When you’re driving digital transformation forwards, it’s a mistake to think incrementally, making small changes, moving step by cautious step. While your organisation treads softly, your competitors may be taking bolder, more disruptive strides — and the risk is that they’ll reach the destination first. What’s more, legacy operations have a nasty habit of blocking transformation: The old ways and structures hold back the new.
Transformation needs to happen at the pace of business, and it has to involve the corporate body at its core, affecting the people, processes and technologies that define how the business operates. It’s the only way to change how the business works internally — driving innovation, productivity and efficiency — and in how it delivers products and services to its customers.
But how do you drive transformation at the scale required? McKinsey’s David Edelman, Nathan Marston and Paul Willmott suggest four models. The first, the organisational pivot, means changing corporate structure to prioritise digital programmes, allocating budgets and employees to the newer, more innovative programmes and putting digital leaders in charge of legacy operations. The second, the reverse takeover, involves growing the new digital operating units so they can take over the rest of the business, even if this means migrating platforms, structures, processes and even customers to the new model.
Alternatively, companies can spin off their digital operations, allowing them to grow beyond the original organisation. Or organisations can scale their digital programmes by “piggybacking” with a smaller, more disruptive start-up. Each partner can take advantage of the other’s best qualities, whether those are speed, size, agility, logistics or an existing digital platform.
Meanwhile, Gartner describes three equally vital steps. These begin with structural reorganisation and the building of a diverse new pool of talent, so enhancing the company’s “digital dexterity”. Then comes an investment in the internet of things (IoT), artificial intelligence and APIs to create waves of disruption and cycles of growth. Finally, by industrialising the digital platform — using it to carve out new areas in the market — organisations can maximise the value of transformation as they scale it out.
These might sound like bold ideas, but organisations are putting them into practice. For example, under group chief information officer (CIO) Jason Sahota, Charles Taylor Insurance Services has supercharged its digital transformation. On the one hand, Sahota has used new technology to optimise existing operations, enabling the business to prioritise innovation. On the other, the firm has invested in acquisitions that target new markets and bring in valuable intellectual property (IP), including software platforms that simplify core insurance services. These new platforms are then refined and scaled to the rest of the company, pushing it towards its transformation goals.
Meanwhile at the Post Office, the UK’s largest retail network and financial services chain, CIO Rob Houghton has created a “digital factory” in which multi-disciplinary development teams form disruptive ideas into new services. Such services range from customer-facing apps to new propositions, while internal teams work on platforms that enhance the organisation’s digital capabilities. And where the Post Office can work with other digital leaders, it does, delivering APIs that enable partners to integrate Post Office services into their own web apps.
Digital transformation needs these confident strides forwards, strengthening the corporate body and replacing structures and processes that no longer drive productivity. Be too cautious and you’ll never trigger lasting change. Move confidently, and digital becomes the new and better way you do business.
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