Successfully Navigating Transformational Change in Digital Technology: Part One

With the pace of change so rapid, how do companies identify which digital technology to invest in, develop it in a way that matches their needs and, most difficult of all, successfully embed it within their organisation to achieve the benefits envisaged?


“I would recommend this article to anyone who is embarking on or involved in a digital transformation.

This resonates with my experience of the Digital Transformation within Vodafone Business, highlighting all the critical considerations needed for success. I have headed up business change within Transformation during our journey from traditional waterfall projects to Agile ways of working and it has been equally a challenge and a fantastic opportunity. Moving to Agile has enabled us to work in true collaboration with our business stakeholders to co-create solutions, overcome problems and deliver real business value.  However, as highlighted in the article, it has also required a complete mind-set change across all levels of the organisation, and in our approach to managing change. 

I believe that for businesses to thrive in this digital world, this change of mind-set and behaviour is vital. Change management practices must adapt to support sustainable change that makes your business fit for the future.”


- Jo Biggin, leading Business Change teams within Vodafone.
 

The advent of mobile, automation, AI and the Internet of Things, to name a few, have enabled digital technology to infiltrate every aspect of consumers’ lives creating millions of ‘digital natives’. Consequentially, their needs and expectations have changed. Consumers are now developing clear-cut views on what good and bad experiences looks like – is the technology delivering the experience they want? Is it meeting their functional and emotional needs? If a company fails to deliver against one or multiple factors then consumers are quick to move on to businesses that can better meet their needs. And the competitors are quick to step in. 

2/3 of businesses know they must digitise by 2020 to stay competitive1

The democratisation of digital technology has lowered the barriers to entry at which companies can enter new markets and provide new and/or tailored technology solutions. These new entrants, and some established players, are investing time and effort in to uncovering and creating solutions that deliver against changing expectations, meet underlying needs or bring across best practice from other sectors to disrupt the market. 

In response to the combined widespread changes, companies are increasingly asking how they can keep up with the pace of change, going above and beyond their customers’ expectations to stay ahead of the competition? One key answer is to explore how digital technology can be used as an advantage. But how do companies identify and develop the technology they require? And how do they successfully embed digital technology solutions to ensure a sustainable advantage?

In this two-part perspective, we will explore the importance of strategy to set direction and Agile practices for technology development. The following perspective will then explore how an agile mindset and approach to change management can be applied to deliver successful digital technology transformations.

Strategy: Using customer insight to guide where you are heading and why

Successful digital technology transformations start with a deep understanding of who the end beneficiary is. 

Before identifying which digital solutions to explore, it is vital to understand who the target audience is currently, and who they might be in the future, and what their fundamental needs are - the functional, emotional and social. However, to truly identify their needs requires asking more than ‘what good looks like?’. Companies need to find out what their target audiences want to achieve - digging deeper to uncover their underlying objectives. But be aware, because as Steve Jobs famously said “A lot of times, people don't know what they want until you show it to them”2 so don’t expect any immediate lightbulb answers – for Steve Jobs this meant ignoring research and believing that people would need an iPad if they could see the value add it would bring. To identify the underlying what people really want does however requires testing hypotheses, empathetic questioning and design thinking to uncover the needs and develop a sustainable business model.

Diagram 1: The stages of desigining an organisational strategy.

A successful organisational strategy should bridge the gap between the company’s purpose, its end goal and the direction needed to solve the organisation’s problems

Once you have identified a target audience, setting a clear vision and engaging purpose will give the organisation and the people – both internal and external – an end goal to work towards. The internal directive should structure the business priorities and investments, as well as provide clarity on which initiatives and KPIs3 to measure against. In the case of Qatar Airlines, they have used their mission of ‘excellence is everything we do’ to focus the organisation’s priorities, goals and internal stakeholders around putting safety first, customer focus driving their service and hospitality, and a commitment to people4. By using the mission as a guiding vision, it gave them a direction to follow when designing and refining their customer service, their fleet strategy, people strategy and even their CSR5 strategy. The result, Qatar Airlines has been voted the world’s top airline in 2019. The ever-growing success of Qatar Airlines shows the importance of using the organisational vision and strategy to inform key departmental strategies, including the digital technology strategy.

