Statistics prove that digital transformation leads to revenue growth. If companies want to evolve, they have to embrace digital transformation and challenge the status quo.
According to BCG, companies that have transformed digitally outperformed laggards by 13% in yearly revenue growth.
Despite these positive results, why are many companies still not exploring the full potential of the digital transformation?
The spectrum is quite broad. A few companies have fully adopted digital transformation, while the majority adopted some sort of change, but they weren’t able to completely disrupt their organization. Over the years companies have been forced to transform their processes and products, because new competitors entered the arena (e.g. Airbnb, Uber). However, the majority made partial changes and took small steps into this direction, keeping the same business model, same customer structure and same operating systems that they had 10 years ago. They moved forward, creating a new website, or improving their digital content, but they embraced this change in terms of new advanced technology.
According to McKinsey, although 9 out of 10 companies are engaged with some sort of digitalization, only 1 in 6 is creating a bold strategy.
If you follow what your competitors are doing, most likely “you are doing digital” but “you are not digital”. Being digital is strategic; it involves a change in your mindset, instead of simply following what your competitors are doing.
To embrace a real transformation is necessary an internal change: companies should look more holistically at their organization, make a 360 degree change, and rethink the organization in terms of leadership and culture, approaching a new way of thinking, and then innovating products, processes and business model.
Companies that have succeeded in this change share few elements:
· Clear Strategy: defining what the organization wants to achieve with this transformation;
· Operational agility: being flexible, and adapting overtime.
· Organizational structure: not more silos structure but more cross-functional teams.
· New culture and leadership: embracing a new culture that fosters change and risks.
· Workforce enablement: empowering people, developing their talents and skills.
· Customer centricity: putting the customer first and being adaptable to their needs.
· Digital technology: investing in technology, software, AI, innovative products
A digital transformation is a merge of technology and strategy. If you want to succeed, you have to be agile, adaptable, willing to take risks. Experiment, rethink, fail fast and learn fast.