University of Michigan's Ross School of Business shares the final installment in a 4-part article series on digital transformation, detailing the four practical steps companies can take to implement digital transformation – to successfully “make the leap” across the digital divide.
Authors: Mary Hinesly, Professor of Executive Education, University of Michigan Ross School of Business; and Jay Srage, Head of Operations - MEA, University of Michigan Ross School of Business.
Welcome to the final installment in our series on practical steps companies can take to implement digital transformation and “make the leap” across the digital divide. In the last three parts, we talked about conducting a digital audit to more fully understand the current state of technology and cultural readiness in the firm, took a deeper dive into educating employees to raise their skill level so they are equipped to lead and implement digital initiatives and provided a framework for selecting the right technologies that work for your organization.
In this final segment we will focus on applying and implementing technology through collaborative communication. We previously mentioned that when organizations attend to these four steps, technology adoption happens smoothly – a state of things we call “Technology Cohesion.”
Step 4 – Implementing the technology through collaborative communication
A well-known online retail organization has access to all the best technology the market has to offer. They pride themselves on rarely hiring consultants so it was surprising that they called asking for help. They had a huge problem and they thought they were too close to it to see an objective solution. They said “Do whatever you need but find a solution,” and gave me permission to contact their offices
During the second phone call, my contact at one of the offices told me she was dealing with the exact issue they had asked me to investigate. Not only that, she had already found a technology solution to it! The company learned that the solution they were looking for was right under their nose, but the lack of collaborative communication meant nobody could find it in time for it to make a difference beyond that one office. It was an eye-opening example how important it is to implement collaborative communication through technology.
Another company, a large credit card company, had an issue with a new product development cycle time. Their request was to reduce cycle-time and workload. The legacy system was set up as an email box that mid-level managers filtered before moving to an upper management email box. It was a slow and cumbersome process. To replace it, we set up Reddit-style technology (Reddit is an American social news aggregation, web content rating, and discussion website). Registered members submit content to the site such as links, text posts, and images, which are then voted up or down by other members. This system for the credit card company allowed the invited employees to post product ideas, allow other team members to contribute to the idea, discuss the idea and rank the idea.
The solution reduced new product development cycle time by 40% and increased the number of actual new products. Through collaborative communication, they were able to create a new technology solution that was far better than the old email approach.
Factors such as culture, size, industry, and hierarchy can lead to communication inefficiencies that can be addressed via digital tools. A common challenge is that firms are not structured for effective communication. Big companies, or those with security concerns, often struggle to implement collaborative communications systems. And what does get implemented is too-often a one-directional communication flow trickling down from the top to the employee base, with no feedback loop to let the management know if communications are “received.”
Digital transformation doesn’t happen by creating a single “Digital Transformation Business Unit” tasked with implementing the technology. Nor does it happen at one specific level or function of the organization. It happens with a combination of some kind of center of excellence that cuts across employee levels and functions in the individual business and functional units who own the objectives.
It is best to start small, allowing the center of excellence to help one department or task group to solve a problem or bottleneck with technology so a grass roots belief in the power tech tools starts to spread. Then as word gets out, more and more units will ask to start projects and access the resources of the central group.
There are tangible first steps that can open up the gates of communication such as an internal blog for employee collaboration where employees are safe to share issues, concerns, wins, or solutions, etc. Another approach is to provide a picture of potential platforms organized based on relevance and use. This infographic, describing the platforms in use, is a great way to avoid the complexities and misunderstandings associated with complex processes and models geared to a “tech” audience. For the everyday employee, a picture is truly “worth a thousand words.”
External communication with customers is as important as internal communication. Companies need to evaluate the effectiveness of engaging with consumers via digital technologies and social media. There should be external social media policies that are guardrails without being too onerous or legalistic, as well as feedback loops for continuous improvement.
While some level of digital marketing has become the norm for most firms, it remains a small fraction of the overall marketing and external communication spend. Often the digital marketing plan is unfocused and lacks an assessment of effectiveness. Too many organizations are online because they “need to be online”, and have ineffective brand promotion and limited social media engagement. Functional goals for digital marketing include increasing the audience size through brand visibility, increasing the engagement across demographics in a way that’s targeted at the most relevant audiences, and tactics that drive direct results such as sales, subscriptions and registrations. A first step is to update the social media strategy, tailor it to include targeted content, and personalize the experience through interactive elements.
It is also important to communicate the internal digital transformation strategy to the customer base to get their feedback about the efficiency of the strategy, and use technology to continuously integrate that feedback into the company’s digital plans. This closed loop ensures alignment between company and customer. This is particularly important when implementing technologies that are central to the customer experience.
Summing Up - Building Technology Cohesion:
Digital Transformation impacts the processes and outcomes of every function. It is imperative that each function and each employee understands and their part to achieve the goals of the strategy. Ideally, they will begin to feel comfortable with how new tools can complement or reduce workload, not replace their existing job function. The absence of a clearly and visually communicated internal technology strategy to facilitate conversations, info-sharing, and aid problem-sharing within the organization will lead to an unsustainable digital transformation.
The most typical challenges are over-reliance on legacy tools like emails supplemented by minimal face-to-face communication, which generates misunderstood messages and triangulated communications, while missing out on the contributions of employees that can add value. The lack of advanced internal communication tools leads to managing crises on an event-by-event basis rather than having a consistent framework to deal with issues when they arise.
Let us leave you with one best practice we highly recommend – an internal “executive think-tank” that integrates input from the larger organization and customers into a coherent overall vision, strategy and plan for the digital strategy. That strategy then gets communicated concisely and visually. Choosing digital communications systems that work in harmony with each organization’s unique culture and workflow wins the support of employees and customers who then help make the plan better. This participation and feedback loop reaches back to the executive level, creating a real-time continuous assessment, and refresh, of how the plan is working for all stakeholders.