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Why Do Digital Transformations Fail?

digital transformation fail e1604692626747Is there a recipe to avoid failure in digital transformation?

Tony Saldanha, the author of Why Digital Transformations Fail: the Surprising Disciplines of How to Take Off and Stay Ahead, says yes. As the former Procter & Gamble Vice President, Saldanha explains that after setting the goal of digital transformation, adopting an iterative execution approach will ensure speed and result in success.

This means your company needs to “iterate through ideas” and expand only on the ideas that work to grow your organisation.

An iterative approach secures the necessary speed required for digital transformation, similar to the take-off of an airplane.

According to Saldanha, this type of iterative execution has 6 steps:

  1. Identify the Big Business Opportunity:

In short, set goals. Disrupt a ‘specific part’ of your business to deliver cost-savings, top-line growth or enhanced user-experience.

  1. Identify Transformation Ideas

You must determine the digital leverage points that will have the biggest impact on your company’s digital success.

  1. Create a High-Risk/ Low-Risk Portfolio

Adopt an elimination strategy, e.g. 10-5-4-1, where for every ten experimental projects, kill five. Of the remaining, four might turn out to be 2x or 4x as valuable, and the remaining one would be 10x as valuable.

  1. Use Iterative Design Processes

This helps hone in on the desired business outcome.

  1. Use Iterative Execution Methodology: agile or lean start-up.
  2. Roll Out Successful Projects Only

For further speed, tackle these two barriers :

1-) The Clock-Speed issue

The normal pace of decision making and operations. An ‘Exponential series 1-2-4-8-16 model’ is recommended to address clock-speed issues: for experimental innovation projects, spend 1 month on landscape assessment,  2 months on design, 4 months on hypothesis testing, 8 months on field testing and 16 months on roll-out.

2-) The Two-Worlds issue

The realities and processes of the existing business versus the requirements of the innovating organization. To avoid this, an ‘innovation firewall’ is recommended where the digital transformation office has separate processes and a different reward system than the standard organization. A 10-5-4-1 risk system also establishes a fear-free setting where failure is allowed and encouraged through killing projects.

“Speed and iterative execution complement each other to dramatically reduce the risk of failure in digital transformation.”

Tony Saldanha

 

This article is a part of our monthly Digitopia Digest:
Digitopia Digest is a monthly newsletter showcasing the latest news in digital transformation. If you are determined to discover what to do next in your organization to achieve digital success or are simply interested in digital technology and innovation, please subscribe for updates.


Digitopia Digest is a monthly newsletter showcasing the latest news in digital transformation. If you are determined to discover what to do next in your organization to achieve digital success or are simply interested in digital technology and innovation, please subscribe for updates.

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Gözde Ünalacak