By now, the words digital transformation sound everywhere. The digital disruption is real, and I am sure you are familiar with it. There are plenty of examples from the hospitality industry disrupted by Airbnb (short for Air Beds&Breakfast) to transportation impacted by Uber. However, there is still resistance, skepticism, fear, or all the above hindering the opportunity to move towards getting on the fast speed train of digital technologies coexisting with the workforce.
My clients often ask me:
Why do digital transformation?
What to do and expect?
Who leads it and who needs to be involved?
When to start?
How to make it happen?
The External Why
There is plenty of data about the business case or need for change.
there is a $100 trillion opportunity for industry and society by 2025
The productivity-boosting opportunities could be at least 2% on average per year over the next ten years, with 60% coming from digital opportunities.
52% of fortune 500 companies disappeared in the last 15 years, caused by digital disruption.
85% of CEO’s agree artificial intelligence (AI) will significantly change the way they do business in the next five years.
60% of occupations have at least 30% of basic work activities that could be automated; however, 87% of employers plan to increase or maintain headcount as a result of automation.
54% of the workforce will require significant re & upskilling by 2022.
The Internal Why
Given the business case, there seems to be a distinct advantage to get the digital transformation process started. However, even with all the hype and opportunity, technology adoption is still lagging in many companies:
30% have yet to pilot or about to start piloting.41% still piloting.29% deploying at scale.
Also, CEO's feel the gap between information they need and what they get has not closed in the past ten years.
When the CEO and the executive team have a clear vision and purpose, they know the WHY the organization does what it does. On this topic, I recommend Simon Sinek’s Ted Talk and book Start with Why – how great leaders inspire everyone to take action.
The CEO and executive team need to exhibit and facilitate the 3 C’s: Communication, Collaboration, and Continuous Learning. Important to note, communication is not about speaking; it is about listening, actively listening.
The team needs to work together on strategic questions:
What is the overall strategy; what is the digital strategy; how does it integrate?
What is Important?
What is Urgent?
What Problem(s) are we trying to solve?
What is our SWOT (Strengths, Weaknesses, Opportunities, and Threats) ?
What to Start, Stop, Continue and do differently?
The Organizations need to see themselves coexisting in an ecosystem - a complex network or interconnected system. The coexistence is the state or fact of living or existing at the same time or in the same place. The definition also applies to how the workforce and the technologies must learn to coexist.
The Transformation Roadmap
Let’s walk through the transformation roadmap I effectively use it as framework of six keys. These critical steps apply to any change or transformation, no matter how big or small, how simple or complex it may be. I have used them. I know they work in different scenarios and regions of the world. I have experienced instances of technology deployed or about to be, with no readiness of the workforce or without genuinely understanding the issues. This roadmap avoids that issue.
Key #1 – Engage with People
The hidden engine of a transformation is the workforce. People at all levels of the ecosystem have a role to play in the transformation of the entire value chain - employees, management, executives, suppliers, customers.
When you bring people into the process of change or transformation, they feel good about themselves because the process involves their ideas and motivations. Their participation in decision making gives them ownership.
Leaders need to be visible, present, and often reach down to talk to employees to learn about what is happening and what can be improved.
What needs improvement ?
What ideas employees have?
What is working?
What help and support is required?
What training is required?
people make the difference when organizations attempt to transform themselves
human soft skills are important
deploying humans for value-added tasks becomes a differentiator for companies
avoid the trap to overinvest in technology and underinvest in the human capabilities needed to make it useful.
people, not technology, is what will likely determine a successful transformation.
Key #2 – Have the Basics in Place
It sounds trivial; however, many times, we try to go from crawling to running without paying attention to the fundamentals to get to the goal.
What types of waste are there (overproduction, transportation, motion, waiting, inventory, unnecessary processing, and defective parts/products) ?
How are we at utilizing people’s capabilities?
How are our products meeting customer expectations?
if you can’t do a process manually, you will not be able to automate it
standards and documentation need to be in place to then be enabled by technologies
systems need to exist and integrated with the new technologies
Key #3 – Know the Current State
It is ubiquitous to start thinking about how someone else is doing it, or how a vendor is telling you to do it, or what the latest trends say. Why? Because if we are talking about what the future looks like the tendency is to start there. Not so, start with where your operation is today.
How well do we understand our value stream - a value stream is all the steps (both value-added and non-value added) in a process that the customer is willing to pay for to bring a product or service through the main flows essential to producing that product or service?
What are the inputs, outputs, and processes?
How are processes and tasks executed or not?
What hidden factory can we observe – hidden factory are the activities that result in a reduction of quality or efficiency and is not known to managers or others seeking to improve the process?
conduct assessments: operational excellence, organizational audit, digital transformation readiness.
even if something has been successful, challenge it, there are always better ways to do it.
use an empathy mapping to capture what a person does, thinks, sees, and feels.
leverage the know-how from the ones doing the work.
Key #4 – Identify Pain Points and Define the Problem
Understanding what problem, you are trying to solve is vital to adopt the right technology solutions. Moreover, it is an invaluable opportunity to learn from each other.
Get the people involved in identifying the issues and planning the change; they will be more prepared for a challenge, willing to work hard and be convinced of management’s commitment to the transformation and the workforce.
What are the pain points?
What problem are we trying to solve?
Are the people who best know the process involved in this discovery discussion?
Where would technology make sense e.g., automation to enhance quality, reduce physical stress and provide flow to the process?
Some technology investments are made without a clear understanding of what pain points exist or what problems need to be solved.
Key #5 – Apply the Right Solution
The next step is to adopt enabling technologies that address the identified pain points and provide transparency, integration, and agile decision making.
Automation could hinder progress if not adequately chosen and executed. One example of this is what Tesla experienced with their Model 3. They were not delivering their production numbers, and Elon Musk publicly admitted that all the issues they were facing were caused by over automation. His vision was for the Model 3 assembly line to be one of the most robotics-driven on the planet to which he later regretted by saying he had underestimated the humans.
How integrated are IT (Business Applications, Computing Tech, Data Analysis, and Storage Systems) and OT (Machinery, Equipment & Assets, Monitoring & Control Systems) ?
What is the readiness of our data for data analytics purposes?
the use of data evolves: Collection à Insight à Information à Decision Making
it is critical to find the right partners for collaboration: technology vendors, integrators, consultants
Key #6 – Start Small and Now, Scale Fast
The last key requires to set a time-bound prototype, pilot, or experiment based on pain points or famously known as "low hanging fruit." For this phase, it is crucial to rely on early adopters, those people who will be excited about the test and willing to be great cheerleaders and marketers of the process.
While running the experiment, results get collected, lessons captured, adjustments made, and then it gets re-run.
Once the results are satisfactory, a plan for replication and comprehensive implementation be developed, keeping in mind global, regional, and local differences. The program needs to include how to migrate to new business processes enabled by automation.
What area has the highest potential for success?
What resources are needed for the experiment ?
How will we communicate and engage the teams?
What will define success?
To avoid pilot purgatory, leaders must envision that the experiment is the initial step towards a company-wide adoption plan.
I engage as a collaborative partner with leaders and organizations to give human relevance to digital transformation by assessing and facilitating the readiness of the leaders who will define the course of the transformation and the workforce who are the ones to adopt the technologies so that the benefits get realized.
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You can also read my previous blogs linked to this article:
- Digital Transformation – what is the secret sauce?
- Where and How to begin Digital Transformation?