. Inefficient operations rob you of productivity.
Did you know the average cost of a phone call into your customer service team is $8?!?
How many of your inbound calls revolve around a short list of basic questions like "what is the status of my order" or "Can you help me get the ____ for my ____" or "How do I find ____ on your website"?
My hunch is a lot. Guess how much it costs to digitally self-serve that same answer? A dime! (Gartner)
Thinking Brain is in charge of memory, does yours remember way back 60 seconds ago when I said Digital Transformation is not about technology? Of course, technology is a core element of transformation but if we do not start with people, the technology and associated processes do not matter. Why? Well, until the AI overlords take over...we need people to execute strategy.
You see, technology's primary role is simply to streamline inefficient processes. There is an entire science of selecting, configuring and utilizing these technologies and your technology teams are critical to the success of your transformation.
Back to the behavior shifts, starting with your workforce. The most valuable asset of any great organization is not the products it makes or the services it provides. It is the people that make the business run. The further down the list "digital" is for your organization's core skills and disciplines, the more challenging the change will be for your most valuable asset. Lean into that.
Start with people
Thinking Brain handles the numbers stuff
If you get the Feeling Brain stuff right, Thinking Brain can get a breather and you will need it for this next part. Thinking Brain needs numbers to interpret the financial health of the company.
"If your KPIs are not preceded with a currency sign, assume no one cares"
If there is anything we have learned from the past year, it is that science matters and the art of transformation is a science. Not so much of data science, rather psychology.
If your organization is committed to transforming but have not seen the intended outcomes become reality, we would love to help.