The benefits of transforming your business through better use of data and new digital tools is now a widely accepted given in the business world. Across the board, it’s showing increased revenue, reduced costs and greater profit.
But for many business owners, CIO’s, CTO’s and CMO’s digital transformation is another thing they know they have to do, but just can’t get to. And every year they don’t move forward, the gap between them and their transforming competition gets wider.
So how do you start transforming?
First, you need to understand the real problem. It’s not a fear of digital, a lack of good people, a lack of vision or leadership, time or money. People may say these things but there is actually a deeper-rooted problem.
The problem is the structure of your business!
Forget about digital for a moment and think about change in general. How well has your business coped with change in the past? How adaptable are your business structures and the jobs people do in your business? Chances are they aren’t too adaptable.
And therein lies the real problem. Your business is not structured in a manner suitable for the now ever-changing digital world.
Most businesses are structured in a hierarchical manner and there is good reason for this. The hierarchical structure (even a flat hierarchy) has proven to be extremely successful. It takes complex problems and provides order and structure. It’s been successful in producing efficiencies, driving down costs and increasing revenues. But what it is really poor at is dealing with unpredictability, in fact, it hates the unknown and chaos ensues when it hits the hierarchical structure.
Compare this to the best startups. They are agile, quick to react to problems and have a team that works more like a network, with different people taking the lead for different initiatives they are passionate about. Everyone mucks in and everyone moves forward.
So should you become a startup again?
No. Also, remember that most startups scale really badly. They lack the structure and competitive edge a hierarchy’s processes bring.
So how do you move forward?
Fortunately, there is a solution that enables you to make the most from the benefits a hierarchical system bring as well as those from a networking system.
As suggested by John Kotter and his team from Kotter international, you need a dual operating system. One that uses the hierarchical structure to keep the ship steady and uses the network structure to create teams of innovation. Teams that are not inhibited by the usual bureaucracy and restraints of your usual day to day way of working. The network structure is led by anyone passionate about the idea or change required. It’s a great way for businesses who don’t have the time or money to spend on a digital transformation process to get all the team involved and focused towards an end goal, that they have a part to play in it. If an initiative fails, drop it quickly, because you can in a network structure. Or if an initiative is looking promising and reaches maturity, then apply a hierarchical structure to it and get the added benefit that brings.
I believe anyone struggling with the problem of moving forward in digital transformation should read two books by Kotter before they even learn more about digital:
“Accelerate (XLR8)” – Presents the theory on the basics of change management and how the dual operating structure offers a solution in today’s fast-changing world.
“That’s Not How We Do It Here!” – A fable about Meerkats, that has business lessons for your team to get the concept of change in today’s world and to encourage discussion around their role in it.
In conclusion; without the basic understanding of how business change can be driven in today’s super fast-changing world, you may struggle to get your digital transformation off the ground and gain the long term success it promises.