This article was originally written for and published by Fast Company.
As customer preferences and trends evolve—and they are evolving faster than ever—businesses must also expand to meet changing needs. But change is difficult, which is why so many companies struggle to remain competitive.
This struggle can be seen every day across multiple industries. CEOs and executive teams talk about adapting to current market conditions, yet many fail to do exactly what they know is needed.
Some leaders face organizational inertia because responsiveness is not part of their company’s DNA. Others are reluctant to push for change because of previous failed transformation projects. But the majority of people simply don’t know how to make change happen and are concerned about failure.
Companies that have succeeded at business transformation share a surprisingly similar blueprint that matches the right team and the right project size with a solid framework.
Here are some tips for managing digital transformation to deliver revenue growth and cost savings.
IDENTIFY THE RIGHT TEAM
Before kicking off the project, identify the people who will fill three key roles:
1. Executive Sponsor
The executive sponsor is the primary liaison between senior leadership and the project team. This role ensures alignment throughout the company so the project team understands expectations and goals, and executives understand progress and timelines.
2. Champion
The champion owns the overall project and is the key point of contact. This person is responsible for gathering requirements, identifying internal and external partners, project planning and strategy, and execution.
3. Key Business Stakeholders
Consisting of at least one representative from each team impacted by the project, this group provides valuable insight into their needs and how the project will affect their teams. It’s important to identify a cross section of business stakeholders, otherwise you risk missing a negative impact to a team.
When assembling your team, be sure to carefully consider all the variables to maximize their effectiveness. Here are a few best practices based on my experience:
The champion and the executive sponsor must have a strong relationship
The champion and the executive sponsor must have the ability to work together closely. This is key to alignment throughout the company and a successful project delivered on time.
The key business stakeholders cannot be wallflowers
Find people who will speak up and advocate for their teams. Although this may cause some headaches for the champion in the short-term, it will lead to the best long-term outcome.
Bring in outsiders who can provide new ideas
…and then listen to them. People who have worked together for a long time tend to think the same way, which can lead to missed opportunities for improvement.
Find people who put the team above themselves
Tradeoffs will have to be made, and you want a collaborative group that will consider the biggest benefits to the company, rather than just their own teams.
RIGHT-SIZE THE PROJECT
The Big Bang
Some companies go for one big overhaul. They have identified the need for a big change, their leadership team has bought in, and they have secured budget, resources, and people to deliver it.
These cases typically happen when existing workflow processes have become so outdated and inflexible that the company is losing business. These “big bang” projects can be difficult due to their ambitious scale, but companies take the plunge because the ROI is huge when executed correctly.
The Toe-Dip
Other companies start small, dipping their toe in the water to make sure it’s doable. Rather than making business transformation all-encompassing, they take on a small project to gauge their effectiveness at delivering change in smaller increments.
A simpler project requires fewer resources, and the budget is usually easier to secure. Once successful, it is easier for the team to get buy-in for a much larger project that will have a bigger impact on the bottom line.
Both models work as long as the champion and the executive sponsor set the right expectations on project deliverables. A large project should have an outsized impact given the resources committed to delivering it. A smaller project should move quickly, with less impact on resources and be able to deliver enough benefit to justify more investment in transformation.
In other words, a larger project will move the world, a smaller one will move your team—make sure everybody involved knows which one to expect before the project kicks off.
FOLLOW THE DIGITAL TRANSFORMATION FRAMEWORK
Technology is evolving at a remarkable pace, and that opens up new opportunities to change the way companies do business. That’s why business transformation is increasingly tied to digital transformation.
Companies that get this wrong tend to know they need to update their technology, but don’t fully understand what impact it will have on the business.
Companies that get this right follow a strikingly similar path that consists of answering the following questions, depending on how they structure their own framework:
- What is the desired outcome for the customer, patient, or buyer?
- What products and services will deliver that desired outcome?
- What teams and people are needed to deliver those products and services?
- What processes are needed to support those teams?
- What technology is needed to make those processes a reality?
Companies that follow this framework understand that technology is the enabler, not the end game. This concept holds for all business transformations.
Ultimately, companies want to offer their customers a better experience, grow revenue, and increase profit margins. If you start with those goals in mind, the path to business transformation success will be much easier to find.
Ray Hein is a member of the Fast Company Executive Board, a private, fee-based network of influential leaders, experts, executives, and entrepreneurs to share their insights. Check out all of Ray's content for Fast Company here.
