Digital transformation: 4 sticking points to avoid
The goal of digital transformation is to evolve a brand’s customer experience into one that aligns with the needs and desires of today’s digital customers. Doing this typically requires rethinking the way the customer interacts with the business as well as changing the way the business itself operates. Both of these require a scale of imagination and implementation that can be challenging for many large enterprises.
The COVID crisis has made these changes more critical. Prior to the pandemic, many companies were struggling to change at the pace needed to keep up with their customers. COVID massively accelerated that pace.
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4 points where digital transformation stalls
Here are four common sticking points that prevent large enterprises from delivering an effective and timely digital transformation – and how to address them:
1. Not having a clear and inspiring vision that aligns with customer needs
Three primary attributes are common across popular brands:
- They consistently meet the needs of their target customers
- They periodically do things that delight customers beyond their expectations and needs
- They stand for something that resonates with their customers
To create beloved products and forge a strong connection with your customers, you must understand their needs and pain points. Doing this requires a critical assessment of their current journey.
There are two types of pain in the customer journey: blame pain and accepted pain. Blame pain comes from negative experiences that customers blame on the brand, such as a 30-minute wait to check out at the supermarket or an employee who needs to resubmit their expenses multiple times to get reimbursed.
In contrast, an example of accepted pain is when a customer goes to a store, knowing and accepting that they’ll need to spend five to ten minutes checking out.
Solving each of these will produce different results. While easing blame pain lessens your customers’ negative feelings, solving accepted pain points means that you are actively delighting them, which is invaluable to fostering positive customer sentiment. Both types of pain present a goldmine of opportunity, so make sure you fully understand them before you envision future products or services.
Creating an inspiring vision starts with customer research to identify and understand customer pain points. Then it’s time to map a journey and brainstorm potential solutions. However, even the best creative ideas typically require multiple rounds of iteration in the marketplace to test and learn which solutions can best improve the customer experience.
2. Too many ideas and difficulty prioritizing
As Linus Pauling famously said, the best way to have a great idea is to have a lot of ideas. And having a lot of ideas is a great thing, as long as you have a way to prioritize them.
Prioritizing ideas is just as important as generating them, so if brainstorming is a part of your transformation strategy, you will need a structured process to filter and score what could be dozens or even hundreds of ideas. Otherwise, you may take on too much all at once, and a product or effort can fail under its own weight.
In addition, selecting ideas that won’t – or can’t – succeed wastes effort and money and potentially creates even larger problems, like reduced credibility or increased liability. Conversely, if you reject the best ideas, you risk depriving your customers and the company of potential benefits.
I recommend a five-step prioritization process that can be tailored to your situation:
Consolidate your ideas. Your brainstorming sessions will likely produce a large number of ideas from different sources, with varying levels of detail. Some of these ideas may be duplicates, variations, or cousins of each other. Combining these related ideas into “master ideas” will make it easier to prioritize by groups of ideas.
Consider the value that each idea offers. I recommend quantifying value across four dimensions: desirability to the customer, breadth of customers impacted, frequency of benefit to the customer, and amount of business impact on the business. While it may be difficult to be precise at this stage, it’s important to at least approximate it so that ideas can be weighed against each other. It may make sense to do some additional research to quantify the value of high-potential ideas.
Define the cost and effort for an idea so you understand the investment required to realize its value. After all, most businesses want to ensure that ideas offer a strong return on investment, so this step is important for weeding out ideas that are less practical.
Consider the level of risk. It’s essential to take some risk, but if you find yourself with multiple ideas that offer similar levels of value and require similar levels of cost and effort, the relative level of risk can help you choose a path.
Make decisions. Finally, what is in and what is out? To ease the decision-making process, consider using the concept of the Minimum Viable Product, or MVP, in which the initial release of a new product should be kept as “stripped down” and simple as possible.
You may have 100 ideas for product features, but at this stage, the main exercise is deciding which ones are so essential that the product cannot be effectively used without them. With your team, determine which features are not essential to the core value proposition and can be left out. After all, once the product is launched, you will learn via customer feedback whether users really want those features.
Let’s explore two more sticking points to avoid:
3. Technology frameworks and processes that are not designed for speed and flexibility
The best customer experiences are supported by modern technology stacks that provide two essential capabilities: secure access from any touchpoint, and the flexibility to deliver a broad range of services and capabilities.
Customers today expect to be able to interact with your brand from a diverse set of touchpoints, including web, app, kiosk, chat, etc. They also expect those touchpoints to be completely synchronized and to operate in a consistent manner.
Companies that deliver elegant digital experiences have modern, unified architectures based on microservices and common data layers. Furthermore, their systems are designed to have very near-zero percent downtime. If your company is not there yet, it’s time to make digital transformation a top priority, no matter how much pain it entails. Focus on creating a roadmap to upgrade, redesign, or replace inflexible systems and enable the evolution of the customer experience.
4. Organizational resistance to change
One of the core challenges of digital transformation is that many companies simply aren’t prepared to change their mindset, culture, or even structure. When you have certain revenue streams that are tied to a legacy way of doing business, it’s scary to think about losing that revenue.
For most of us, it’s natural to resist change, even when it’s to our detriment. We rationalize that change isn’t needed and focus on its dangers. Some even go so far as to sabotage change when it is adopted. This attitude is profoundly counterproductive: Change is essential for a business to grow – and in some cases, just to maintain its position in a changing market.
To overcome resistance to change, ensure that your transformation vision is inspiring and motivational. Keep in mind that even those who are resistant to change are more likely to support it if they create it, so include people in the process: Invite them into brainstorming sessions so their input is heard and incorporated at the outset.
Once your people are invested in transformation, make sure to celebrate successes whenever possible. Remember – everyone likes to feel that they’re part of a winning team.
[ Culture change is the hardest part of digital transformation. Get the digital transformation eBook: Teaching an elephant to dance. ]