Three Secrets for Successful Digital Transformation

September 4, 2015 Patrick Ballin

Three Secrets for Successful Digital Transformation: Clarity, Adaptability, Effective Interaction

In this dialogue between digital transformation expert Stephen Moffitt (Plus or Minus Seven) and interaction consultant Patrick Ballin (3Circle Partners) , we discover that:

  1. Digital transformation is different from traditional business change
  2. Clarity is critical – organisations have to make their implicit goals explicit
  3. Interaction, at a deep level, needs to be woven into the whole process
  4. Without understanding and tackling all three of these points, we set ourselves up to fail

In conversation... 

In our discussions, we keep talking about digital transformation.  It seems digital transformation is not business change as we knew it in the past.  How would you define the differences?

The environment in which the activity takes place is different. Business change works in a stable, predictable environment. Transformation, especially digital transformation, is a response to an unstable and unpredictable environment.  As a result, digital transformation is about making the organisation more flexible and adaptive, so it is able to try things, learn from what they do and adapt.

That’s a major shift in how organisations do things.  Because this is still a relatively new phenomenon, I would expect that businesses often have an implicit or incomplete definition of what they mean when they say that they want to digitally transform themselves.

Yes, that has been our experience also.  Many of these initiatives are seen as failures because their goals are unclear or undefined.  And that is the first point where we, as consultants, can bring value. There needs to be a clarity of definition and of strategy. The senior management recognise, to some degree, that the world has changed and that raises either a major risk or opportunity that they can’t address with the tools, structures and relationships they have. The question is: how does the organisation have to transform itself to either solve the risk or take advantage of the opportunity that's being presented to them.

That makes a lot of sense.  When I meet with clients we generally start by assessing the current state. 

 

Yes, it starts with a definition of what the problem or opportunity is. From there, you need to define a strategy for addressing it, knowing that you are in an evolving environment. One of the tools we use to frame this strategy is a four-factor approach. We ask you, as the client organisation, to detail what you see as the end state you want in each of these areas: technology, data, resources (people), and business models/processes.

These are, in our experience, the areas that are inevitably involved in any transformation process.

We also need to add a fifth factor, effective interaction, at two levels:

Firstly, how are we, as a group forming the digital transformation strategy, interacting? Because the degree to which the group that’s tasked with guiding the transformation works well together is critical to the quality of, and subsequent implementation of, the vision.

And secondly, what are our detailed plans for effective interaction in the implementation of this strategy, throughout the organisation - including interactions with any partners? This is at a much deeper level than the typical “Comms and Engagement plan.” It’s about the quality as well as the content of interaction, including the day-to-day interactions of the people working on the transformation, for example, how agile teams in their scrums interact with each other and with the business owner. Also how the business owner interacts with the rest of the business.

Exactly. There’s the strategic point of view – the vision - how do they want to proceed in this transformation? Then there’s this interaction point – how do we make this happen? The success of the strategy in the four areas we discussed is the result of the quality and quantity of interaction you mentioned.

The link here is between clear organisational goals and what the teams do with those goals. Typically, we have this plan, but it doesn’t deliver what we intended within the established time and resources.

What savvy organisations can do is to take into account this highly predictable risk: the potential interaction gap. If we don’t address this, we set ourselves up to fail, or at least do less well than we could.

This is true even if the organisation’s strategy is "We don’t know what we want to become, so we are going to try a number of different things to see which ones work." That’s in itself a strategic digital transformation decision and it’s also a decision about our interaction plans. This particular strategic decision is similar to evolutionary biology. A new environmental space opens up and lots of new things are tried. Stuff then fails or succeeds. And to this you can add, this is how we are going to interact to make this process of experimentation work…

Exactly. The strategy in this case is to experiment and evolve. And it’s also a perfect example of a learning organisation in practice. The norms and behaviours created within those teams will help them to achieve the desired outcome of rapid innovation and digital transformation - or not. They will either develop helpful ways of interacting, or unhelpful ones, and these will quickly become embedded and affect the outcome. Our job is to guide them to the behaviours that are going to prove helpful.

And that’s also the difference between a transformation and a traditional business change. We don’t know what the end state is going to be because it’s a continuously evolving thing. The actors don’t know, top management don’t know (in fact, can’t know). We have to learn.

Therefore the interaction plan becomes important because you want to be able to capture the ideas, knowledge, data and utilise them to shape the newly evolving organisation.

So Patrick, this goes back to what you were saying earlier about the importance of the "fifth factor."

Yes, the interaction plan starts as soon as we begin talking about the vision, because it’s so critical that the team that’s tasked with shaping the digital transformation gets that right. They have to work exceptionally well together and they have to be clear about their purpose. From this, as we mentioned, there needs to be a clear interaction plan that addresses the fact that things are going to be different, therefore people need to be engaged and feed into the learning of the organisation. We also need to extend this back up to the strategy. That is also an iterative process. Those responsible for the strategy, the guiding team, need to have a plan to interact with those implementing the transformation and then incorporate the learnings and adapt the strategy.

It seems like we have covered a lot of ground here. How would you summarise where we now are?

I would say the key point is that digital transformation is not business change. It requires a different strategic and delivery approach. This approach starts from the fact that we do not know future when embarking on a digital transformation, therefore we need clarity, adaptability and interaction baked into both strategy and execution. Without these, the risk of failure is very high.

Stephen Moffitt is Director and Lead Consultant for Plus or Minus Seven, who research and consult on digital transformation; and Patrick Ballin leads the UK effective interaction practice for 3Circle Partners.

 

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About the Author

Patrick Ballin

Patrick offers more than 25 years of experience with some of the most successful businesses in Europe as a consultant, change manager and executive coach. He has helped many well-known organizations to get their ideas and projects off the ground by working with business leaders and their teams to optimize interaction, strategy and execution.

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