4 Tips on How to Become a Digital Organization

Small 4a49f04f9daea4158b382e55c95916c14b1a0051000f0ee003df7861ce887d77
By Sébastien Morin
Partner - Co-President & Chief Strategy Officer

A few weeks ago an article was published in which I mentioned that it’s time for organizations to put their words aside, roll up their sleeves and seize the opportunities created by this period of great change that we now live in. How to go about it? Where to start? And above all, what changes should be implemented in order to have a long-term impact on our organizations?

The digital world is taking and will always occupy more space in our lives. This was true before the current crisis and it’s even more today. If we want to revive our economy with force, most companies will probably have to attach more and more importance to their digital strategy. They also will need to learn, if they did not already do so, to digitize their services, their products and their business models. They will have to become digital organizations.

Becoming a digital organization is not just a technological challenge. You don't become a digital organization by buying the right software or deploying the right platform. Becoming a digital organization is first and foremost a question of organizational culture and people. I certainly don't pretend to have all the answers and a plan that applies to everyone. On the other hand, here are some lines of thought and some observations that I have made over the years in helping our clients to tackle this challenge.

The most important thing for companies wishing to make the shift, especially during this period of crisis, is to finally take software seriously and simply get started. You don't become a digital organization by making a big leap: you become one by constantly taking small steps.

1 - Create Digital Products

“The best way to predict the future is to create it.” - Alan Kay

In my humble opinion, many organizations spend too much time thinking about their digital strategy rather than building it. Don’t get me wrong, I am not saying that the thinking process should be overlooked. However, I believe that many lessons can only be learned through actions. Only once we’ve learned to walk can we start to run.

In an ideal world, I believe that each organization should eventually aspire to have its own development team in order to increase the pace with which it can test new ideas. That being said, if companies don't create their own digital products internally, I think they should at least have a deep understanding of the development process and rely on a few digital products made in the past that they can experiment with and learn.

Several companies claim that developing digital products is not their core business. It’s totally true. However, I don't believe that Amazon, Netflix, Uber or Airbnb are software companies. They are retail, video rental, taxi and hospitality businesses that have put digital and software development at the heart of everything they do. If digital product development is not your core business, it still should be at the heart of it.

Still too many organizations are plagued by the planning of projects that never end and by massive investments in existing solutions that promise the world. It's very difficult to completely rethink the experience you offer to your customers and to stand out from your competitors if you use the same tools as them. Reinventing yourself inevitably involves an act of creation. Imagine the future of your business and build it. Don't wait for someone to do it for you and sell it to you for a fortune.

The story of La Presse in Montreal is one that inspires me. Before giving up on paper, they launched several products, learned a ton and built up a solid expertise internally before launching La Presse +. Today, La Presse is one of the best digital product creation teams in the Quebec Province.

To become a digital organization, software development must absolutely be part of your DNA.

2 - Never Stop Innovating

Innovation feeds on innovation and its impact is always exponential. This idea can be difficult to grasp for someone who has never experienced it. A small idea, a small functionality or a small project which may seem eccentric and harmless today can lead to new ideas and new knowledge, which will also open up a world of possibilities to you. Then, very quickly, these small steps can take you a lot further than you could have imagined initially.

Contrary to what many believe, I am convinced that innovation is not born out of "the big idea" or the flash of genius. Innovation is the result of several well-executed little ideas. It’s, in my opinion, a question of execution and momentum. It’s first of all this capacity to execute and to keep up the pace that defines the organizations that manage to transform themselves.

“To me, ideas are worth nothing unless executed. They are just a multiplier. Execution is worth millions.” - Steve Jobs

It’s because of this velocity and rhythm that small startups have become giants of today. If Amazon has been able to enter the cloud infrastructure market, it’s because they have spent years building knowledge by creating their e-commerce site. If they were able to launch the personal assistant Alexa, it’s because they have been doing artificial intelligence for years which allowed them to improve their recommendation engines and increased their sales. Innovation always feeds on past innovations.

