Too often we see organisations begin ‘digital transformation’ as though it were an IT programme. They come with a budget, a list of requirements, a roadmap and a deadline. We know – it’s reassuring to plan like this. But this approach won’t deliver the fundamental change needed to compete with modern product businesses taking on large, legacy organisations for their market share and customer base.
To begin with, I like to think about the business as a complex system. It leads to a more flexible approach that empowers internal teams, mitigates risk and generates long-term, lasting change.
Large organisations are complex systems of people, processes and tools – messy webs of connections and dependencies rather than neat, hierarchical org charts. No one part works in isolation and all aspects need to be involved in order to ‘transform’. While the focus is often on technology, people and ways of working are just as important.
“Digital transformation is not a change programme, it is actual change.”
Russell Davies — CMO at Bulb and ex-strategy director at GDS
Systems can be compared to living organisms. They behave in unpredictable ways. Change needs to be coaxed forward, rather than imposed – think trying to get a toddler to brush their teeth. If you try to force through change too quickly, in the words of one of our clients, ‘the system rejects you’.
It takes a mix of vision and grit to make it successful. Vision to set a clear purpose, see the future state of the business and get people in the organisation enthusiastic about it. Grit because it will take time, there’s no easy way through and at every step of the way there will be those who want to stop it.
Change is hard. So what does it take to successfully change a complex system?
You can never know the real impact of change until you try it. It may fix some problems, but leave you with a whole bunch of other problems you didn’t have before. If you take an experimental approach, you can stay flexible and understand the impact of changes you make before committing wholly to them. Be clear on what outcomes you’re aiming for, create hypotheses for how to test them and run experiments. Then adapt based on what you learn.
For example, we’re working with a client to create their target operating model as part of a wider transformation. This future vision gives us an important trajectory, but we’re also starting to move towards it and test it in the short term by selecting specific teams to trial changes, refining the approach based on what we learn, and rolling out the bits that work more widely.
In a complex system, everything is interrelated. This makes it hard to know where to start. Some organisations have successfully taken a big bang approach, like ANZ Banking group, who made all 9000 staff ‘right from the senior leadership executives all the way down’ reapply for new jobs. But this is drastic and unrealistic for most.
To organically change the existing system, pick activities that can demonstrate positive change quickly across different areas and that can be most easily scaled in the business.
In recent research we’ve conducted, a Transformation Director told us his team had started by asking a single sales advisor what they could do to improve their life in just 2 weeks. By demonstrating a tangible improvement to their work in that time, he proved the value of his team, but was also able to roll out the same improvement to every sales advisor in the business.
With British Gas we’ve helped to create a design system that now underpins all their digital digital design work. Starting this task required us to confront a number of challenges – design efficiency, governance, accessibility, and ways of working. By working in this way, we were able to free up product teams to work more efficiently and focus on meeting customer needs.
You might have direct control over some things, but others you can only influence from afar.
It might take years to reframe your financial governance away from deadlines and deliverables; or to shift away from hierarchical, top-down decision making. Start chipping away at all of them now. And keep chipping away.
Create strategies for the fast and slow:
A long-term vision is important, but it can be much harder to know where to start delivering it.
It’s also easy to get overwhelmed by the size of the task and the interdependencies. Look just 6 weeks ahead and ask yourself ‘how can I make a tangible move towards the vision in the next 6 weeks?’. Then double-down on those changes.
To deliver long-term, lasting change, you cannot buy an off-the-shelf solution and you cannot get someone else to do it all for you. Everyone in the business has to be part of it. The more ownership your team feels, the more they will engage, own the responsibility and see the rewards.
Outside coaching can help. We have small teams working on the ground with clients, coaching them through large-scale transformations to demonstrate measurable improvement that accelerates progress.
The quicker you can create proof points and make your efforts financially self-sustaining, the easier everything becomes.
Transformation is ultimately about emulating the behaviour of successful product businesses. They are typically purpose-driven, able to scale revenue without scaling costs, have the agility to respond quickly to changes in the market, and value trust and transparency in their culture.
Initiating this kind of change in a complex system takes vision and grit. There are no shortcuts. If you focus on the outcome you want, keep these goals in mind, and push forward in lots of small, fruitful steps, you’re far more likely to make it a success.