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Your Digital Transformation Is Going To Fail!

I read a great article recently on LinkedIn titled Digital transformation is likely going to fail in your company. Here are 5 reasons why! The author was Maarten Ectors, Chief Digital Officer at Legal and General and naturally you might expect most digital professionals to be talking more positively about digital transformation – what was Maarten trying to say?

Let’s start by summarising the five specific reasons he lists in his article:

1.     Departmental Focus; new startups build their team and focus around products, not departments. Every large organisation is focused on the departments and teams rather than the products. How do you create a customer-centric organisation when half the time people are just fighting for departmental budget?

2.     Executives take all the decisions; in traditional hierarchies we insist on executive management taking all the big decisions, yet they are usually the furthest away from the information needed to make a decision.

3.     Art of the start; Most employees in a traditional organisation have never had to build something from zero – even those in companies that were once innovative and born out of a garage.

4.     What v Why?; if your company has a true mission then you know why you are doing the work you do, rather than just having a boss who tells you what you need to do.

5.     Focus on quarters; executives never focus on anything other than the next quarter or next year at the most. In addition, they use consultants to learn about the technologies changing their business. Why can’t any senior executives actually write software or use any of the innovative systems changing their industry?

This last point is particularly important in my opinion. Executives make most of the big decisions in every company (except those who don’t conform to point 2) and this is particularly true of a digital transformation project that might change the entire direction of the business. To drive these projects forward to success requires a vision, the ability to stick to a plan, and flexibility. But if the executives don’t really understand the technologies and they are constantly worried about reporting to Wall Street then it’s easy to see how they can lose patience with a digital transformation plan that is taking too long to deliver.

The kicker, as Maarten describes it, is that truly innovative companies don’t go after what is hot today. They focus on the big unserved need that customers are going to be asking for tomorrow. As he said in his article: “If you want to win the game, you skate where you think the puck is going, not where it is currently…”

We have seen this over and over again with brands such as Apple and Amazon. They introduce products that customers didn’t even realise they needed and one year later customers cannot imagine life without them. To be truly innovative, brands need to anticipate (and almost create) the need of the customer to own or use a certain product.

Although the last point is the one that I feels resonates strongest, all Maarten’s points are valid and clearly demonstrate why digital transformation can be difficult for companies that don’t really want to change. It’s clear that a new attitude is required if large corporates are going to be able to make a digital transformation really succeed, but how many executives really want to see their business reinvented if it means their current role may no longer be required?

Let me know what you think about these thoughts on digital transformation by leaving a comment here or get in touch via my LinkedIn.