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Innovation & Development7Written by Christian NielsenStrategy & Business Development DirectorMonstarlab CanadaMarch 2023Seven Guiding Principles forDX
IntroductionDX (Digital Transformation) has been part of our business lexicon for about a decade now and yet, it remains a buzzword to most people. And that’s really too bad, because underneath the buzzword lies great potential for businesses to generate new value, as well as revitalizing existing sources.A key reason why digital transformation remains poorly understood is primarily because there is no blueprint – there is no one-size-fits-all solution. It is much more about the art of the possible. I find it useful to think of it as a modernization of a company’s infrastructure, because of its influence on culture, structure, and processes.The good news is that despite its elusive character, it turns out that some approaches are far more eective than others when it comes to DX. Based on my experience helping clients through dicult digital transformation eorts over the years, I have identified a set of useful guiding principles. I know it is a bold claim, but from implementing these across dierent contexts, I have come to believe that these seven guiding principles provide universal and enduring guidance regardless of circumstances, goals, strategies, and industry.2“Think of DX as a modernizationof a company’s infrastructure.”Written by Christian NielsenDirector of Strategy
3Seven Guiding Principles for DX1234567Make it about peopleInvolve people genuinely by enabling them to influencehow your strategy should be implementedOnboard people before you flyGet people to recognize that the status quo is moredangerous than the unknown reality of changeMake it strategy-ledDefine the business objectives first and work backwardsfrom there by identifying enabling technologiesMake it a cross-functional olympicsMake digital transformation cross-disciplinary by involvingpeople both vertically and horizontally across your organizationMake progress tangibleProvide and celebrate results with compelling evidence ofsuccess to avoid losing momentum over timeApproach it as artEmbrace an experimental approach where truly empowered employees are encouraged and recognized for taking risksZero in on value creationDefine what success for your business looks like
41. Make it about peopleLike any change process, digital transformation is about people first and foremost. Only when people are personally motivated to change their behavior is there hope for transformational change over time. To increase your chances of success it is instrumental to involve people by enabling them to influence how your strategy should be implemented. If you have children, you know how eective it is to give them a choice. People want the freedom to execute and given their hands-on experience, management is better o delegating instead of giving detailed instructions. This approach is not to be confused with letting employees freely define the what and why (strategy), because leaving such decisions to people who do not have a general business overview and influence will only cause analysis paralysis. As a result, a “consensus” approach to strategy will jeopardize your progress.2. Onboard people before you flyIt might sound like common sense, but you would be surprised how many change management projects get kicked o without first ensuring a strong buy-in from people in an organization – even the key stakeholders. Based on my experience, the most eective way to ensure buy-in is to identify a clear sense of urgency for change widely recognized by numerous people throughout the organization. It often ends up revolving around a competitive reality in the external environment, but internal factors such as low employee satisfaction, attrition, etc. (which people can personally relate to) are often more eective in my experience. The Covid pandemic created some good examples, e.g. legitimizing an open dialogue about work culture and mental health. The point is to identify a topic where people recognize that the status quo is more dangerous than the unknown reality of change because this will help you get people onboard your transformation “airplane”. Giving people an opportunity to genuinely influence the way forward is immensely powerful.
5People tend to think that digital transformation should be led by technology, but it really shouldn’t. Instead, you will achieve much better results and avoid wasting resources if you make DX strategy-led, because only strategy can provide a real reason to both people, resources and technology. Please don’t get me wrong, technology definitely matters. Digital technology has played an instrumental role in developing society and the way we do business ever since the Digital Revolution began in the latter half of the 20th century with the transition to computers and digital record-keeping. What is critical to acknowledge, however, is that actual change is a result of human acceptance and adoption, not the existence of technology itself. Technology “only” enables and facilitates change. While technological advancement has picked up, this principle stays the same. As tools, digital technologies are great enablers of both improving existing ways of creating value, and creating entire new ways, but only when it is aligned with the strategic objectives of your organization will it generate value eectively. Technology-led DX in contrast happens when companies make technology investments first and make business objectives an afterthought. A better way is to clearly define the business objectives and work backwards from there by identifying enabling technologies. In other words, put strategy in the driving seat of your digital transformation, and bring technology along on the backseat.3. Make it strategy-led“Technology can facilitate and accelerate transformation, but technology cannot cause transformation.”
