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5 key steps for effective digital transformations

How do you go about integrating new thinking and approaches while running your business? Focusing on these five ingredients should help.
Digital transformation programs are often problematic. There are no “one size fits all” solutions, because every company has a unique starting point in terms of its digital maturity as an organization. Case in point: Nearly all companies need to maintain legacy IT systems because they house vital business data and intelligence.
With that said, a  recent study found that almost half of business leaders expect that their business model will cease to exist within five years due to digital disruption. So all companies have an incentive to act quickly. Digital disruption is real, and business-as-usual thinking will increase the chance of your organization going the way of the dodo.
Unfortunately, most companies aren't set up to manage rapid, drastic change. They are good at what they do, and have years of experience and expertise invested in optimizing current IT systems to handle the “how” and “what” of their particular business model.
Digital transformation is like overhauling a railway network without the luxury of being able to stop the train service for any period of time. You’ll need change agents and change experts, and although you may find some of them in your company, you will likely need to bring in outside help too.
The right digital transformation can yield measurable returns. For example, research in Leading Digital, by George Westerman, Didier Bonnet, and Andy McAfee, shows that companies that are skilled in digital business generate 9 percent more revenue,  create 26 percent more profit, and have 12 percent higher market valuations than their less digitally savvy competitors.
So how do you go about integrating new approaches while running your existing business? How do you reduce risk and increase your chances of success? Here are five suggestions:

1. Encourage good behavior

Digitally savvy companies have leaders who encourage teamwork, explain their purpose with clarity, and promote an environment of openness and sharing. The particular organizational structure you have in place is less important than getting employee and leaders to embrace these behaviors.

In her book The Management Shift, Vlatka Hlupic shows that many successful companies share a management style characterized by an open mindset, an unbounded culture, strong team cohesion, inspirational leaders, a strong sense of purpose, and passion for the work the company does.

These are the characteristics that 21st century leaders and managers need to handle rapidly changing business landscapes. 

2. Think holistically

Adding a social business platform or other new digital business components on top of existing systems can provide some help, and even give short-term benefits in key areas. To really transform your business, however, you need a holistic approach.
According to recent  Forrester research, most digitally mature businesses recognize that they must break down business silos in order to realize their digital visions. One helpful tool is the McKinsey 7-S framework, which has been tried and tested over decades.
The 7-S framework emphasizes the role of coordination, rather than structure, in organizational effectiveness. First you assess the business in terms of strategy, structure, and systems. Then you examine your staff, skills, and style, as well as the shared values of the company.
This approach helps to integrate all the factors needed to add value, find efficiencies, and make a real difference in your organization. You don't have to use this particular framework, of course—there are many other useful tools out there. The point is that digital transformation becomes much easier when you think about it holistically.

3. Be agile

You need a plan to integrate your digital transformation project so that it works with your legacy systems. Your plan should draw on agile thinking while still satisfying the financial demands of the C-suite. Think in terms of short time scales and multiple iterations. Don't fear experimentation or failure.

The Forrester research already mentioned highlights agility as one of the top five metrics to measure the success of digital programs. True agility requires you to think like a startup. First, identify the problem that needs to be solved with a new digital approach. Next, develop a minimum viable product that you can implement. Use the resulting feedback to improve and iterate your product.

Pursue multiple, parallel streams of change with a six- to eight-week cycle or shorter. Focus on achievable outcomes rather than individual tasks and steps, and be sure to foster regular communication at all levels across the process.

4. Build a social network

True digital transformation touches all of a company's teams and processes. You need sound cross-functional governance to get everyone on board with the disruption that's to come.

Our research shows that organizations that have implemented some form of enterprise social network or social collaboration platform, such as GitHub or Slack, are more successful with their transformation than those that don't. This kind of communication harnesses the collective intelligence of teams in ways that aren't possible with old communications technologies such as e-mail.

5. Create your transformation story

Unless you are a digital native startup, your digital transformation will most likely be a complex series of incremental and strategic initiatives that fundamentally change the company over time. To get employees, customers, and investors on board, leadership needs to communicate the big idea—the “why” of what you are trying to achieve by reinventing your business.

Integrating digital transformation: Lessons for leaders

  • Digital transformation requires an open mindset, an unbounded culture, strong team cohesion, inspirational leaders, a strong sense of purpose, and passion for the work the company does.  
  • You need agile thinking, a mix of incremental and strategic initiatives, and short development cycles.
  • Leaders must communicate why they are reinventing the company so that everyone is on board with the overall goal.

This article/content was written by the individual writer identified and does not necessarily reflect the view of Hewlett Packard Enterprise Company.