Designing, implementing, and managing meaningful change for a customer-centric organization

In this 5-part series, I’m going to discuss the importance of digital transformation, how to ensure you achieve your organizational goals, and the best ways to plan for success. You can read more about some of these topics and more in my books, The Center of Experience and Digital Delight, available in print and digital versions.

Great customer experience (CX) is more than something that is nice to have. It is now one of the chief points of competitive advantage for many brands across a growing number of industries. One of the biggest roadblocks to providing a more seamless experience to customers is the need for digital transformation within the organization. Whether the transformation helps the direct interactions customers have with your brand, the operational aspects behind the scenes, the measurement of CX, or all of the above, it sometimes takes large-scale organizational change to enable a better customer experience.

Digital transformation enables benefits beyond CX, including smoother operations, a better employee experience, as well as a more streamlined method to collect, analyze and improve organizational KPIs. All of these combined with a customer-centric mindset, and an agile approach to implementation and improvement can help companies succeed in their digital transformation efforts in the long-term.

What is digital transformation (and what is it not)?

Now that we’ve established that digital transformation is important, let’s talk about what it is. 

Daniel Newman, of Futurum Research says that, instead of thinking about digital transformation in terms of a technology solution, instead think of it as about “tech-enabled change.” In other words, focus on the organizational change you want to see, and not on the technology required to enable it.

True, lasting change has implications for every corner of an organization, thus digital transformation needs to be divided into areas that can be tied to company goals and measured both independently and as a whole.

Adding the descriptor of “agile” to the beginning, means that we can’t think of digital transformation as a big, long project that has a definitive end date. If we do that, we will find ourselves needing to undergo a big digital transformation every 4-5 years, instead of operating as a continuously improving organization that is making small iterations regularly, but doesn’t need to be continually redesigned.

The 3 Components of Digital Transformation

To dive deeper into digital transformation, let’s look at the 3 components that companies need to enable in order to be successful.

Component 1: Customer-Centricity (customer and employee experience)

We start with the most outward-facing component of any digital transformation. How does transform affect, and ideally enhance the customer experience? Unless there are net benefits to the end customer, and ultimately to the bottom line in terms of increased sales, repeat business, and referred customers, it could be argued that a digital transformation is not worth it in the first place.

Understanding customers

Thus, the first component involves building a customer-centric organization that understands its customers better, and uses technology to enhance this understanding which translates into sales growth and long-term customer relationships.

Being a customer-centric organization means more than paying lip service to putting the customer first. It means involving everyone in the organization in understanding and serving customers, from front line employees to those operating well behind the scenes.

Connecting employee and customer experience

To this end, customer-centricity also directly involves employees and the employee experience. As I’ve written in several of my books, there is a direct relationship between customer and employee experience. After all, how can a customer experience great service from an apathetic, unengaged employee? It goes deeper than that, and doesn’t just involve those on the front lines. For instance, how can a product developer create a digital experience when they aren’t invested enough to empathize with the customers for which they are designing products?

The customer-centricity component of a digital transformation is successful when the company is able to connect with its customers, understand them, and provide experiences that result in increased engagement and sales.

Component 2: Culture of innovation

We will explore this in more detail as we progress in our exploration of digital transformation, but a key component is of long-term, continual improvement. Customer-centricity has a key role in that improvement, but the culture of the organization is what truly sustains continued digital transformation.

We will look at a culture of innovation using three categories. 

Definition of Innovation

Much like corporate branding, which strives to unify a company’s team by sharing a common vocabulary of mission, vision, and values, a culture of innovation must be built on a shared understanding of what “innovation” truly means.

Semantic as it is, this is important because it helps each individual understand not only where the “north star” of digital transformation, but it helps them align themselves and their unique role to that definition of innovation. There is also the concept that George S. Day coined over a decade ago, of “Big I” and “little i” innovations, with the former being widescale, disruptive change, and they latter being incremental improvements to existing products, services, and processes.

While the two can exist in the same company, again, it is important that a company define not only where they are headed, but the kind of ideas that are valued, the inventions that are sought, and the speed at which they want to get there.

Leadership

True change, whether it is culture change, innovative change, or anything else, takes leadership in order to make happen. It is the role of leaderships to set clear, measurable goals, and support their team as the digital transformation initiative hits snags, the need for decisive actions, or the need to pivot their efforts to best reach their objectives.

Thus, there needs to be buy-in and tangible support from leadership in order to ensure success in any digital transformation. After all, if executives aren’t in favor of change and excited about its progress, how can employees feel differently?

Organizational Culture

Beyond individual employees and leaders, we also have to think about the organization as a whole. You can think of a company as a living system in which there are individuals who are unique, yet they work together as a system to change the whole.

So the organizational culture consists of both how individuals behave on their own, as well as how they interact with one another and get work done. You need to understand that these two levels need to co-exist, and that one can’t obscure the other.

Similar to getting leadership buy-in, a digital transformation isn’t going to be successful in the long-term without a culture that is able to adapt and work together as a team in order to undergo the changes necessary. It’s important to understand this before you ever start so you can head off issues that you can easily foresee if you have a better insight into how your employees will react to change.

Component 3: Operational Excellence 

Last but not least, let’s talk about processes. While it’s thought of as a less exciting topic than customer-centricity and innovation, it is a big reason why many digital transformations fail.

Digital transformation provides an important opportunity for companies to improve their internal processes by utilizing automation and digitization, as well as by empowering employees to have better systems, tools, and platforms to perform their jobs. In many cases, these employees are able to monitor and adjust things in much faster and easier ways, and are able to make more strategic decisions in ways never before possible. The speed to act on insights is a major benefit.

Different organizations have their own methodologies and change management tools and models, but as long as they are effective, and used consistently, it doesn’t really matter what is used. What is most important is the establishment of clear KPIs, consistency of approach, and buy-in from stakeholders even when there are occasional stumbling blocks.

What digital transformation is not

While we are defining digital transformation, let’s spend a little time on what digital transformation is not.

Digital transformation isn’t tactical. 

While digital processes, platforms, and technology enable many tactical efforts to be performed, if your initiative isn’t tied directly to a key corporate strategy, you are not engaging in digital transformation.

Digital transformation isn’t a single initiative or project.

Part of the reason that many digital transformation initiatives hit roadblocks and delays are that they are often so big and company-wide that they get stuck in between the silos and bureaucracy that they are intending to break down. 

If your initiative is a single project with a relatively short duration, you aren’t undergoing a digital transformation.

Digital transformation isn’t a temporary change to the way things are done.

It’s certainly implied in the use of the word transformation, but any true initiative of this nature needs to create lasting change. In a sense there’s no going back. If your initiative is short-term in nature, and a temporary fix to an experience, culture, or operational challenge, it is not a digital transformation project.

Conclusion

Understanding the unique components of a digital transformation initiative as well as being realistic about what to expect (and not to expect) is critical to success. These factors will translate to customer experience benefits, as well as long-term benefits to your organization.

In the next article, I’m going to discuss why digital transformation is so important and how you can embrace key principles to ensure success in your own initiative.

You can read more about some of these topics and more in my books, The Center of Experience and Digital Delight, available in print and digital versions.