Organizations change, restructure, innovate and transform themselves constantly. Up until recently these activities were mainly ad hoc, isolated, reactive and limited in time, scope and desired outcomes.
The rather siloed and often hierarchical ways in which businesses operate and adapt/evolve/optimize are the result of a mix of human factors, organizational traditions, management views and reasons of responsibility, planning, culture, forecasting, budgeting, specialization and the very nature of business as such.
How organizations failed – and fail – to tap into the full benefits of a holistic approach
Over the last decades executives gradually have become aware that the traditional approaches of operating in disconnected and limitative ways don’t match the reality of business, workers, customers and the – by definition connected – improvement of business processes and efficiency.
The awareness that in business, as in life, everything we do, everything we feel and everything that happens in the ecosystems in which we and our customers operate, is highly joined up has been growing across various disciplines and business functions. Still, the initial efforts to have a more holistic view on how we work and conduct business, happened in – again – isolated and disconnected ways. The result is that, time after time, several initiatives failed or businesses failed to tap into the full potential of a holistic approach.
Some examples of how we tried to connect the pieces and ended in isolation
The single customer view
Marketers, sales and customer service have tried to work closer together in function of the customer. One of the ways to accomplish this was having a single customer view and connecting technologies and solutions to align their business functions, goals and operations.
What happened in reality is that the single customer view rarely led to customer-centric actions, that platforms are underused/disconnected and that this desired closer collaboration didn’t happen due to a mix of – again – human and organizational/political reasons and last but not least, because essential parts were missing in order to make the efforts pay off, let alone succeed en route to a broader goal.
The same lack of essential parts and various crucial elements is what has made several IT and information management projects fail.
IT was working too often in isolation from its key customers: the business and the user. The focus was on technology, security, managing information, getting platforms up and running and meeting complex demands, keeping into account numerous factors such as legacy IT, costs and what was expected from the CIO. Today that picture is changing.
There is a big gap between the perceived ability of organizations to unlock the value in their information on one hand and the reality on the other.
Customer service failure
In the customer service context, in the broadest sense of the word, it became clear that the customer was one and that, amid the decline of customer loyalty and even retention, being of service in a prioritized and customer-friendly way required a much holistic approach.
This awareness led to the increasing focus on customer experience, a very holistic and end-to-end given as such, and on new ways to offer service via channels customers embraced.
However, once again several parts of overall customer success and service as a key part of future business were overlooked. Businesses focused on creating amazing experiences in one area but didn’t follow up on them across the customer lifecycle. Customer service and the contact center were – and are – still seen as a cost center, the crucial emotional dimension of customer experience was often ignored and rare are the businesses that are able to involve all touchpoints and customer-facing (inter)actions and actors, in putting customer first, realizing that customer experience is not just shaped in interactions with customer service or customer-facing functions but across each ‘touch’ with the brand and its representatives.
The many gaps and leaks to close
From back-office functions to the front office and beyond, including the ecosystems of partners and stakeholders needed to make business successful: there are gaps and leaks virtually everywhere. It’s the essence of a digital transformation strategy.
Despite the reality of a highly connected customer, the end-to-end experience and the need to be truly holistic, organizations missed and continue to miss essential parts and elements.
The parts of the holistic transformation puzzle
The question obviously is what these parts are. If everything is connected, then does everything matter? No, it doesn’t. Furthermore, you can’t improve everything at once.
Last but not least, a holistic approach is not about the sum of all parts. It is about identifying the parts that matter and how they influence each other in an end-to-end way and on multiple levels.
These include people and their emotions, information and how it is leveraged, technologies, bits and pieces of processes that interconnect with others, effects of changes – whatever form and shape they take – on a variety of these and other parts, the list goes on. In fact, the technologies of the so-called third platform upon which the digital transformation economy is said to be built, are all about bits and pieces that enable to connect, USING multiple devices, APIs, algorithms, new types of networks and WITH various of these components and obviously with information, location, people, machines and the likes.
To understand how early efforts to be more holistic failed to deliver we can look at many examples: the isolated approach towards marketing optimization, the inefficiencies in supply chains, a disconnect with customer service, underperforming business process outsourcing relationships, siloed information management practices, you can add many others.
Business success requires ongoing optimization. Yet, in a connected economy isolated optimization efforts don’t cut it. More.
Digital business transformation and the true meaning of hyper-connectivity
Why does this matter so much and what does it have to do with ‘digital’, ‘business transformation’ and what we know as ‘digital transformation‘?
As mentioned each organization and ecosystem transforms, regardless of technological evolutions. From a people perspective, ‘digital’ has even lost all meaning. We don’t think ‘digital’, we don’t shop ‘digital’, we just do all these things whereby the lines between digital and physical have blurred.
However, digital technologies set something in motion that, along with other evolutions, forced organizations to not just innovate, adapt, change and evolve like they used to. And it certainly forced them to look more at ALL aspects of their business and ALL important parts that lead to not just their success but also their survival because that is what today’s hyper-connectivity is about: not just technologies and networks but most of all communities, individual experiences, connected changes in the ecosystems of our organizations, trans-divisional and trans-functional collaborations and alignments, business processes, various forms of data and information, you name it.
We live in a more connected society and business reality than ever before and “the sensitive dependence” – as we know it from the butterfly effect – within ecosystems of connected processes, business activities and human interactions is essential in transformative processes. More.
Technology, acceleration and growing gaps
Technologies, and more importantly how people – from ‘consumers’ to entrepreneurs – started adopting and using them changed the game and pace of change. And they continue to.
This phenomenon isn’t that new either and we can easily include the birth of the Internet to the long list of phenomena that require organizations to transform deeper and in a more holistic way than ever before. What is relatively recent, though, is how the accelerating impact of shifts in human behavior, ways of doing business and technological evolutions increased the gaps between organizations and people, not just in their capacity as consumers or workers. It also grew the gaps between organizations.
Last but not least, the pace at which organizations ‘transformed’ was far slower than the pace of market evolutions, customer behavior, so-called ‘disruptive’ innovations and new market entrants, challenging incumbents with a more attractive way – in the eyes of customers – to connect the various parts of a more holistic view with the before mentioned evolutions and shifts in focus in mind.
Digital transformation failure starts with missing pieces and ignoring gaps
Solving a problem or challenge usually starts with acknowledging there is one. So does seeing an opportunity and dealing with the mentioned gaps.
The most important thing in communication is hearing what isn’t said (Peter Drucker)
The time that organizations have to respond to challenges or tap into opportunities has shortened. Competition is intensive, not seeing challenges fast enough is not an option anymore and opportunities are rarely exclusive to an individual organization, let alone industry, where disruptors and competitors act fast.
Despite all the advances in predictive technologies, seeing challenges and opportunities is still a very human given, the result of being informed and collaborating, the consequence of seeing evolutions and understanding their impact, a matter of creativity and truly understanding customers and stakeholders, leadership (acknowledging challenges doesn’t go hand in hand with choosing to pretend they don’t exist) and so much more.
However, no one has a crystal ball. Digital business transformation is about dealing in a timely and holistic way with challenges and opportunities. As a lot of major challenges and opportunities are a result of the increasingly ‘digital’ characteristics of how we work, buy, optimize and (need to) innovate, getting the parts to understand both challenges and opportunities right, is critical. And it’s exactly here that we see a lot of gaps in practice that lead to digital business transformation failure or the lack of digital transformation initiatives where they are really needed. Time to start closing them.
Top image: Shutterstock – Copyright: Sergey Nivens