Digital Transformation: A Blueprint Beyond the Buzzword (Part 2)

Published On: March 17th, 20226 min read

Guest Post by Timo Loescher, Director, Strategy & Presales at DMI

Building a strategy around digital transformation is a bold move, and it involves many parts of a digital company working in tandem. But any strategy for a digital company needs to be built on four key pillars or values. I briefly introduced these four pillars in my previous post; in this post, I want to explore each of them in more depth.

What Is a Digital Company? 

Digital companies are customer-centric.

Customer-centric does not mean that you do occasional Voice of the Customer research. Instead, you should regularly engage with users and heavily rely on their input to help guide all key decisions.

A digital company builds deep empathy with its customers and incentivizes its employees to champion user perspectives (ideally perspectives that are steeped in real user research). They test their ideas with users, and they lean into understanding changing customer needs to ensure they are always building the right solutions. 

A manifestation of this mindset is usually visible in the headcount ratio of a company’s UX, Product, and Dev roles. There is a stark contrast between organizations fully committed to digital excellence and those that are new to the tenets of customer-centricity. Whether budgets are tight or growing rapidly, digital companies scale product and experience resources proportionally, ensuring that development teams don’t lose sight of customer needs, business outcomes, or ecosystem experience.

However, when non-digital companies scale down, they typically scale down design first, then product, then development. The immediate justification is that this allows them to make sure they can continue putting out code. However, the often-overlooked impact is the loss of clarity around whether developers are focused on the right things or are building those things in the best way for users.

This is incredibly dangerous in our “experience economy” — in which customers have total control and high expectations. The only way to compete long-term (read as, play the infinite game) is to be hyper-focused on your end-users.

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Digital companies are outcome-driven.

The second important characteristic of a digital organization is its emphasis on measurable outcomes. Rather than celebrating releases and developer throughput, these organizations focus on the impact that their activities have on the business and their customers. They focus on making intentional decisions that will drive outcomes, and they inform those decisions with measured data. 

To enable this in your organization, you should start by identifying your business goals and objectives and establishing a product vision based on the business goals. Then, identify key product goals and success factors that you can trace up into the product vision (and through the vision ultimately to the business goals).

Once you have these, you can build a measurement strategy specifically around these product goals. These goals can be prioritized, and activities (such as new feature development) can be identified intentionally to move the needle on those specific outcomes.

By regularly reviewing your metrics, you can reassess and be constantly confident in the fact that you are working on what is most impactful to the leading product performance indicators and to the lagging business outcomes that the product is meant to drive for both the business and the users.

Digital companies are composable.

The third key attribute of a digital company is composability. Composability is the idea that core services and functions are built in a reusable and extensible way, such that when a new application is needed to solve a particular use case (such as a re-organization or business model pivot), you can stitch together a few micro-UIs and APIs and be most of the way there.

There is some technical magic involved that I can only wave at vaguely, but — process-wise — there are two key operational enablers to composability. First, to build common core services as composable objects, you must break the silos in your business. You need to form a common language, explore a variety of use cases end-to-end, and model business domains to inform the core composable constructs needed. 

Second, when it comes to these composable components, you must consider two types of users: end users and developer users. End users are the ones for whom you are building the technology to help. Developer users are the ones who will need to string these constructs together to meet swiftly-changing demands.

It is common to see composability as a frontier of technical architects, and for IT orgs to think about the developers first as the primary users, but it is important to call back to the first pillar – customer-centricity – and recognize that none of this technology is built for the developers. It is to support the products’ users.

That said, you should also be leveraging best practice design methods when exploring documentation, authorization patterns, asset portals, and other core aspects of the developer experience.

Digital companies are agile.

The last pillar should be no surprise — speed and agility are well-known tenants of a digital company. However, rather than regurgitating the Scrum Guide here, I want to press into some of the aspects of Agility where I often see transforming companies get caught.

One pitfall is setting hard, fixed budgets and timelines to then “sprint towards.” If the leadership has set expectations for certain deliveries in a 6+ month time horizon, they are (intentionally or not) putting pressure on teams not to adapt to user feedback. It’s not objectively the wrong way to run a business, but it’s not the digital way. To combat this, try sharing a prioritized feature backlog with your key stakeholders. Show them what can be completed in the next three months (maybe plus or minus a feature) and ask them to help you prioritize where to focus. Bonus points if you use outcomes and customer data when doing so. 

Another Agile concept that is often left out of development organizations is experimentation. When going fast into the unknown, you must try many interesting things. These ideas may result in small failures; oftentimes, the only way to learn anything concretely is to see it fail. There is a reason the scientific method works by intentionally trying to invalidate hypotheses. Embrace rapid failure cycles as a part of the journey to big wins.

As soon as you can begin seeing releases as tests intending to validate customer research (and ultimately drive outcomes), and when you can accept failure as equally useful as success in that validation, you will begin to see the power of real Agile principles in play.

The Values of a Digital Company 

When building a strategy around digital transformation, an organization must recognize the size of the difference between their legacy operations and that of their desired model. Roles, budgeting processes, organizational structures, and communication cadences all must be adjusted in unison.

If the vision, mission, and values don’t line up, or if the incentive structures don’t support it, the transformation will likely fall somewhere on the spectrum between “nice idea” and “total delusion.” It will be impossible for the business to get traction.

An organization must jump into digital transformation head-first on all facets, and leadership must live the above values as much as (or more than) they expect from their teams.

We take pride in cultivating strategic visions for our clients. Allow our consistent focus to help support the customer experience by improving your business through technology innovation, contact us to begin the journey. 

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