A survey this April by Forrester of over fifteen hundred “business and technology decision makers” revealed some unsurprising, but concerning results. Generally, there is nothing radical here, the findings reinforce the picture we already have of the current plight of businesses on the road to transformation, but it does provide a few interesting new stats that add to the discussion surrounding the demise of so many traditional businesses.
We know from earlier surveys over 60% of businesses recognise the need for transformation and this is broadly confirmed by the Forrester survey.
However, we have also been told in the past only 21% of businesses actually have a transformation plan. This may seem at odds with Forrester’s suggestion that 50% of businesses are already transforming, but I suspect the anomaly is more to do with the definition of “transformation” than a change in the situation. I haven’t seen Forrester’s question to its respondents, but I suspect the onus was on the respondents to say whether they were transforming, which relied on their interpretation of the term and as we repeatedly see with these surveys, that is very much the crux of the matter. So many business leaders don’t know what transformation is.
Forrester also identifies 21% of businesses that believe they have completed their transformation, which confirms understanding of the concept is pretty low. As I have said many times, transformation marks the shift from process-driven operation to a state of constant change. Transformation NEVER ends and businesses that believe they have “transformed” are among those most likely to fail.
In fact, many businesses that believe they are transforming are not doing so at all.
Rob Llewellyn at CXO Transform describes this as “The Great Digital Illusion”. In fact, I believe the word “delusion” is a more accurate term. Many businesses and their leaders are hiding their ignorance behind a façade of business “change” and devoting more time and effort to persuading their employees that transformation is underway and salvation is near than they are getting on with the job. To achieve calm they promote the common misunderstanding that transformation is a matter of digitising existing processes. This is absolutely not the case.
Transformation is the re-invention and re-building of your organisation from scratch in the light of the capabilities digital technology now gives us.
It requires new processes, structures and practices and usually results in new products and services. In fact, businesses that are re-inventing the past by digitising traditional structures and processes are only accelerating in the wrong direction and will therefore only meet their demise sooner.
The illusion of success is sustained by the fact that the short-term outcome of digitising the past is often an apparent improvement in efficiency. However, this will only be short-lived and from there the path is downward and fast. Transformation is about inventing the future and that bears little or no resemblance to what we’ve done before. If you are not disrupting (or at the very least defending against disruption) you are not transforming.
We also know that somewhere between 70% and 80% of transformations fail and one-in-three businesses are expected to fold in the next three years as a result.
Although we are familiar with the many causes attributed to this, I believe their common root is nothing other than lack of focus. Consequently what may initially appear to be Forrester’s hint of improvement, is rather more a reinforcement of the conclusion many of us have already arrived at – business generally is in serious trouble.
One very troubling revelation of the Forrester report is that marketing people don’t appear to be stepping up to the plate.
In fact, the data suggests that technically focussed people are in the driving seat. I’ve said many times, transformation is not an IT project, but the role of CIO, which, it seems is the that most commonly allocated to the task is held in so many businesses by technical and IT personnel.
Technology facilitates digital businesses, but what drives it is a new approach to business that puts customers front and centre and this is where any marketer worth the title comes into their own. There’s a strong probability that technology-led transformation projects fail because they are focussed on the tech. What tends to happen to businesses that approach the task in this way is they create an infrastructure first and only then decide what they can do with it, when in fact, what they should be doing is deciding the role they want to play in the digital economy and then building an organisation using technology that will facilitate this.
Forrester conclude their report with a set of recommendations that nobody who knows what they are talking about would argue with.
- Embrace the inevitable, and prepare for continuous change
- Assemble stakeholders from your C-suite
- Assess the current state of your digital maturity
- Identify gaps between where you are and where you want to be
- Don’t stop with a bolt-on digital strategy – tackle technology along with culture, structure, talent and metrics to align the forces of transformation in your favour.
I wouldn’t quite word it like that simply because this choice of words won’t do anything to convince the people who don’t “get it” that they don’t already have it nailed, but I admit it’s difficult to break through the barrier to understanding. My message to business leaders would be more like …
- Get used to nothing ever being the same again. Transformation is a state of constant change.
- Embrace your wider stakeholders because they are representative of your market. Over 60% of your workforce are digital natives, this is their environment and they understand what’s going on better than you ever will. You may think you are switched on and tuned in, but anyone over 35 will probably be “dad-dancing” digital.
- Audit your resources – digital and otherwise.
- Assess how they meet the demands of current and future markets.
- Work out what you need to do to stay relevant.
- Plan to build it using any of your resources that measure up. The rest can be discarded.
Another challenge facing businesses right now is the lack of understanding of what brands are and how they work.
If you are already up to speed with the idea of brands as communities of people with shared values and beliefs, it’s but a small step to appreciating the key role they play in successful transformation.
Not only will your brand drive your transformation, but it will be critical to you maintaining a presence in the digital economy for the foreseeable future. A strong and clearly defined brand will unify the efforts of your stakeholders (and there are more than most people realise) behind a single objective making its realisation quicker, less expensive and far less painful. That’s why brand should be the starting point for every transformation.
December 20, 2018