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7 months ago by Katharine James

What’s Needed For a Successful Digital Transformation Programme

Business Transformation

​Not so long ago, many a languishing digital transformation programme found itself being pushed – very much uphill – by a valiant CIO or CTO, with little engagement from the wider business. In September, BCG published research indicating a seismic shift in attitude.

Now, over 70% of digital transformations are sponsored by business leadership rather than the CIO or CTO – “Everyone has woken up to the fact that digital is key” – and BCG expects to see digital transformation becoming “one of the most significant determinants of competitive advantage as the economy recovers.”

In the race to accelerate digital transformations, business leaders are taking advantage of the rich knowledge and experience of the UK’s mature freelance market, plugging essential digital expertise into key gaps to enable transformation that is owned and driven from within.

As we mentioned in a previous article on accelerating digital adaption, digital is the toughest type of transformation: over 70% fail. Our network of freelance digital experts have delivered across a huge range of transformation initiatives; and we’ve been speaking to some of them recently, to understand how firms can avoid pitfalls and lay the foundations for programme success.

If you want to transform, make sure you’re not just changing

For lots of organisations, digital is still purely about product: they’re not fully bought in to the idea of pivoting, of becoming digital.

Akmal Asghar, Freelance Digital Expert

There is a fundamental difference between business change and transformation. Change creates a better version of the past. Success is typically measured in terms of efficiencies and cost-savings. Transformation focuses on a new vision of the future. It is fundamentally creative, inventive and, to an extent, ambiguous; and although efficiencies, cost-savings and increased profitability often result from transformation, they are rarely the stated aim.

A company developing digital products or implementing new cost or time-saving technology may well be digitizing. It is not necessarily altering its vision of the future. It is not necessarily preparing to disrupt the market or protecting itself from future market disruption. It is not necessarily transforming. It is not necessarily becoming digital.

Create a clear, strategically aligned vision and secure stakeholder buy-in

I’ve worked with a lot of clients who understood that there was a need to transform but were unclear about the broader vision – about where they personally were meant to land, or what the new busines model would look like. There are inevitably a lot of conflicts involved in digital transformation – for example letting go of legacy revenue to build new income streams – so at the highest level you need to know the trade-offs you’re prepared to make. If you don’t, it’s impossible for people to make clear decisions.

Lou Gautier, Freelance Digital Expert

A clear vision facilitates emotional, imaginative and practical buy-in. It is the touchstone for the programme capability assessment, budget, roadmap, metrics and KPI’s. Starting a programme without a clear vision is like building a house upon the sand.

Tell me: Why? A clear vision articulates both what needs to be done and – crucially – why. Challenging the why, asking why are we really doing this? How will it create value for customers – what’s the evidence? How is it aligned to the overall business strategy? What happens if we don’t do it? – is vital. Often the reasons we say we are doing something are not the real reasons – and the real reasons may mean we actually need to do something else. Why? is a process of discovery.

Securing buy-in: Once the what and the why are established it becomes possible to understand, from a macro perspective, how the transformation will impact the broader business and who – which key stakeholders – need to be at the table from the start, so that the vision can be shared and finalised in partnership. This means challenges and interdependencies that may otherwise be missed can be anticipated and the time-wasting and tension arising from mis-alignment can – hopefully – be avoided.

After completing a transformation project at The New York Times, Mark Thompson, the former CEO said “Ultimately, through lots of kicking and screaming and argument, we ended up with a genuinely shared vision … almost a creed, a set of articles of faith….They weren’t imposed by me on everyone else. My job was much more to pull it out of the organization rather than to impose it. And they executed against it because they’d come up with it.”

Ensure alignment with the wider business: time, money, metrics

"Let’s say you’re working on a product transformation: the marketing and tech teams are talking to each other but the sales function hasn’t been involved, so there’s no pricing conversation happening … Accountability is also an issue – particularly in large corporations – and often leaders are not aligned in terms of motivation, which means resource is badly allocated and people end up pulled in two directions.

Ed Short, Freelance Digital Expert

A clear vision at the leadership level is no good if it doesn’t filter through the programme: strong communication and alignment is vital at every stage to ensure successful delivery.

Digital transformation often involves working at pace with high levels of ambiguity, and metrics and KPI’s should be carefully designed to give people continued confidence that they are on the right track. Similarly, budgets should be rigorously thought through and stress-tested.

Transformation can be a lot more expensive than people anticipate – for example in digital product development, often you have to go through multiple iterations. Then there’s the cost of scaling.

