Organizations are digitally transforming and will continue to do so for many years to come. With more digital technologies being embraced and becoming mainstream soon, the capacity to transform, innovate and unlock the value of these technologies takes center stage.
Although the digital technology dimension as such remains important it’s clear that digital transformation is not about technologies as such.
It’s not just about the scale and speed at which organizations – established and ‘disruptive’ ones – will be able to leverage these technologies from the perspective of business and stakeholder goals in the so-called DX economy (DX stands for digital transformation). It’s about developing, enhancing and/or valuing core business competencies for the years to come and valuing the business assets that were too often overlooked. That development of new capabilities is key in a digital transformation strategy.
Change is a constant – develop the business competencies to embrace it
Even if we are going to continue seeing a lot of attention to all the newer technologies, from the Internet of Things to advanced analytics, robotics and artificial intelligence, organizations should look beyond them and focus on the core reasons why they digitally transform.
Because underneath and after digital transformation are challenges that are far more fundamental to thrive once ‘digital business‘ is just business, a ‘digital customer‘ is just a customer and ‘digital’ disappears from our vocabulary as it becomes part of a new normal.
This new normal obviously will change as well. Change is constant and in reality there is no true normal nor equilibrium, it’s just a pause and a fictive state of less apparent challenges and changes.
What the next challenges and evolutions will look like and how the perceived state of equilibrium will feel like is unknown. We predict, we see trends, we expect and we warn. We feel we know what the world might look like 20 years from now but we simply don’t know. A big data privacy backlash, a fast spreading sense of digital fatigue or any other unexpected evolution in spheres that have nothing to do with technology at all and predictions become useless.
The matter of the fact is that life, the economy, business and people are far less predictable than we would like them to be. And herein lies the true opportunity of the digital transformations organizations are going through today: in (further) developing the business competencies to acknowledge the predictable much faster, be able to deal with the unpredictable, create the new – temporary – normal of the future and, last but not least, develop the capacities which are needed for continuous change.
Uncomfortable truths: digital transformation as simply catching up
Even if several digital transformation projects focus on innovation capacities, increased agility, higher responsiveness and rethinking the organization, its processes and its place in a broader ecosystem, most digital transformations today de facto are essentially about catching up with uncomfortable truths and predictions that have become realities years, and in many cases even decades, ago.
One can, for instance, hardly argue that the call for enhanced customer experience, a core driver of many digital transformation projects, is new. Even long before the practice of customer experience management existed, it became clear that an utter customer-centric focus with a focus on experiences and emotions, on top of simply meeting basic customer demands, was a necessity and condition for future business success.
So, why has it taken so long before business leaders started seeing that and did they wait until it was almost too late (and for many far too late) in organizing their organizations better around this simple fact? Why did it take so long to adapt to already visible changes in consumer behavior? Why has the clear and ongoing impact of digital evolutions been missed by companies that do not longer exist because of them?
True, the advent of digital technologies, “empowering” consumers to demand to be simply respected and “enabling” organizations to meet customer needs better, plays a role. True, the speed at which digital technologies were adopted or used by innovative companies took many by surprise as it accelerated and continues to accelerate.
However, no matter how you turn it, organizations in far too many cases waited until they reached a state of urgency and emergency because they didn’t want to see the uncomfortable truth that flaws in the way they were organized, (didn’t) meet customer and stakeholder demands or failed to step up their pace.
Avoiding a new state of emergency: from responding to developing better business competencies
“Digitally transforming” to better serve the “digital customer” and improve the “(digital) customer experience” is just one piece of the digital transformation reality out there today. And you can even fully remove the term ‘digital’. Transforming to better serve the customer and improve customer experience in essence goes far beyond anything digital. Responding to the accelerating pace of innovation is also just a part of the overall digital transformation picture. There is much more.
Yet, the true mission of organizations and in a context of ‘digital transformation’ again another opportunity (note ‘again another’), is to develop the capacities they need across the board and had to develop far sooner. By doing so they won’t have to simply catch up in the future but develop all the other competencies they need in a world where change is eternal and equilibrium a false sense of comfort.
Regardless of changing technologies or customer realities, regardless of digital disruption and of challenges ahead, these capacities will matter far beyond digital transformation where they are of the utmost importance.
Among the business competencies to develop for a digital information age and beyond are:
Innovative capabilities by staying close to evolutions and changes in the business ecosystem, society and obviously the customer (and the customer of the customer), whereby innovation requires an understanding of the forces and evolutions that drive the opportunities for better, easier and new ways to build unique competitive benefits.
