Angie Carillo on Why Digital Transformation is a Matter of Strategy Not Technology
Digital transformation is the future of business. When you look around, almost all business processes have an app. Companies have adopted technology exponentially in a bid to improve efficiency and effectiveness. Yet, it concerns that only 21% of companies think they’ve completed the digital transformation. Only 70% of companies either have a digital transformation strategy in place or are working for one.
Digital transformation is not a fad. Instead, it is a reality that continually evolves as new digital technologies enter the market. Almost every industry has a story to tell about companies that outdid their competitors through leveraging digital technologies. Moreover, increasing digitalization has become a disruptive process that’s altering how companies interact, compete, and create value. Therefore, companies must learn to innovate and adopt technologies if they are to survive in the market.
Angie Carrillo is an experienced digital transformation guru. Angie was chosen as one of the Next Generation Women Leaders by Mckinsey & Co, a consultancy firm that leads to digital transformation. Angie Carrilloknows every detail on digital transformation and has started businesses in Silicon Valley and NASA Ames Research Park. But what is the secret behind Angie’s thrive in digital transformation? Well, digital transformation is not about technology. Companies are making the mistake of investing millions into ‘digital transformation’ initiatives. Unfortunately, a high percentage of those initiatives fail because the companies expect technology to solve their problems. A recent survey showed that 70% of digital transformation initiatives were unable to reach their goals.
What’s the Issue?
For starters, companies fail to realize that they need to work on a digital strategy first before investing in digital transformation. This strategy should delineate how the company plans to align technology investment with business goals. Secondly, firms need to tackle internal issues before adopting digital solutions, e.g concerns over job loss due to the stimulus that the government has given big companies causing them to lay off people. For instance, the US gives $50 billion to airlines and 90,000 people are laid off. And guess what? The result has been the worst unemployment rate ever in history. Digital transformation has usually been an excuse for justifying layoffs, however, management should have in-depth knowledge of how new technologies would affect customer experience and the company’s culture.
Digital transformation is a matter of strategy, not technology. This strategy starts with a growth mindset. If there’s a looming fear in your organization that robots will take over jobs, digital transformation will be a struggle. When employees see technology as a threat, they may consciously or unconsciously resist changes. Similarly, if the company adopts digital transformation and becomes ineffective, they may be too willing to abandon the project. As such, it is integral for the company to address looming fears and to communicate digital transformation as an opportunity for employees to upgrade their skills.
The second step for companies is to adopt a Silicon Valley-type of mindset. Silicon Valley companies have an agile decision-making process, flat structures, and rapid prototyping. A culture change is essential because the process of digital transformation is uncertain. Some companies have reported a disconnect between strategy formulation and implementation. Similarly, traditional hierarchies may interfere with the operation of implementation. As such, it is best to adopt a flat organization structure that will allow agile decision making.
Companies great and small have struggled with digital transformation. One example is when Nike initially attempted to reap the benefits of digital transformation by adopting sensors to collect data on customer activities. The company planned to synchronize the sensors to their web platform. This innovation would have enabled Nike customers to give feedback and suggestions on improving their product’s performance. The solution would have also made it easy for customers to access a virtual community of coaches, friends, and family. Although the company’s digital transformation process was promising, they had to abandon the project. Nike discontinued its Nike+ product, and it’s only recently that they attempted to leverage digital technologies for a different goal.
Nike’s case is proof that digital transformational strategies are uncertain. It seems that by the end of the day, the success of the project has to do with:-
a). Organization change capacity
Digital transformation is not for the faint-hearted. The unfortunate reality is that companies are struggling to implement their preferred technologies successfully. Still, it is important to be strategic when innovating and to get your employees on board with the process. Companies that have succeeded in digital transformation did so because they prioritized changing their people’s mindset and the organizational culture as well. Such companies focus on changing the process before leveraging digital technologies. Companies succeed when members understand that it is the people’s mindset that drives the future of the organization and the technology and not vice versa.