64. Make it a cross-functional OlympicsPeople often refer to digital transformation as a marathon, not a sprint. In my experience, it's much more complex than that. It is more useful to think of it as teams competing in a never-ending Olympics across multiple disciplines where they utilize dierent skills to compete most eectively. Similarly, you need to make digital transformation cross-disciplinary by involving people both vertically and horizontally across your organization, because not only will they be able to utilize their skills, but more importantly, also their relationships with colleagues in key positions. This means identifying and engaging “Change Champions”; who are people with a positive attitude and strong social influence who can get things done.5. Make progress tangibleFew things beat tangible results when dealing with change. Take advantage of this fact by focusing on a series of “low-hanging fruits”, characterized as powerful results that can be achieved with the least eort within 612 months. Real transformation takes time, it is eectively a never-ending process, so it is instrumental to be able to provide and celebrate results with compelling evidence of success to avoid losing momentum over time. Try rewarding people with genuine recognition and promotions. In my opinion, it's the most eective way to support the push toward change.
76. Approach it as artThis can be a really hard principle to follow in a lot of organizations, because “art” is often perceived as a negative – a “fluy” thing people do in their spare time. As a consequence, digital transformation is treated mostly as a science that gets employed with a “tell ‘em, bribe ’em, force ‘em” mindset to facilitate compliance. Besides paying more attention to how people feel about the unknown reality of change and guiding them through the fact that human beings are naturally resistant to change, management must relinquish their usual control processes and instead embrace a far more experimental approach, where truly empowered employees are encouraged, supported and recognized for taking calculated risks. Leveraging agile work principles is a great approach in my experience, because it empowers people to create results pragmatically, through the art of the possible. Enabling thoughtful risk-taking is key. 7. Zero in on value creationThe purpose of digital transformation is not to become digital it is to create value for your business. This is key. With this in mind, you will want to define what success for your business looks like, because it will focus your attention and resources while also enabling you to measure progress. You will also have to work hard to define your success metrics, because of the arbitrary nature of value. While financial measures are mandatory for a business, I strongly encourage you to also include some “value-based” metrics, because only with these will you be able to capture the true quality dimension of your eorts.
8Value-based Measure ModelWhile the measures for you to use will naturally depend on how you have defined success, here are some examples of “value-based” measures that I have seen companies benefit from, besides the classics, like return on investment, cost-benefit, productivity, digital maturity, etc.PURPOSE:TO GAUGE ...RECOGNIZE THE DXVISION / STRATEGYCHANGES IN YOURORGANIZATION’SSOCIAL CAPITALCHANGES IN BRAND PERCEPTIONRELATIVE NUMBER OF CHANGE ADVOCATESNUMBER OF TANGIBLE RESULTSCHANGES IN FAILURE RATE... IF PEOPLE KNOW IT AND CARE... HOW INTERNAL NETWORKS ARE CHANGING... CHANGE IN ORGANIZATIONAL AGILITY... CHANGE FROM AN OUTSIDE PERSPECTIVE... THE ADOPTION RATE OF YOUR DX... TRACTION AND MOMENTUM OF YOUR DX... CHANGE IN LEVEL OF EXPERIMENTATION“The purpose of DX is not to become digital it is to create value for your business .”
9Success with digital transformation won’t come easy, because it is a complex and long-term process. The challenge has only become more acute over the past two years, as digital technology adoption – and its strategic importance – accelerated dramatically. Hopefully, these seven guiding principles will resonate with you and help you on your journey. As much as I’d like these seven principles to be comprehensive, I know that my experience on such a complex topic is not exhaustive so please reach out with any questions, feedback, add-ons, comments, etc. Christian Nielsen — Director of Strategy christian.nielsen@monstar-lab.comMonstarlab is a digital consulting company that delivers on the art of change for businesses. Based on our 20-year heritage of designing custom digital products, we help management deliver on their strategic objectives through human-centric transformation facilitated by technology.MonstarlabChristian started his career as a management consultant helping incumbents like Philips and AkzoNobel create innovation breakthroughs through forceful change processes. He has since ventured into the digital world where he has delivered digital products and digital transformation for clients in all shapes and sizes, from bootstrapped startups to global corporations, across various countries and industries such as finance, fitness, utility, insurance, transportation, and retail. Christian Nielsen©2023 Monstarlab. All rights reserved.