An enterprise-wide and even ecosystem-wide competency of ubiquitous, connected and holistic optimization whereby constant measurement, stakeholder involvement and optimization lead to an ability to constantly improve, taking into account that everything is connected, and silos stand in the way of all forms of true overall and connected business optimization.
The capacity to fully focus on the creation of value by eliminating archaic processes and tasks that add no value but must be done because automation and optimization are lacking and workers overlooked, realizing that de facto workers are wasting valuable time looking for essential information and tools they need to simply work.
Leadership skills and organizational business competencies, enabling to decide, act and scale fast. Even if more agile and action-oriented cross-divisional and horizontal ways of getting things done are often needed, vertical organizational approaches and disconnected boardroom mentalities continue to persist.
An increased capacity of agility and responsiveness whereby short-term actions can be taken and mid-term to long-term strategies revised based upon real-time evolutions, moving away from fix three year or five year plans.
The ability to better integrate and connect information management excellence, people and business processes, realizing that information excellence and business process optimization are two core and integrated elements of the activation of technological innovations and all forms of human business interaction and the capacity to be more responsive.
The capacity of reacting fast to often unexpected changes in customer/stakeholder expectations and behavior in a reality where disruption is the change in power and balance when shifts in value happen between individuals, between companies, between customers, within companies and inside ecosystems and the value chain, to quote Charlene Li from an interview. Being able to predict these changes is the next step.
Rethinking and reorganizing the business in order to reap the benefits of emerging technologies instead of being disrupted by them. This starts with looking at all aspects of these technologies, their potential impact and ways they can enhance the business across all layers. By definition this means the rapprochement of ‘the business’, IT and customer-facing functions, regardless of how it’s done. Remember: it’s not the technology that matters but what you can do with it.
The capability to extract and leverage the right data for the right reasons better and faster, keeping into account the mix of business goals and the ethical and human dimensions regarding data by avoiding, among others, the tradeoff fallacy and misinterpretations of not just data but also and most of all the “why’s” behind it. Data as such is useless. Analytics, integrations and outcomes matter most, keeping into account people, trust and security, while being clear about the purpose for what goals which data is used. It’s not the increasing volume of data as in “big” data that matters nor the speed but the actions and decisions taken upon it and taken during the processes leading to these actions. Acquiring data excellence is a broad and holistic given, going far beyond the strict data-related actions.
Learning from the past and missed opportunities
There is a genuine risk that organizations who go through digital transformations focus too much on the technologies and processes alone while organizational changes and genuine changes across silos, functions and departments don’t evolve to be in line with the development of much needed new business competencies.
As mentioned before it wouldn’t be the first time they let go of ‘again another opportunity’ to do so. Here are some examples of how they missed these opportunities before.
Businesses had the opportunity to become truly customer-centric many decades ago. Yet, even with (social) CRM they often didn’t even succeed in gaining a single customer view, let alone to act upon it or let it steer organizational change. Will it be different now that the impact of the (digital) customer experience is crystal clear?
Organizations have had the chance to enable customers to find the essential information they are looking for since decades. Yet, still today dealing with a contact center or trying to find basic information, in most cases proves to remain a pain as often even customer service reps don’t know which information sits where and business processes get interrupted because information misses or isn’t digitized or available where it should be fast enough?
We know since many decades – from long before Internet and mainstream technologies existed – that in order to optimize organizations need to have a holistic approach concerning business optimization across all functions and parts of several chains. The lessons of Total Quality Management (TQM), to name just one, however didn’t result in an enterprise-wide focus on optimization of business processes, customer experience or any other aspect, even if the key trait of business reality and certainly of digital business is that everything is connected. Still, optimization is done in siloes, even in sub-segments of optimization on functional levels such as marketing optimization where silos are paramount.
The choice: new business competencies as part of your DNA and organization or miss another boat
The main question is whether this time it really will be different and whether agility, innovation, customer-centricity, responsiveness, constant optimization, digital maturity and information excellence will become capacities and part of not just the organizational DNA but also the organization as such, or – once again – will remain a missed opportunity in the post digital transformation economy.
Because that day will inevitably come: when organizations leveraged digital technologies and their potential in developing new business models, reworked their processes, tackled the challenges of a ‘digital first’ customer and stakeholder, and innovated.
Even if technologies will continue to come and no one really knows how business will look like in 20 years from now, the key question for those who still want to be around then will be how the developed those much needed business competencies.
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