Only 70% of organisations have a digital transformation strategy or are working on one6

For technology and digital teams, a strategic and holistic approach means the ability to develop a digital technology strategy, identify new priorities, and adapt the operating model to ensure it relates back to the organisational vision thus an efficient and effective use of time, finances and people. One approach to identify key priority initiatives and how to invest wisely is the use of strategic digital technology roadmaps to identify and plan out priorities. By clearly laying out priority solutions, the sequence they need to be developed and the departments and stakeholders that need to be involved it aligns the organisation and brings accountability before transformations start.

Bringing Agility and Innovation to the forefront

New entrants are disrupting markets with a lean start-up mentality. Employing a ‘pivot mentality’, these start-ups can be more radical and rapid with the design, development and the embedding of digital technology solutions; an approach which can only come about through more Agile iterative ways of working. None the less, whether you are a traditional incumbent or a start-up, attempting to adopt Agile practices to technology development is often easier said than done. So how do you create the right environment and approach that enables iterative technology development in an organisation? 

When working with an established FTSE100 building material distributor, Moorhouse worked collaboratively to define the IT strategy and articulate the IT roadmap. The roadmap identified short-term wins as well as long-term initiatives which were periodically reviewed using value-based decision making. The project teams applied a pivot mentality across the portfolio of IT initiatives to ensure they were addressing clients’ needs and aligned to the leadership vision. By the end of the programme a set of simplification initiatives had been identified to achieve a £5m saving as well as delivering results efficiently and cost-effectively.

69% of COOs believe digital transformation initiatives are held back by CEOs, Boards of Directors and Senior leadership7

Our experience has shown that it firstly relies on building and encouraging a culture of innovation, starting with the leadership. To unleash the power of Agile delivery, whilst aligning to the organisation’s vision and strategy, requires leaders (both the Executive leadership team and technology leaders) to visibly and implicitly commit to the change of approach from day one. They need to build a learning environment where failure and continuous improvement is encouraged. However, it isn’t enough to simply put a message on Agile ways of working out in a piece of internal comms, the leaders have to bring the organisational vision to life, role model the new desired Agile approach and behaviours, invest it in financially and emotionally, and encourage the environment that fosters digital technology innovation.

In combination with exemplifying the right behaviours and visible commitment, an Agile approach can only be successful when teams are given the power to test and develop products in real-time, instead of being structured to deliver business as usual (BAU). If they are allowed to think with a long-term mindset and the continued support to refine digital technology transformations, even when the first few successful iterations have been launched, it can transition existing teams from BAU-focused into dedicated Agile teams. The Swedish teleco company Tele2 had the goal to increase the speed and effectiveness of their service but they realised this wouldn’t be possible without a shift towards an ambitious reorganisation of their organisation. They adopted an Agile methodology for their teams, introducing ‘tribes’, ‘squads’, and ‘chapters’ (similar to the Spotify model), and gave them the time and resources they needed to review and improve operations across the organisation8. As a result, Tele2 revolutionised their digital customer experience, increased collaboration and innovation, as well as increasing market share and a growth in revenue. By ensuring Agile teams have the time and space they need it not only provides a safe space for the necessary trial and error, it can also speed up the technology development time – a key hurdle many Agile teams have to overcome when companies start investing time, effort and money in large-scale digital technology transformations. 

Dedicated cross-functional Agile teams with a shared goal 

41% of companies say they have a dedicated digital transformation team

The development of a more Agile approach to transformation should be supported through the development of cross-functional project teams combining the expertise and viewpoints of dedicated technology developers, change managers and key internal stakeholders. 

