Three Essential Elements of Digital Transformation

By now it’s no secret I hold a few contrarian views, notably: Gen Z are the ultimate disruptors, not fintech or other technology company; and when it comes to digital transformation, I am passionate about caring for table stakes, full-stop. Which has had me pondering a short piece on the three essential elements to building a digital ecosystem.

1.   Executive Belief. Okay, so, every white paper in the world says you must have executive buy-in. I say you must have Executive Belief: someone who believes in their belly that without transformation you could be out of business -- maybe not tomorrow or the next day but in their lifetime (because even when retired they'll want to know they were correct!). Years ago I was part of a team who was directed to stand up a digital offering end-to-end. Our executive sponsor didn’t just fund the effort and watch from the sidelines, she had our back. She cleared our desks of distractions; called out partners (from IT to operations) who were more interested in politics than radical change; and, most importantly, she would make tough calls when everyone else got uncomfortable. Executive support like this is rare, I get it; frankly, it may be impossible in today’s environment where privacy concerns and regulatory requirements are understandable inputs to any large effort, but you get the point about what it means to have a energized sponsor.

2.   Care for Table stakes. Sex sells. In my line of work, sex comes in the form of really cool emerging technology like crypto, AI, and VR. All of this is terrific and should be incubated but only if and also you’re caring for your bread and butter. Since we just finished two at our house, let’s use a bathroom remodel as analogy: you wouldn’t build the Taj Mahal of showers if it meant you couldn’t afford a toilet at the end, right? What I see are so many companies chasing bright shiny objects while their core transactions are still paper-based, require wet signatures, and have error/reject rates in the double digits. So, even though saying it doesn’t make me the coolest person in the room, I don’t care: Make sure the way you generate revenue today are supported by frictionless, omni-channel exchanges. It's an open secret Goldman Sachs is investing big money to not just transform their backend but leapfrog the competition. I have no doubt when the dust settles five, ten, 15 years from now those who failed to digitize their core functions will be the ones Harvard Business Review uses as infamous MBA case studies.

3.   Focus on incremental wins + have a sense of urgency. Obviously technology investments are weighed against short and long-term financial goals. It’s for this reason I am biased against costly, massive multi-year re-platforming efforts that require all else to come to a standwhile while work is done in the background. Today’s consumers expect more immediacy, which means frozen roadmaps equal death. Finding ways to stand up smaller efforts that result in MVP apps and small redesigns to show clients you’re listening is critical. How do you know something is too big to execute against? A simple look at your projected launch date will tell you: 12, 18, 24 months, fine. Longer horizons should beg serious questions of viability. I suspect my Costco debacle is the result of a larger IT makeover that's stuck in the mud; I suggest they'd be better served to keep things simple and fix existing processes one by plodding one.

According to a CIO.com study in 2017, half of 400-U.S. based senior executives believe their companies aren’t executing on even 50% of their digital strategies; and one in five say these initiatives are doomed from the start. In the end, the race for large institutions or incumbents or let's just say whoever isn't Amazon will come down to who figures out how not to fail, even if there are up hiccups along the way. As Malcolm Forbes said: "Failure is success if we learn from it."

Note: Views are my own, not those of my employer.

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