Digital transformation isn’t an IT project stuck in a cost centre or in an innovation lab. It has to reflect the existing company brand, values, and people while also refocusing the business on building continuous processes for discovering new ways to solve customer problems and deliver value.
Digital transformation is the business buzzword of the decade as companies big and small try to understand how to transform their businesses in the face of changing consumer behaviour and ever increasing competition from disruptive new entrants. It’s a fundamental shift in how businesses look to deliver value to their customers, and crucial to their very survival, yet most of these companies are going about digital transformation completely wrong, and will fail to change as a result.
The problem is that most organisations going through a digital transformation think of it as a transformation project, rather than an ongoing cultural change. This is understandable as, for most of these organisations, anything digital has until now been the domain of the IT department. And IT departments have evolved to be service organisations, seen as cost centres and therefore focused on delivering projects on time and on budget. This is great if you’re tasked with rolling out new internal software, but falls far short of what’s required to rethink your business and how you deliver value to customers from the ground up. Because a project is at some point done, complete, shipped, and out the door – but like a business, a product is never done, and requires constant discovery and learning to improve, transform, and maintain.
All sufficiently successful businesses started out in discovery mode, trying to figure out how to deliver value to their customers, yet once they find that success and scale the business they inevitably shift to focus on optimising that business model and product, and eking out every last drop of efficiency and margin from it. But in order to transform to a digital world these companies need to find that discovery mode again.
Fund Teams, not Projects
Solving this problem starts with tackling how digital transformation gets funded and organised. Instead of investing in a project, invest in cross-functional teams with a broad remit to reimagine what your business can be in a new digital context. Staff that team with in-house experts from across the business and back them up with new hires who can bring new skills and different contexts to the table. Only by cross-pollinating the team with your existing company values and deep industry or domain knowledge from your existing business with new approaches and perspectives can you hope to challenge the status quo.
But you need to be careful with that in-house expertise. It’s always valuable to know what has – and hasn’t – worked in the past, but because everything else has changed around you and the business you need to be be open to trying again. So make sure those experts are just as happy questioning their own mindset and trying something that may already have been tried – and failed.
Give Teams Freedom
Once the team is in place they also have to have the freedom to rethink that status quo, focus on the customer, and imagine completely different ways of approaching problems. They should be aware of your existing constraints, as constraints can be powerful drivers of innovation, but they must be given the explicit freedom to ignore those constraints or work around them if need be.
Focus on Customer Problems, not your Solution
Fundamental customer problems almost never change. Take that most human basic need – shelter. We’ve always needed it but how we solve it has certainly evolved over time, from prehistoric caves through to today’s triple-glazed, energy-efficient houses. If you think of product as each house you ship you might embrace a project management approach. If you instead think about product as solving the fundamental customer problem you instead focus on better ways to solve that problem and can constantly evolve new products that do so, each one better than the last.
This is a Product Team
Congratulations, you’ve funded a team, and staffed it with great people. You’ve given them the autonomy to truly understand the customer problem and how your business might solve that problem given your unique capabilities and the opportunities presented in new digital technologies and business models. This is a product team.
And as a product team it needs to embrace modern product management as its core operating model – not project management. Modern product management is all about building a sustainable business model through delivering customer value – and ties together continuous customer discovery with rapid, iterative development to make sure you continue to stay ahead of competitors and market trends.
Now go spin up more of those teams and watch your whole organisation transform into a customer-obsessed machine for continuous innovation.