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Delivering digital transformation - with innovation expert, Dan Salmons

by Jon White March 26, 2018
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Our ongoing series of speaker-led breakfast round-tables always leave us with a host of thought-provoking ideas and new business understanding. Our recent event with innovation expert, Dan Salmons, was no different with a range of insights to digest on ‘how to deliver digital transformation’.

With his impressive background, including having been the brains behind contactless payment at Barclaycard, CEO of What If! Innovation and now Director of Mortgage Innovation at RBS, Dan spoke from a position of great experience on all things digital and best practices for implementing a business strategy.

“You don’t sell a TV without HD.”

He started with exploring “why now?” by asking why digital is the hot topic of the hour and the thing being discussed in every boardroom and future strategy plan. Digital, as Dan was keen to point out, is nothing new. If anything, it is now decades old but has reached the ‘HD / airbag moment’ of becoming commonplace and expected. To elaborate; in the 90’s car manufacturers would impressively tell you that your car came with airbags and HD was a big sell for TVs. Now, however, these are a given and are hardly ever mentioned as a distinct selling point.

Being digital and having a digital presence has reached the same saturation point where people expect it, and they expect it to be good. Businesses, therefore, have to face up to the fact that they really can’t afford to ignore it anymore and it has to be part of their ongoing strategy.

Dan carried on by talking about 3 main subject areas; digital strategy, what it means to be a digital company, and digital transformation.

 

Digital Strategy – For the sake of what?

His first piece of advice was, when it comes to digital innovation, “don’t do it”! Or at least not unless you really have to as, generally speaking, it is expensive and very risky and the first thing you should be asking yourself is “can I avoid it?”

But to do it right and when dreaming up a digital strategy, you really have to bear in mind the thought process of “for the sake of what?” to avoid going in the wrong direction or adding digital where it isn’t really needed. You need to ask why you are creating a digital strategy; is it to break into an adjacent market? Is it to save cost? Is it to re-engineer the back office? etc.

However, the problem in business with asking questions like this is that you need to remind the stakeholders that you can’t blueprint this. In fact, there very definitely should not be a blueprint as the minute you do or the company tries to impose one, then you are destined to fail. Digital strategy, according to Dan is about picking out key thematic levers that you want to pull in some way and build capabilities toward these, acknowledging that you won’t know what the end product will look like until it happens.

On this point, Dan used an example from his own background whilst at Barclaycard. Here, he decided that biometrics was not a lever he was interested in, whereas contactless and mobile payments were. He had no idea how these would manifest back in 2007 but, by picking these, he was able to make small incremental changes to build a capability focussed in this direction so that, as things became clearer, they were on the front foot and able to act quickly.

However, digital innovation involves pushing one or two things a long way up the curve to stop them from falling back down, rather than nudging multiple ideas; if you roll a six in backgammon, then you move one piece six places not six pieces once.

 

What it means to be a digital company – long-sight and short focus

Dan then emphasised the vital need to look at who is in control at the top of a business and how they approach digital innovation. Where “product” sits can also be key. The digital world moves so fast and launches are no longer a twice a decade occurrence, but rather a three times a day thing; so whoever is in charge of ‘product’ can often be the lynchpin for digital success. This person often sits between a myriad of disparate business functions; Tech, Marketing, Strategy, Operations, Sales etc. So ‘product’ and the ability to figure out the product proposition is very important.

The strategy has had to adapt around this, so thinking more than 3 years ahead is becoming increasingly obsolete. A 2040 strategy is wasted effort and a rolling 18-month strategy with inherent ‘thought nimbleness’ is more effective to enable a long-sight and short focus. This approach will hopefully keep businesses from a narrow-minded vision of their own future and enable them to react to the incredibly fast-paced digital maelstrom.

Similarly, Dan warned that customer insight cannot ‘just’ be research and fully believes in discovering the emotional truth of the customer decision-making process (read our last Dan Salmons blog to find out more on this theme). The emotional, and sometimes nonsensical, core customer insight is the thing to innovate from not just what a bunch of people have arbitrarily filled in on a survey!

 

However, having the best strategy can count for nothing unless you hire the right people into the team. Similarly discussed in our previous breakfast with retail innovation expert, Alan Treadgold (read more here), the right culture is vital. If a business does not facilitate its employees to move quickly onto new things and empower them to jump at new opportunities, then they are potentially doing something wrong.

 

Digital innovation – find your North Star

You then need to carve out the breathing space (from the fee making, bill paying commercial aspects of the day-to-day business) and also invest enough funds to allow for digital innovation to occur. This needs to happen somewhere in the business that is not affected by the white heat of day-to-day sales and can afford to experiment a little. In terms of funding, Dan is a fond proponent of the “wash its face” model; i.e. as long as the innovation team/incubator etc. doesn’t lose money, then that’s OK.

Then he suggests starting small – don’t get ahead of yourself and fall into the trap of big blueprints and changing the world in one fell swoop. Rather, find the small innovations, the small changes that build different more agile capabilities and thus enable you to find the bigger themes and act upon them as time goes by. This breaking down of the mountain can also help to massively de-risk the projects in the eyes of those who hold the purse strings.

Someone at this point asked the question of how to define success in digital transformation and how to rally a business behind the idea. To this, Dan explained that he likes to use a ‘North Star principle’; a guiding light and purpose without falling into a blueprint mentality.

But this is a constant challenge; you have to find the right rallying call and the right articulation of this to avoid a wrong answer further down the line. It is about diffusing the idea of digital into a business’s DNA. Think about things in less scary, more understandable known quantities; think risk mitigation, future proofing, R&D, capability building. By viewing in these terms you can perhaps start to build a constant framework and mentality of digital innovation. This enables employees to be on the front foot when the timing is right so that they are fully able to fuel up the right spark when it comes along.

 

Dan summarised by reminding us that ideas are cheap and that there is no substitute for hard work – digital innovation is not some sort of divine intervention, some spark of genius / bolt out of the blue. It is first and foremost 99% perspiration, working to create an atmosphere that best enables a business to be at the right place at the right time it is rarely if ever pure luck!

 

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