As part of Centrica’s strategy to deliver for the changing needs of our customers, the UK CIO, Mike Young, has sought to increase operational efficiency through the digital transformation programme10. In an effort to use data more effectively and end siloed IT transformations, the UK has proactively created IT teams made up of staff from across the different areas of the business who can bring their own expertise to the organisation’s technology developments11. The result of developing multi-expertise teams means they bring different perspectives, work collaboratively to break the solution up into manageable chunks, and can employ an iterative approach to the design, testing and refinement of minimal viable products using real-time feedback. For a business this means they can deliver high quality solutions quicker, fix issues sooner and gain a higher degree of employee and customer satisfaction. At the Healthy London Partnership (HLP) and NHS England (London), Moorhouse brought together a team of IT suppliers, HLP and NHS stakeholders and used an Agile ‘Scrum’ delivery approach to design their ‘digital first’ vision. Instilling Agile principles across the cross-party project team meant they could align around the same transformation objectives, work together to build patient-centric digital services and resolve issues up front thus speeding up the time to full implementation. Once implemented, the intelligent routing of London 111 calls meant that in one month, 2,320 callers were successfully prioritised to the top of the call queue based on worsening conditions presented.

Diagram 2: Agile team members

It is worth noting that bringing people together who don’t understand agile ways of work and/or don’t usually work together, can be a barrier to overcome. When delivering a change transformation project for a large UK teleco company, Moorhouse identified mismatches in how leadership and teams understood the practice and benefits of Agile. To ensure all levels of the organisation understood the concept and application of Agile delivery, Moorhouse created and rolled out a special coaching and leadership development programme focused on what Agile looked like, the principles underlying it, the benefits for individuals and organisations, and the tangible steps people could adopt in their teams. When training is targeted to the specific audience and carried out with the right stakeholders it acts as a valuable step on the road to embedding Agile transformations and can bring benefits to employee engagement, L&D and business performance. These benefits were experienced by British Red Cross when they adopted an Agile approach to improving their end-to-end volunteer journey - resulting in a doubling of the conversion rate of applicants to volunteer.

To support the change in team structures and shift to agile ways of working, there also needs to be clarity on roles and responsibilities within the team, for instance making it clear who the ‘product owners’ are and who the change management individuals are. To support the Scrum Master and the product owners, the change role needs to be the voice of the business - reminding the project team and end users of the vision, connecting how individuals view their day job and the bigger reason for change. By engraining a change person in the solution development team, it ensures they are also close to the development of minimal viable products and can adapt the change management process by combining their digital technology insights with an end user view.

Embedding Agile beyond product development

In this first part of the series we have outlined the importance of strategy and Agile for digital technology transformations:

  1. Know where you are heading – identifying the target audience and their needs enables the setting of a clear vision and engaging purpose to give the organisation and its people an end goal to work towards
  2. Bring agility and innovation to the fore – building and encouraging a culture of innovation and learning, starting with the leadership, where Agile principles are embedded into ways of working across the organisation
  3. Dedicated cross-functional Agile teams – the development of cross-functional project teams that share a common goal and bring together the expertise and viewpoints of dedicated technology developers, change managers and key internal stakeholders

We have explored here how to shape and drive the delivery of your vision using digital and Agile principles, in the next part of this series we will cover how to embed agile ways of working in your organisation through a more iterative, real-time approach to change management. It will look at how organisations can shift away from a dedicated, siloed change management team who employ a pre-defined change framework, in a bid to truly embed Agile and ensure the long-term success of digital technology transformations.

 

References: 

1. https://www.cnbc.com/2019/10/30/heres-why-ge-fords-digital-transformation-programs-failed-last-year.html

2. https://www.forbes.com/sites/chunkamui/2011/10/17/five-dangerous-lessons-to-learn-from-steve-jobs/#2b51e7493a95

3. KPI – key performance indicator

4. https://www.qatarairways.com/content/dam/documents/annual-reports/2019/ENG_Annual_Report_2019_V2.pdf

5. CSR – corporate social responsibility

6. https://www.ptc.com/en/product-lifecycle-report/digital-transformation-changing-business-models

7. https://financesonline.com/digital-transformation-statistics/

8. https://www.adlittle.com/sites/default/files/reports/adl_digital_dividend-min_0.pdf

9. https://ofs-portal.com/wp-content/uploads/2016/06/Digital-Transformation-Report-Final-052118.pdf

10. https://www.centrica.com/content/annual-report/pdf/2018%20Annual%20Report.pdf

11. https://www.cio.co.uk/it-leadership/how-cios-align-it-with-business-strategy-3680592/

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Author

Avarina Wilson Dyer Gough Senior Consultant