Written by Andrew Ranson
Digital transformation doesn’t happen overnight or all at once. It’s not an all or nothing proposition either, but if you don’t get on the path, you risk crashing and burning in the long-term. In a recent global CapGemini/MIT study of over 400 global companies, the what’s and why’s of digitization were examined. The results of the study were plotted on a chart where the horizontal axis was called transformation intensity, and the vertical axis was called digital intensity.
The companies in the bottom left quadrant showed neither transformation intensity nor digital intensity. The top left quadrant included companies that presumably spent a good deal on technology tools, but did not match that effort with transforming their processes, behaviors, and cultures. In this post I’d like to focus on the bottom right and top right quadrants and suggest a glide path to help guide decision-making as you work to digitize your organization.
Technology mastery is the ability to apply technology tools as a weapon to beat your competition. The tools themselves continue to improve in functionality, ease-of-use, and power, and yet many organizations still fail to derive the value from their technology investments. Why is this, and what can be done to get on the right path? I believe this study points the way.
Companies in the top left and top right quadrants respectively showed +6% and +9% revenue against an index compared to those in the other two quadrants whose revenue was below the index. But, profitability and market valuation analyses tell a different story. Those that focused on transforming their companies but did not necessarily add a bunch of technology were still more profitable and increased market valuation more than those who simply put in technology. It’s no surprise then that those who did both (top right quadrant) performed best of all across all three measures. This view of the study suggests a “glide path” for digital transformation. Start by improving your processes and preparing your culture to adopt change.
A strategy that includes continuous improvement and cultural transformation efforts will support more valuable returns on technology investments. The philosophy of continuous improvement, and specifically the tools and techniques of Lean and Six Sigma, have a well-documented history of enabling cultural and behavioral transformation as well as process improvement. Using an Organizational Lean approach to drive lean thinking throughout the organization and diligently improve your processes one by one will build your organizational transformation “muscles”, so that as you add new technology capabilities your teams will be able to adopt them and apply them much more effectively then they would without a dose of organizational lean.
* CapGemini, 2012 “Digital Advantage: How digital leaders outperform their peers in every industry” (http://www.capgemini.com/resources/the-digital-advantage-how-digital-leaders-outperform-their-peers-in-every-industry)
Written by Andrew Ranson
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