A Compass for Digital Transformation

Leaders of successful digital transformations drive holistic changes across six core areas: Strategy, Structure, Skills, Systems, Support, & Security.

A Compass for Digital Transformation
Photo by Milad Fakurian / Unsplash

The journey of digital transformation is challenging, fraught with obstacles, and notoriously difficult to complete. In fact, research conducted by leading business consulting firms (McKinsey, Bain, KPMG, and BCG), puts the risk of failure for digital transformations between 70% to 95%.

In a territory that has such a high risk and likelihood of failure, what can leaders do to be successful in their digital transformation journey?

Digital transformations that find success are led by business leaders who are committed to making profound and structural changes, instead of treating digital transformation as a one-off initiative or a one-time investment.

Pivoting to a digital business model requires leaders to chart a course for holistic transformation across the SIX core areas below.👇

To digitally reinvent the business, leaders should start by defining the overarching business and technology strategy that will guide the roadmap and journey. The strategy lays a clear business case and also outlines the business objectives behind the drive to "digitize' your products, services, customer experiences, and business operations.

Trying to execute a digital transformation within the constraints of a legacy organization structure can feel like fitting a square peg in a round hole. To be effective in delivering a digital pivot, leaders have to evaluate and reshape the structure of their organization. This will ensure that within the organization, every group's talent, incentives, and goals can be aligned with the new digital business model.

The best digital strategies and the most efficient organizational structures can fall flat and be rendered useless if they are not supported by the appropriate talent pool and team culture. Leaders need to take an active role in building team culture, skills development and hiring decisions. Over time, a digital transformation cannot be sustained unless the organization structure is populated with the right talent.

In order to digitally scale-up products, services, and capabilities over time, the business requires a strong foundation of systems. These systems typically include software platforms, technology infrastructure and also business processes. Depending on the type of business and objectives of the digital transformation, a significant amount of investment is required into systems that will 'digitize' your products, services, customer experiences, and business operations.

As the business reinvents itself digitally, the concept of "support" for internal and external customers must be reshaped and rethought. Once the internal business processes become more digitized, appropriate scaling of tech support has to be implemented. Additionally, with products, services, and customer experiences becoming digitized, the organization has to redefine its customer service approach and vendor relationships.

With increasing digitization, the business has to also contend with new security attack vectors and considerations for business continuity. In addition to building internal cybersecurity capabilities, the business must include the security and continuity of mission-critical digital services in its disaster recovery, business continuity and risk management plans.

The approach for transforming each of the six areas can be quite nuanced and will vary based on factors such as the industry sector, digital maturity, and the business's current state. For brevity, detailed tactics are not covered in this post.

The key takeaway for business leaders is to use 6S as a strategic compass for navigating their digital transformation journey.

The 6S Compass For Digital Transformation