Digital Transformation Failures, and How we can learn from them
What the meteorite was to dinosaurs, a poorly executed digital transformation is to a CEO. Nothing does more to shorten a CEOs lifespan than a digital transformation gone wrong. It becomes an all encompassing, money hungry virtual monster, sucking resources and careers down with it. So how can leaders avoid these pitfalls and chart a course past the car crash that was Ford Smart Mobility? By taking the transformation part of digital transformation seriously.
A digital cause will not always result in a transformative effect
For too long the digital side of the equation always took precedence, in the misguided belief that installing new software alone had the transformative effect on the organisation. In 2016 Ford launched its Ford Smart Mobility LLC subsidiary with the goal to transform Ford into “an auto and a mobility company”. They decided the best place for its shiny new digital segment was on a campus entirely separate from its HQ. Well they did build it and no one came, as a separate business unit proclaiming to be digital has a much more transformative effect on the stock price (needless to say downwards) than it does on creating a fully fledged, holistic digital business.
Since then, the unit has lost big on bets with Chariot (a $65m investment into ride-sharing shuttle buses that has been closed) and more recently on Pivotal (a $182m investment into a cloud software company whose stock fell 35% in the first half of 2019), whilst hemorrhaging money consistently.
This shows a key pitfall of digital transformation. If the organisation is not fully bought into the exec’s vision of a new digital future, then it is destined to fail. That coupled with the disconnection both internally and geographically between the legacy auto company and its digital sibling only accentuated the fissures.
Oh, and yes the Ford CEO and overseer of Ford Smart Mobility has stepped down.
Applying Human Centred Design to avoid digital transformation failure
Ask yourself who is the digital transformation for? The answers tend to focus on enabling employees to do their jobs more efficiently and empowering them to think creatively and innovatively, allowing the business to achieve sustainable and scalable growth. This means that any digital transformation has to first and foremost think back to the needs of its customer, i.e. the employees who will be using the new digital systems.
Design Thinking should be used to understand what their needs are and map relevant digital tools to meet those and eliminate those painpoints. Like with any customer, they also need to know why they should buy in to using this new service.
A top-down, directional and opaque narrative puts employees on the backfoot and immediately creates a pervasive sense of negativity and outright hostility. Communicate with clarity and transparency, being empathetic to your employees’ concerns, ensuring they are brought on the journey with you. This allows them to take ownership of the transformation, rather than feeling that this is something happening to them.
Here at The Strategy Group, we work with organisations to develop and embed digital transformation by placing the customer experience, employee experience and organisational culture at the forefront of innovation. If you’re looking to deploy a digital strategy or pivot your business model into the digital space, please don’t hesitate to reach out to us and find out how you can maximise growth opportunities whilst staying relevant for the foreseeable future and beyond.
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The Strategy Group’s expertise sits at the nexus between Design Thinking, Lean Start Up and Strategy. We are obsessed with innovation, and support our clients to master leading edge approaches to deliver successful corporate innovation projects.
To do this we bring together the best of Design Thinking, Lean Start Up, Traditional Corporate Strategy and Customer Centric approaches to service delivery. If you have a compelling problem to solve, an idea or hypothesis to test with customers, or half or fully formed business model to commercialise, we will delight in partnering with you to achieve tangible impact.
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