First things, first
Digital transformation always begins with a clear problem and an aspirational goal. And that comes from your understanding of the potential of your product in helping to solve your customers’ needs.
This quote from the Executive Vice President of ERT for The Enterprises Project, Jay Ferro, captures exactly what you should be thinking to kickstart your company’s digital transformation journey:
Digital transformation should begin with a problem statement, a clear opportunity, or an aspirational goal. The “why” of your organization’s digital transformation might be around improving customer experience, reducing friction, increasing productivity, or elevating profitability, for example. Or, if it’s an aspirational statement, it might revolve around becoming the absolute best to do business with, utilizing enabling digital technologies that were unavailable years ago.
To initiate your company’s digital transformation journey, ask yourself what your product is really capable of doing for your customers. Also, frequently brainstorm ways to adapt your business and processes to use newer and promising digital technologies.
What successful digital transformations have in common
In almost all the documented success stories of digital transformation efforts, the consumers have been the primary focus.
All the companies that became successful with their digital transformation endeavors focused heavily on improving their delivery of value to their customers.
Marc Benioff, Salesforce Founder, and CEO said it best when he said every digital transformation effort is going to begin and end with the customers.
To kickstart your company’s transformation journey as a founder, you need to:
- Actively be in the loop with the evolution of technologies
- Develop the willingness to constantly adapt your business processes.
Digital Transformation in companies
Typically, what constitutes transformation is different from company to company. The thing in your company that needs to be transformed to make it noticeably better for your customers depends on the type of business that it is and how it operates.
Regardless, kickstarting a digital transformation effort in your company is not so hard. It just means adopting a culture that provides constant and iterative value enhancement for the products or services your company offers.
In most cases, initiating digital transformation in your company typically begins with having a hypothesis about your product’s value to those customers. Then identifying their arising needs, and constantly exceeding them with newer solutions.
Digital transformation examples
If you are wondering why it’s important for companies to be transformation minded, It is simple: digital transformation is a survival mechanism.
Businesses that have the ability to quickly adapt to rapid changes to their business landscape tend to have a culture of transformation built-in. One such company is Netflix.
Netflix is the most well known example of a company that has leveraged and continues to leverage digital transformation in its business.
The streaming giant first witnessed the benefit of continually using modern technologies to meet the rising needs of customers recently. Two decades after the creation of its proprietary recommendation engine, Netflix introduced a massive change to it. The change uses advancements in machine learning and artificial intelligence to understand patterns in the behavior of Netflix’s users to better recommend movies to them.
Netflix’s vice president of product innovation confirmed this change in an interview with Wired:
“The three legs of this stool would be Netflix members; taggers who understand everything about the content; and our machine learning algorithms that take all of the data and put things together.
Image credit: Unsplash
Netflix’s change to its video recommendation algorithm increased its efficiency and consumers’ satisfaction with its movie recommendations resulting in an astonishing 80% jump in watch time on its platform.
To put that into concrete figures, it saved the company over $1B in annual customer acquisition cost.
The algorithm behind the change to Cinematch — Netflix’s proprietary recommendation engine. Image credit: Wired
Another example of how having a digital transformation culture has helped a business is in the case of Ferguson.
The distributor of plumbing, heating, ventilation, and air conditioning supplies recently saw a significant boost in profits. This is just months after it replaced its legacy CRM system with a more powerful one. According to Ferguson, the change was to help staff quickly access customers’ information and streamline the purchase process for them.
As you have seen, kickstarting a digital transformation culture is not so hard.
Although, it may seem like the companies who have benefitted from being hyper-competitive due to their culture of transformation have something else that keeps them competitive, I am sure that whatever that is, their success with initiating a digital transformation culture following the pattern we discussed in this article is a big part of it.