With each passing day, the buzz word “digital transformation” rises higher on the CEO’s strategic agenda. Business leaders are moving forward with digital transformation at varying paces. and with varying success. They attempt to integrate innovative digital technology into all areas of their business to deliver additional value to customers, reduce costs, implement new business models and make use of large scale data analysis (”big data”) to drive business decisions. Undoubtedly, more than ever before, IT is imperative to the implementation of the business strategy. Yet successful implementing digital transformation is as much a leadership challenge as a technical one. Aristotle famously structured deliberate intentions through 5 Ws – why, what, who, when, where. We will explore together how 5W can help business leaders approach the implementation of their digital transformation strategy with confidence.
Starting with the why and what, have you put all the wood behind one arrow?
Or as we say in Dutch – are all the noses pointing in the same direction?
Members of the senior leadership team are expected not only to support the CEO on business strategies but also to offer their own insights and actively contribute to key decisions. To leverage the benefits of your digital strategy, it is however essential that the leadership team comes to agree on the “what” and the “why”. If the leadership team is not aligned, their direct reports will receive conflicting objectives, which will result in difficult decision taking and hence excessive hidden costs for the project.
- Do you agree on what your customers really need?
- Could a digital market entrant provide a better customer experience at a lower cost?
- Do you agree on which capabilities you need to develop in the company to outperform / reduce costs / obtain reliable data that can be used to further fuel your digital strategy?
- What will you execute first?
Once the strategic direction is clear about the what and why, the implementation addresses the who, where, when, and the how.
The Who - who are the stakeholders and who will drive the project?
Projects by their very nature are uncertain. Digital transformation projects, even if they seem relatively straightforward involve many stakeholders and a high level of complexity and task dependencies. It is therefore essential to have a digital transformation leader with the skill, knowledge and experience to plan and execute the projects on your roadmap.
Equally crucial is the early identification of the stakeholders in the project: on one hand the internal stakeholders in the organisation and on the other hand, external partners, customers and suppliers.
Any successful strategy implementation depends on whether your employees will be able and motivated to meet business goals and drive success.
- Have you communicated what will be expected from your managers and workforce?
- Do your management teams have priority action plans in place to meet business objectives?
- What new skills are needed to handle this change? How (early) can you identify who will need retraining?
- What’s in it for the stakeholders ?
If a majority of employees feel disconnected from the strategy and don’t understand why decisions are being made, resistance to change will be high. Which is why a communication and change management plan has to be worked out from the onset of the project – in the preparation phase.
Have you spent some thoughts about your approach towards external partners?
- Will you brainstorm with your partners, suppliers or customers around the new digital capabilities, do a pilot, test some ideas?
- Do you have an external communication plan and roadmap?
- Who needs to be working on this from your legal, M&S, Procurement departments?
The When - when will you pick the fruits of your project?
Often, it is thought that setting external deadlines creates urgency, and urgency is needed to get things done. In reality, setting a target date without having a sound project plan and schedule to base it on, is not a good idea at all. If an unrealistic target date is imposed, chances are that people on the team will be taking unacceptable risks, such as shortcutting test periods and keeping an eye shut on the quality of their work. Inevitably, this will end in a failed project that will not deliver the expected benefits.
- How reliable is your project schedule, what risks have been accounted for in the contingency?
- What are the important milestones?
- How will you know if the project is on track?
- How will you deal with escalations and inevitable roadblocks?
Urgency should not be confused with priority. Assign the right priority to the project, and kick-off the planning and risk management process as soon as possible.
The Where - where will your project be delivered?
The « where » question may seem trivial but is not. It applies to the data stream that drives your digitalised business processes, whether for manufacturing, industrial or information processing purposes. Having a clear picture of the data flows within your business and with external organisations (suppliers, customers, regulators, cloud applications, digital ecosystems) will help structure all the activities needed to implement the changes.
- Where (and by whom) is data and information captured, created, stored, used or transferred within the business or with external organisations ?
- Where is the part of the data flow that is critical for your business and drives your competitive edge?
- Which part of the data flow can be carried out with readily available software packages?
- Where do you need flexible but effective connectors – humans or technical API’s – to make sure the information chain remains uninterrupted as it crosses company and system boundaries?
And finally - How?
Having addressed the Why, What, Who, When and Where, you may be tempted to ask – How?
My advice would be : Hardily! "To turn really interesting ideas and fledgling technologies into a company that can continue to innovate for years, requires a lot of discipline." - Steve Jobs