Businesses globally share the challenge-
How to adapt their organization to facilitate Digital Transformation?
Where does change begin?
Digital Transformation is the key phrase among senior leadership. It manifests in organizations under many different names: Digital Transformation Accelerator,Rapid Innovation Unit, Digital Services Unit, Digital Acceleration Team, and Digital Transformation Unit. The nature of this manifestation can be an internal or an external disruption, as James McQuivey reports in Organizing for Digital Disruption: Where and How to Ignite the Disruption You Need:
- “Internal disruption teams can get results when the company’s culture is trapped in status quo mode but C-level support for disruption is strong. Separating out an internal team can free it from cultural baggage and show naysayers that innovation is possible.”
- “External disruption teams can succeed when a company is up against both cultural and structural obstacles. If that’s the unfortunate state of your company, then going outside for innovation may be your only choice.”
Internal teams will generate long-term sustainable solutions to digital transformation (see “Customized DTAs” section below), while external teams provide needed input to the transformation process. For example, Walmart Labs in Silicon Valley bought startups to create a standalone innovation team. Another alternative, the Digital Advisory Board, has been set up by 50+ Fortune 500 companies to provide senior leadership with regular expert advice on new digital applications to support a company’s strategy.
Digital Transformation Accelerator (DTA)
Both approaches are relevant depending on the organizational structure, level of digital maturity and senior leadership commitment to change. Focusing on internal disruption, we see the Digital Transformation Accelerator (DTA) as the organization’s focal point for innovation and the manager of its culture, data and customer experience to sustain the transformation.
DTA is a low cost, low risk, agile venue to generate, evaluate and disseminate innovation and sustain change both internal and external to the organization. It is a semi-autonomous unit that reports directly to the CEO or senior leadership; it facilitates quick response, unbiased evaluations, and a holistic, integrated approach to problem solving, new business models and digital strategy. The DTA differs from the R&D Unit that focuses on product development; it is the change agent for organizational transformation, the catalyst for constant innovation and the accelerator or digital transformation
Creating a DTA
Here are four topics frequently discussed when creating a DTA.
- How to create a group responsible for Digital Transformation?
The DTA has a consistent membership core (10-15 members) and is inter-generational by design. It includes both well-experienced executives from different functional groups within the organization as well as millennials/junior staff. This team will include expert leaders from outside the organization providing a fresh perspective on digital technologies and new business models that challenge the interdisciplinary team’s old patterns and provide the responsive feedback necessitated by the leadership team. The DTA is exemplary of ongoing change and breakthrough innovation. Its culture and work environment is influenced by a ‘start-up atmosphere;’ its teams are flexible and open, serving as a resource to new ideas for business models.
2. How to create a culture that embraces change and facilitates ongoing innovation?
The DTA is driven by the company’s values and newly adopted digital mindset. Members listen “acutely” to the customers’ needs and employees’ and partners’ voices as a foundation of the new company culture. It can serve as a quick sounding board for a new idea or business model, testing the viability of a new digital distribution channel, or exploring new organizational structure. The innovative idea must generate value for the organization within a targeted time frame.
3. What are the DTA’s responsibilities and actions?
DTA’s responsibility is to apply foresight, data analysis, and creativity to anticipate and get ahead of the change. Its actions can range from initiating organization-wide transformation to a proof-of-concept of an innovation.
- Define path to digital integration
DTA enables organizations to achieve digital excellence. It facilitates the integration of “siloed” functions, strategies and analysis to enhance innovation and sustainable outcomes. It supports organizational change by adopting a digital mindset and new organizational culture. Innovation can be initiated from the organization (culture), marketing or technology. It can be focused on product or brand or customer experience, employee feedback or user interface.
- Train staff on digital
DTA serves as the vortex for digital skills staff training. As trained employees return to their functional group (e.g., Finance, HR, IT), they become advocates for change within their cross-functional groups and help to build and support the new organizational culture.
- Discover new business models
DTA looks to integrate digitalization throughout the company to generate new business models that are responsive to needs and expectations of the digital marketplace.
