Defining (and Leading) a Winning Digital Transformation Strategy

New industries and technologies spin off new terms like sparks off a metal grinder. Finding two people who agree on the precise definition of these neologisms is not easy. That’s why any venture should begin with a shared understanding and lexicon for both the business objectives and the underlying technology. 

For example, you would never base your company’s critical strategic plans on a term that has hundreds of different definitions and interpretations. Yet the business term of the moment, “digital transformation,” or DX, is defined in hundreds of ways and the source of all knowledge (Wikipedia) doesn’t help with a warning stating the definition page might be incomprehensible.

Technology has been transforming business since the invention of the wheel and with each new step-function improvement, traditional industries are forced to reinvent themselves. The digital transformation now underway is perhaps unique in the breadth of scope.  From banking to retail, to entertainment, to food services… virtually every company in every industry is challenged to reinvent how they engage with customers and markets.  Also unprecedented is the pace of change digital technology instigates. This creates the twin challenges of gaining expertise as the technology develops and doing so faster and more effectively than your competition.  That competitive velocity is what has spun off the sister term “digital disruption.”

 

Thinking strategically about your digital business’s goals

It isn’t unusual for a word’s meaning to evolve over time, but rarely has a definition been stretched so far over such a short period. Researcher and business-transformation pioneer Simon Chan notes in a January 25, 2018, article on LinkedIn that the term “digital transformation” has “morphed into a bit of beast” in just a handful of years which is an understatement.

Chan writes that a transformation is “a much more profound and radical process” than a simple change, resulting in a new direction and heightened effectiveness for the entire organization: people, processes, and technology. Such a fundamental business-process shift is doomed unless you begin with all stakeholders agreeing to a shared vision.  He provides a layman’s definition of digital transformation which I think is pretty easy to align around:  Using technology to create differentiating ways of doing business with the aim of driving growth in new and existing markets.

That describes most of the large enterprises that Morpheus works with every day.   Leaders in their respective industries, the centralized architecture and engineering teams have a mandate to ‘get out of the way’ so that application developers, researchers, and other users can accelerate transformation efforts.

 

The digital transformation is “updating the business models,” according to Chan. That sounds simple, but doing so “permeates every living cell of the company, resulting in changes to structure, capabilities, policies, processes, people, technologies and culture.” Yet the CEO perspective of the business model digital transformation is only one dimension:

  1. Customer Experience led (CMO perspective):  Encompasses how you connect with customers, and how you maximize the value of your organization’s data and package intelligence to decision makers.
  2. Operational Transformation (COO/CIO perspective):  Focuses on operational efficiency by blasting through departmental silos to promote cross-functional processes, communications, and tools. Here is where DevOps and service management reside.
  3. Cost-Centric Transformation (CFO perspective):  DX as a driver for efficiency via lower capital expense, facility consolidation, and staff reductions.   The driving force behind many XaaS pivots.
  4. Business Model Transformation (CEO perspective): The mother of all DX, the CEO pulls from all other perspectives to champion a single vision and business strategy with the support of the board.

 

Making the case for a C-Level ‘Transformation Officer’

The Enterprises that Morpheus works with on CloudOps and DevOps are all using technology to transform how they engage with customers in order to disrupt markets and drive new growth. But this is as much about business process and leadership as it is about tools and technologies. In many industries, the disruptors are “cloud-native” companies that are pushing more traditional enterprises to “transform” to avoid getting left behind.

When organizations undergo a major transformation, it must be driven top-down from the board and CEO, but also from a proven change agent. This is the role played by the Digital or Chief Transformation Officer (DTO/CTO), who helps give the right level of importance to what can be a difficult shift.  However, a single individual alone cannot drive the agenda. It must be clearly communicated from the top that these types of major changes require the complete buy-in of the entire organization.

The DTO/CTO’s key role is to “encourage and embed change.” They drive change by holding responsible the parties managing the hundreds or thousands of components that comprise a typical program. They are masters at balancing: short-term successes vs. long-term value, delegating responsibility to line managers vs. personally ensuring results, and committing limited resources to specific transformation projects vs. shifting resources as priorities change.

These leaders must have cross-functional expertise in the technologies, processes, and people skills to evangelize change and drive results. Ideally, they should not be seen as part of the legacy they are trying to displace, but they can benefit from having proven success in other turbulent projects within the organization.

 

A survey of successful Digital Transformation Officers identified key attributes of executives in the role:  Source: Russell Reynolds Associates]

 

While DTOs can own the mandate and provide the urgency required to personally orchestrate a great number of disparate initiatives, they must be seen as an integral part of the executive team and an extension of the CEO. The CEO can help support the initiative by providing access to the facts and resources required, and by assuring the transformation project has clear measures of success.

Many of these requirements are echoed in projects involving cloud and DevOps. Simply creating a “DevOps team” or a “Cloud Czar” does not assure success. In fact, the very thought that DevOps could be driven by an individual or group is a symbol that the organization has not truly embraced the need for a complete shift at a broad level to ensure its success.

 

Like a good poker player, you’ve got to be all-in when it comes to digital transformation.  To learn about how Morpheus could fast-track your transformation project setup time for a demo with one of our solution architects.

 

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