Netflix was originally a company that rented movies online by sending DVDs by mail. When technology allowed them to distribute films by streaming on the Internet, they were able to take this turn because they already had a digital structure in place for rental and payment. When they realized they had a deep understanding of what people liked to listen to, they got into content production. Each new transformation makes the next possible.

In the past month, Netflix's market capitalization has exceeded ExxonMobil’s one and reached $ 196 billion. Amazon’s share has also reached new historic heights.

To become a digital organization, you must be constantly on the move and never stop innovating.

3 - Don’t Underestimate the Power of Details

Technology alone rarely transforms industries. It’s usually products and services that use technology that are responsible for these transformations. It is web platforms, mobile applications, softwares, interactive kiosks and TV applications that use technology and democratize it by putting it in the hands of billions of people.

Behind every successful digital product is usually a deep understanding of people and their needs. The digital transformation is not just a question of technology: it’s first and foremost a question of experience. A product that doesn't provide value to its users or that is not helpful is unlikely to be used.

For businesses, the challenge remains the same: how can we offer an exceptional experience to our customers? How can we help? How can we remove any friction in this experience? How can we add magic to it? Every detail in the customer journey is important. It’s often a thing that many organizations overlook. They often miss the point by ignoring all the opportunities they have to improve every single touchpoint they have with their customers.

Digital transformations are usually easier to explain from a micro point of view than a macro one.

Take Uber as an example. The details of their experience may seem trivial if we look at them one by one. "Are we really going to put in as much effort to pay directly into the app so that people don't take their wallets out of the car? Are we really going to invest that much money just to show the location of the taxi on a map and tell users when to get out of their house?” The reflex is too often to take for granted that the result doesn’t justify the investment. And that’s not entirely wrong.

On the other hand, I believe that as it is with technology, the impact of each improvement to the customer experience is exponential. It’s when we multiply the impact of several improvements that we get an infinitely better experience in comparison to the competitor. It’s when we multiply the effect of each improvement of a touchpoint that we build experiences strong enough to reinvent industries.

This is where great transformations are born: when organizations are constantly thinking about how software can improve people's lives at every touch point, no matter how small.

People do not purposefully act in bad faith. No one wants to fundamentally harm the local economy by shopping online. No one gets up in the morning hoping to harm a poor taxi driver whose license may lose all its value. People simply choose the path that offers them the least amount of friction. They choose the best experience. For a similar cost, they will continue to do it, no matter what we invest in efforts to convince them not to do so. People will always choose the best experience, no matter what level of protectionism we are prepared to assume as a society. If we wish to save the local economy, we must build better experiences. It's as simple as it gets.

To become a digital organization, you must therefore always put the customer and the smallest detail of his experience at the heart of your concerns.

4 - Don't Be Cynical

Finally, don't be cynical when you think about technology and the impact it could have on your organization. New technologies often seem useless at first glance, as it’s particularly difficult to predict the impact they will have and how people will use them. Rumor has it that Thomas Edison, the inventor of the phonograph, was not particularly fond of music and believed that his invention would be used to document the content of letters. History is filled with similar anecdotes from creators who may not have understood the potential of their invention. The most disruptive innovations first seem like a toy for big businesses. This is one of the main observations of Clayton Christensen’s famous Disruption Theory.

Blockchain is perhaps a good example of this phenomenon. It’s still difficult today to predict how much this technology will impact the world we live in. It’s the applications that will soon be developed on the blockchain that will decide the fate of this technology and potentially upset, or not, several sectors of our economy.

Always be on the lookout for new opportunities. Be excited by the novelty. Don't be one of those people who say “yet another useless technology”. Be curious and see how these technologies could improve your organization and the experiences it offers people.

Above all, realize that the transformations imposed by technology are not ready to slow down, pandemic or not, and that the only way to ensure your long-term sustainability is to become a fundamentally digital organization.