Advice

What I’ve Learned from Contributing to a Dozen Digital Transformations

I work with CIOs and CEOs around the world who are tasked with driving their companies into the digital age. These executives work in the telecom industry and see, firsthand, the implications of digital transformation in meeting the needs of their customer base, most of whom have grown used to innovation and constant change.

Telcos, unlike most other businesses, are a 24×7 operation required to be always on and always responsive, at full scale. This level of demand necessitates rigorous and thorough transformation, making the telco environment one of the greatest illustrations for how to successfully navigate change from the inside out.

IDC predicts worldwide spending on digital transformation technologies will grow to more than $2.1 trillion in 2019. This clearly indicates the tide has turned and, no matter the industry, companies realize digital reinvention is the only way forward.

Achieving business success through transformation will take more than just joining the wave. Leaders in every organization have to rethink how strategic transformation will add value and meet the evolving expectations of customers, while also maintaining brand relevance in a world driven by continual change.

While it’s imperative to develop agile technology and practices for true digital transformation, that is only the tip of the iceberg. Lasting transformation must reach down to the cultural root of the enterprise. From my vantage point in working with global telecom leaders, here are the key ingredients to charting a course for end-to-end transformation:

Strong, actionable leadership at every level

In the late 90s and early 2000s I ran a company which offered monetization solutions in the early days of the internet. In that role, I rarely met with C-suite leaders. Instead, our focus was geared to those who ran the IT department as they made the decisions about technology implementations.

While my current company still deals in monetization, today I meet with the CEO of every Telco we talk to. Why? The executive team has gained an understanding for how IT implementations, and digital transformation in particular, impact the end user and the company’s bottom line . Gone are the days where transformative technology implementations are considered just another IT project.

One such example of a CEO leading transformation is Telstra, Australia’s largest telecommunications company. As far back as 2009 the company realized it needed to change. At the time, Telstra was racked by customer service complaints, slow connectivity and a general feeling of disconnect between the company and its end users. Then CEO David Thodey had a radical idea to not only improve trust and perception among customers, but to take it a step further and create an organization that was seen as proactively advocating for the best results for their users.

This kind of transformation would take more than just a surface-level change. The company had to revamp internal processes that would require buy-in and support from every facet of leadership throughout the organization. David spearheaded very actionable methods to achieving these goals. These included removing steps from, and improving, all customer processes; migrating transactions to subscriber-powered digital channels and making intuitive, real-time experiences for the user; and enabling new interactions via those digital channels that gave customers greater control and better products and services.

In order to achieve this, Telstra created a new organization to help identify and drive the critical areas for change. The company didn’t try to tackle everything at once, instead they created a strategic path and went after the biggest wins first. When the first wave was complete, Telstra was able to fold this unit back into the main company and drive digital competencies from the core organization.

While the company has a new CEO today, the honest-evaluation mindset and commitment to transformative leadership remain a key tenant of Telstra’s digital evolution, as evidenced by a recent announcement to simplify operations and products, improve customer experience and reduce the cost base through its new Telstra2022 initiative.

Rewire priorities and values transformation, by its very definition, requires risk. Without question the safety net lies in focusing on traditional success metrics like revenue and profit margins. To truly transform, however, requires a change in mindset about where value lies, particularly in the short term.

When undergoing digital transformation it may be necessary to accept a marginal metric such as flat revenue, while working to obtain improvements in other areas such as Net Promoter Score®, repeat or expanded customer business, or long term improved margins. Sticking through a successful transformation strategy will see flat metrics rebound as customer experiences improve, but the ability to weather risk will prove an invaluable asset in driving worthwhile change.

Domino’s Pizza illustrates this principle. In 2008 the company was looking at a bleak future, with sales declining, a rock-bottom valuation and a lackluster brand image. Customer complaints were at an all-time high, so rather than hyper focus on sales the company instead turned its attention to improving customer interactions, seeking direct and honest feedback from disgruntled customers, and creating easy-to-use digital experiences.

The sincerity worked and over the next six years Dominos saw its stock price rise from a measly $2.83 in November 2008 to over $70 in June 2014. While it took time, Dominos remained committed and stuck to its priorities of being transparent and honest with its customers. The long term results continue to pay massive dividends.

Domino’s and Telstra had one thing in common when they set out to transform their businesses: transparency. For too long companies have assumed that admitting fault or owning failure somehow weakened the business in the eye of the customer or against the competition, but the opposite has proven true – today’s consumers value transparency. Failure happens. The ability to honestly evaluate and seek feedback for improvement builds trust and confidence, helping every other initiative to be well received.

Empower your team

Digital transformation is not just about creating stronger customer relationships or even improving the bottom line. True transformation is also focused on creating a better company, from the inside out. This requires building trust and seeking support from internal teams.

In order for employees to better execute on a digital transformation strategy, they must be empowered. Empowered with better tools, empowered with better information, and empowered with the right opportunities to make decisions, satisfy their customer requests and drive productive change within their own sphere of influence.

As the saying goes, it is not change that is painful, it is resistance to change. In the past 20 years I’ve seen every manner of change take place across organizations – some who embrace it willingly and others who drag their feet reluctantly. What I’ve come to learn is change is inevitable no matter your attitude, so those who set themselves up for success are the ones who find the process invigorating.

Guest post courtesy of Dave Labuda, CEO and CTO, MATRIXX Software

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