5 ways leaders can maximize the value of digital transformation

Tuesday, February 14, 2023

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Technology has been growing exponentially for years, doubling by various measures every two years. Industry experts predict digital transformation activities to exceed 3,700B by 2030, with a compound annual growth rate (CAGR) of 23.6 percent. Given this growth rate, business leaders must continuously improve leadership talent, strategic partnerships, and organizational capabilities.

Broad interest in digital transformation as a strategic focus has always driven demand. Many organizational activities, such as effective organizational change management, program management, and large-scale delivery frameworks, also remain relevant. The speed with which new transformations are needed to meet customer demand, changing demographics, and competitive pressures require ever-changing leadership tactics and skills.

While specific technical skills and a track record of success are valuable to leading a successful transformation, the ability to create and maintain a dynamic culture is equally important. The following five areas will help leaders build and lead teams that align your organization’s mission, vision, budget, people, technology strategies, and measurable outcomes.

1. Become an expert change manager

There is no boilerplate approach to managing change. Organizational change management (OCM) plans will be unique to each business and influenced by myriad factors, including current leadership, prevailing culture, business objectives, and existing technology.

Understanding OCM philosophies and tactics will provide a solid foundation to evaluate current needs, execute the required analysis, and generate the routines and outputs that mark effective OCM programs with a focus on communications and iterative refinements.

As a leader, you should strive to be a subject matter expert (SME) in your functional discipline and someone who can support the delivery of business goals. Organizations can help leaders become SMEs through Agile, project, program management, and OCM training. Many companies also partner with consulting organizations to gain specific skills that support business objectives and mentoring initiatives. This combination can yield unique frameworks that help your organization meet individual business needs.

OCM budgets tend to be addressed last and are the first cut when things get tight. Infusing OCM tactics into a delivery culture as standard parts of work outputs will help to ensure continuous infusion into transformation programs. Specific training checks, communication outputs, or common deliverable creation can be integrated into routines no matter your larger delivery frameworks (i.e., Agile/Scrum, waterfall, custom methodology, etc.).

2. Learn to execute/influence strategic consolidation

Decluttering the digital transformation journey enables organizations to focus on the critical path. As a leader, you should be able to both create and streamline operations.

Service providers, technology platforms/products, processes/methods, and cross-departmental goals must be combined to maximize efficiency. This should be a regular part of your organization’s continuous improvement cycle, but doing so during transformation will help create fertile ground for your efforts.

The following areas of strategic consolidation will help you create the right environment for dynamic results:

Service providers – Organizations tend to accumulate overlapping relationships, further complicating efforts. Regularly and thoughtfully manage and intentionally prune these relationships.
Technology platforms/products – Maintaining a clean enterprise architecture where technology has a clear purpose, internal ownership, and roadmap is crucial. Organizations that decide on a methodology and then execute and maintain it rigorously will usually set themselves up for success.
Process/methods – Different processes and methodologies tend to pop up frequently across organizations. Governance, reporting, and communications will become untenable without a deliberate approach. So define a non-duplicative set of practices across the business.
Cross-departmental goals – Ensure that “digital” is included in all parts of the business and that goals are aligned. If no top-down alignment of goals is provided, focus on proactive coalition building to gain traction. Anything less than 100 percent alignment is unsatisfactory.

3. Be a digital practitioner

A deep understanding of the user experience is vital: It promotes better decision-making, supports the development of a user-centric culture, and helps to foster engaged and trusting teams. Having a technical background is a plus but is not necessarily a requirement.

Consider these tips to create a strong foundation:

Walk in the user’s shoes – Whether your user is an internal department or a consumer, spend time working or engaging in current processes and products to understand where things are starting.
Become an active tester – Dedicate meaningful time to testing solutions. It will provide valuable insight and connectivity to the transformation’s results.
Engage user testing of prototypes – Participate in user testing engagements where applicable. This will allow you to see firsthand whether transformations have an impact.
Become an everyday user – Where applicable, become an everyday user of any solution created. If you would not engage the new process, technology, or product every day, why would anyone else?

4. Consume, understand, and interpret data every day

Mechanisms to collect data related to products and measure outcomes should be a part of every transformation effort. The data is a key aspect of validating assumptions and should be integrated into efforts at the team level. Building a plan and communicating with data removes the noise as you lead teams, engage stakeholders, and make adjustments that meet end-users where they need to be.

The following actions, incorporated continuously, will help to improve your transformation’s impact and results:

Define the data – Define a data collection strategy across processes and products. Determining who has access to what information, when it’s collected, where it’s distributed, how it’s gathered and at what cost, and why you’re collecting it will set teams in the right direction. Ensuring that this information is leveraged at all levels is also essential.
Align the data – Determine how this data aligns with operational excellence, OCM activities, risk management, product roadmaps, business requirements, and communications. Each factor can be viewed as a persona you can map to generated data.
Review and reset – Recheck and reset your strategy and outputs regularly. Being able to tell the story of how the data drives the next steps creates alignment, trust, and opportunities to reach a consensus quickly.

5. Develop and lead a formal risk management process

Creating and leading a robust risk management strategy is often overlooked, but you must prioritize it as a leader. Being able to predict the future, mitigate risks, and align risk management activities to ongoing leadership routines is a higher-order capability that can have a vital impact.

A solid risk management strategy will support positive transformation outcomes, especially as free-spending on digital starts to swing back toward careful consideration. Here’s how to develop one:

Identify risks – If you are starting a new transformation, your program is at risk. It is likely behind schedule, trending over budget, and has misaligned outcomes vs. objectives (whether realized or not). A transparent and thoughtful curation of risks will provide a foundation.
Develop mitigations – Risk identification alone only provides a list of considerations. The next step is to create and follow through on plans that actively address these risks. Be meticulous and thorough.
Measure, report, rinse, and repeat – Risk frameworks are often started but not maintained. Transformation programs take twists and turns that require continuous effort to analyze and react to changing circumstances. These activities often inform change management, technical strategies, vendor alignment, and how we use data.

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