Insights

Digital Transformation is a Business Transformation

Chief Delivery Officer
Valtech

July 02, 2018

Digital transformation is a buzzword – and one, that we ourselves use to define our entire identity with. Reality is, that Digital transformation is an illusion - unless it’s backed by a genuine Business transformation, rethinking the entire company, turning its ideas, strategies and organization upside down and inside out.

Is Digital Transformation really about Digital?

Many companies choose to embark on the long, and often treacherous journey called Digital Transformation. The trigger is often the need to implement some new digital platform, with the goal of dramatically improving the digital channels and their impact on the business. Not only with an objective to increase revenue and cost efficiency but often also to open up new markets, improving brand awareness or other softer goals.

Unfortunately, many are focusing on getting the technology in place first and then afterwards checking if changes are needed to the organization. The result of this is often times, well, a lack of results.

A technical platform has no chance of achieving these expected objectives on its own. It requires fundamental changes within any organization and even requires changes concerning how other channels, touchpoints, and processes tie into this. It is a transformation that relates to and requires changes from the entire business – not just the digital part of it.

From Digital to Business Transformation

Our experience has shown time and time again, not to expect anything to happen by chance - No matter how digital a mindset a company believes its employees possess. That’s why you need to start the other way around, focusing on internal structures and governance structures. Management has to make some big decisions on how much they are actually willing to change the company, in order to embrace the new digital possibilities. This can include:

- Changes to the organization including the creation of a digital office
- Changes to sales and channel strategy
- Changes to marketing – how it’s organized, structured and executed
- Changes to supply chain, production etc.

But first and foremost they need to back the change 100%. Also putting their money where their mouth is. Otherwise, these transformations end up at the ‘failed project graveyard’ – and the room there is getting increasingly tight.

That’s why we prefer to talk about business transformations rather than digital transformations – because one is not achievable without the other.

Preparation, alignment and commitment

It’s absolute key for a successful transformation, to prepare the entire organization. This preparation comes in various small bites – equally important.

First, you need to start with management, as we’ve already touched upon. It’s not simply about convincing them to back the project, it’s about making them truly unite around this entirely new way of looking at their own organization – including structures of decision-making.

it’s about making them truly unite around this entirely new way of looking at their own organization – including structures of decision-making

More often than not, they’ll have to give more people more authority and mandate. Anything that has to do with digital, needs to move fast in order to keep up with the market. That leaves no room for prolonged processes for decision-making. Empowerment down the chain of command is therefore often key.

Next step, after getting management on board, and ensuring a chain of command that’s broad enough to avoid bottlenecks, is aligning everyone. Ensuring that everyone is focused on a new common goal. The scope of this part can easily be underestimated, but it is crucial to take the time necessary, to get everyone aligned. This cannot, I stress – it Can Not be achieved by sending out an email or making a nice video telling everyone about the new strategy.
It requires time and resources for in-depth cross-functional workshops involving every player in the organization.

Imagine; your people working with design, accustomed to a creative liberty having to work completely aligned with your people working on the technical landscape, laser-focused on response times, stability and so forth. If they’re not aligned on everything and really understand the why, then your project will easily drown in quarrels and disputes, getting delayed and in the end providing you a product of reduced quality.
That’s why you’ll often need to start small.

Start with a focus on the most crucial items, what’s most important to your end-users. Stick to the basics and then add on later. Fancy functionalities can come at a later point. From there you build a plan, where your cross-functional teams can see smaller goals along the way – envisioning that everyone’s’ needs and preferences as part of the common goal, will be realised at some point in the project.

Leading us to commitment. A crucial element– direct involvement provides stronger commitment. Commitment to the project, commitment to the team and commitment to the end product.

Uniting to put Digital first - The case of L’Oréal

All of the above insights are not just fancy words. It’s hard earned learnings from various projects that’s taught us to walk the walk with our clients– to the end. Take for example our record-breaking case with L’Oréal. What does it take to become the #1 leader in digital beauty? The short answer: A lot!

During the last 5 years the world’s leading beauty company, L’Oréal, has been on the long road to transform their business, in order to reach this ambitious goal. It started with a bold decision from the CEO to put digital first - in all parts of L’Oréal. From creating a Chief Digital Officer position and going even further - giving it a spot in the top management team and completely reinventing the marketing model.

L’Oréal followed the crucial formula – starting from the inside out. Ensuring that every member of the organization, from Marketing, to support, to sales, and everyone in-between, was on board and felt like part of a joint digital venture.

Top management sponsorship and a radical organizational change was put in place

They decided to put digital first, and they knew that they needed to get everyone behind it, in order to get there.

Top management sponsorship and a radical organizational change was put in place before L’Oréal initiated this huge program, that is currently implementing the new global digital platform across their many brands.

And no, they didn’t just send out a nice email from the CEO, stating the new direction. Their new methods and brand new ways of thinking was communicated through numerous workshops, change programs and continuous reflections and improvements.

A journey with many potential potholes – paved by aligning and uniting

The journey L’Oréal embarked on, is a great example of why it’s absolutely necessary to prepare, align and commit. Their path was one with more potential pitfalls than usual – With more than 600 different websites divided between 15 different brands and north of 80.000 employees, it was absolutely crucial to align and unite them around a common goal.

In this case, the best way forward was to unite all brands, around a platform with a shared digital library of components for each brand and country to pick and choose from. Enabling brands and countries to diversify depending on their markets, whilst still working from a common framework that not only ensures brand compliance but in particular ensures efficiency and a faster time to market.

No program or project is perfect, and surely we have learnings from our endeavours with L’Oréal as well. However, along the way, it has been evident, that the united commitment towards their goal of becoming #1, the common understanding of a new digital identity, the necessary changes in organization and methods, the alignment of necessary objectives along the way – across brands, has all been essential for this program to succeed.

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