- Customer Experience (CX)
DTA redesigns and optimizes the CX connecting many new touchpoints between the Business Unit and customers.
- Open channels for innovation and transformation
DTA, with members from all functional groups and generations, is open to ideas, feedback and communications from all stakeholders.
- Test an innovation by a business champion
DTA synergizes existing capabilities and expert resources to design an innovation, and then reduces risk by using benchmarked best practices to decrease uncertainties and test its viability.
4. What is the methodology?
DTA is responsible for maintaining a business’ competitive position in today’s digitally disrupted marketplace. But what is the methodology by which transformation is approached?
Traditionally, the “waterfall methodology” follows a step-by step process through the project’s lifecycle. This a low risk approach as each step follows the previous one, “cascading down like a waterfall.” There are senior management signoffs at each step, easier for budgeting and measuring results. On the other hand the“agile methodology” is a high risk, more flexible approach, where innovation begins quickly; it is collaborative, can respond quickly to feedback, and changes are made at any stage.
The DTA will take a hybrid approach—being agile and quick in innovating across all business functions, while closely monitoring the results in order to prove the concept based on the company’s KPIs (Key Performance Indicators).
Here are three active examples of multinational corporations using their customized DTA to accelerate innovation and digital transformation.
Beth Comstock, Senior Vice President of GE, discusses the need for a Digital Innovation Unit:
“You have to create ‘proof points’ to create some of these experiments that prove out the hypothesis, so you can show your colleagues, ‘Hey, this worked.’ You can engage them in the planning and doing it as a team – you need IT, you need sales, you need technology. So you become a convening force through these proofs, these pilots. You get your customers and other partners engaged; people see it working. Then they say, how we can do more of it.”
“I am a big believer of putting in a fast, nimble team and being very visible about it. We’ve done that with our digital media and marketing team, just saying, ‘Go for it, go figure out new models, how do you tell the story using digital?’ Their job was to be first and innovative and try things out and then somebody in the business would grab it, translate it, and make it scalable for them. For me that is what good marketing leadership is, seeing something, translating the opportunity into your company and creating the kind of proof and momentum behind it so other people find it valuable for them.” (From Afterword in Digital Marketing: Integrating Strategy and Tactics with Values)
Thorsten Kühnel E.ON’s “Digital Transformation Unit in Berlin. “We have developed a comprehensive digital strategy for the international energy group since 2012. We launched together the global social media channels of the company Facebook , Twitter in German and English , G+ , Tumblr and YouTube – and developed an online strategy for the Company’s sales area. We worked together on a platform for networked, cross-regional cooperation between various management circles.”
“The tasks of the new Digital Transformation Unit: dialogue with E.ON stakeholders at all digital channels. Moreover, the new Group unit will control the digitization of client business from E.ON on all markets. The third task field cooperation with the Technology & Innovation will support the global search for new business models.”
Nestlé’s Peter Blackshaw created the Digital Acceleration Team (DAT) in response to environmental activists’ claim that Nestlé, maker of Kit Kat, used palm oil from companies that were trashing Indonesian rainforests and threatening the livelihoods of locals. He realized that consumers can “make or break—a brand.”
In designing the DAT, he realized that “You need a good cultural foundation to move to the right place.” DAT is a combination digital leadership training program and skunkworks for digital marketing projects. First, he selected groups of 12 employees to work on short-term projects and trained them on all things digital—from social media management to SEO. DAT became Nestle’s digital test lab, experimenting with emerging technologies, and “was responsible for keeping Nestle’ ahead of the curve in digital innovation.” The 12 members of each class returned to their units, bringing with them “digital vitamins”—an expertise that can be used to assist in digital transformation.
Major multinational corporations have accepted the challenge of digital transformation and realized the necessity of a Digital Transformation Accelerator to train staff in digital and manage the innovation and transformation process. The foundation for the DTA is a collaborative, cross-functional culture. Their experiences have generated best practices for organizations looking to customize their own DTA.
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