Akmal Asghar, Freelance Digital Expert

Be clear about your current capabilities and where you need to build

It’s unlikely that a client will have all the skills they need for a successful transformation – so they need to ask: how do we bridge the gap in the short term and the long run?

Lou Gautier, Freelance Digital Expert

Historically, many businesses have hired consultancies to design and manage their transformation programmes. Now, leaders more likely to proceed with their own people bringing specific expertise on board – in the form of freelancers – where and when it is needed. In our experience, irrespective of industry or programme size, there are three freelance skillsets that are commonly sought out.

  • Digital transformation experts. Businesses who are new to digital generally don’t have specific digital transformation experience in-house. DTE’s are versatile specialists with broad cross-industry experience from strategic planning to operational implementation. They typically combine consulting training with strategic and operational industry experience and have a track record of successful transformation projects under their belts. DTE’s can be useful at many stages – from the ‘outside eye’ role of challenging and defining vision, scoping the project roadmap and coaching senior leadership; to evaluating and advising on next generation technologies or potential M&A targets, to programme, project and change management.

  • Innovation and product specialists: Businesses with a legacy-style product / innovation process often seek out innovation and product specialists with digital experience. Fluent in design-thinking and delivering iterative test-and-learn processes they can work across ideation, incubation and scale-up of new initiatives. (Drawing on external expertise to run successful agile product development processes can also sometimes be a way for leaders to prove the concept of a digital ‘way of working.’)

  • Data strategists, digital marketing and analytics specialists: Digital transformation creates a lot of data. This can be hugely valuable if you know what to do with it, but a lot of businesses don’t have the expertise in-house. They don't know how to 'fish' their data or to make meaningful analyses and while it is possible - and important - to plan to build these capabilities internally over time, a fast start is vital.

Focus on generating useful data from the start

Focus on value: What's the most important data? What’s the data with the biggest impact on your business? What are the key metrics that really matter? Start here. Teach the business how to use this data – this builds buy in, acceptance and ultimately the trust that creates a space for dialogue – and bring more and more in scope.

Lou Gautier, Freelance Digital Expert

Many companies born before the digital era lack the knowledge, experience and technical expertise to generate and use data well. They know they should be using data to listen to their customers – that if they can just get it right they will be able to create an instant feedback loop that improves services in real time / mine for insights that will open the door of discovery to some radical new products. But if there’s no structured plan in place, this quickly gets overwhelming. A lot of businesses will hire digital marketing capability as one of their earliest moves in a transformation. Then they can start asking the right questions.

According to research published by McKinsey, the Chief Analytics Officer is becoming an increasingly important role in digital transformations and many firms are creating digital centres of excellence to provide centralised shaping of digitization. Starting to build a layer analytics capabilities should be a key area of focus for firms early on in the transformation journey, with modelling and data science to follow.

Daniel Henry, CIO of McDonald’s reiterates the importance of data within the company to every new joiner: “At McDonald’s, we view data as a strategic asset to the company. In fact, it’s so important to us that when someone starts at McDonald’s, we give them a data map during their orientation to teach them how to access our data and whom to call for help. We start by telling people where to find and how to understand the data, because we want it to be part of everything we do.”

Commit to a digital mindset

We're terrified of failure – but you don’t change anything unless you fail. Leadership has to create an environment where people feel safe to try new things knowing they are going to make mistakes – where you can fail without it defining you as an individual. SMTs need to celebrate success, share failure and create that collegiate experience.

Ed Short, Freelance Digital Expert

Most firms seeking to transform have business models, operating models and processes that were designed for the non-digital economy. Lengthy planning and budgeting cycles stymie the ability to operate at pace and change direction; employees are used to working in silos within the limits of job descriptions rather than to objectives which allow for cross-organisation collaboration; innovation takes years rather than months.

Inserting digital capabilities into a legacy business and operating model without changing that model is unlikely to result in successful transformation.

To thrive in the digital economy, a business needs to respond rapidly to changes in the market and in customer behaviour. This means evolving an agile, digital mindset: changing business culture and practices at a fundamental level to embrace fail-fast innovation, iterative test-and-learn processes, quick decision-making and a collaborative, data-driven customer-centric approach.

Digital is not just about tech, it’s not just about clever kit. If you want to achieve a real digital transformation, the thing that really has to change is mindset. People need to adopt digital mindsets. They need to become digital.

Akmal Asghar, Freelance Digital Expert

Freshminds manages a network of strategic and consulting expertise. Tap into analytical skills, uncover hidden insights with research or answer business critial questions with a consultant on demand.

If you're interested in talking about your digital transformation programme, hiring on a permanent or project basis, or managing a research project, then get in touch to talk more.

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