Here at Silicon Valley Innovation Center, we work with hundreds of global companies to start or accelerate their digital transformation journey. While each company has a unique situation and challenges, we identified six major steps we employ in 95% of projects. By following this framework, our clients were able to create meaningful value from digital transformation and innovation initiatives.
1.Understand that you don’t need the digital transformation.
It might sound counter-intuitive, but this step is essential for bringing innovation to your organization. “Digital Transformation” and “Innovation” are nebulous words with too many meanings that are hard to translate into a positive value. They earned a bad reputation, thus they alienate many stakeholders and preventing meaningful communication.
Instead of using those terms, use “change.” The organization actually needs change in people, processes, and technologies. Once you deconstruct the innovation to exact areas and concrete steps, you will gain much higher internal traction. Leave buzz-words for buzz-word happy managers and peers.
2. Encourage communication
No one knows your business better than you and your employees. They understand most of the problems and growth areas in your business. But often, this knowledge is buried in hierarchy and politics. While meetings are great, they force a lot of people to stay quiet. Extraverts dominate introverts, subordinates don’t want to contradict managers, peers don’t want to undermine each other.
To combat that, create or hire an independent group that would actively interview both managers and line employees. Never mix your interviews — keep them one-to-one. In our experience, those conversations work best if:
a) People being interviewed know that their feedback is truly anonymous.
b) Interview starts with the complaints: “Tell me what, in your opinion, is the most painful work?”, “What is the biggest issue for our organization and your department?”
c) Finished by things that might make their work easier.
Once initial information is collected, keep your organization updated. Each company will have a unique style of communication, but everyone in the innovation agrees that communication is a key.
3.Inspire to learn more about the outside world
From interns to c-suite, your employees need to feel that they can change the company and see the positive examples of transformation happened elsewhere.
Ask team members to compile a list of the existing solutions that would make their life easier. It doesn’t need to be a holistic solution — just one functionality elsewhere would work great. It will help you identify what you could creatively transplant into your organization without reinventing the wheel.
Encourage your management to read/attend programs about what other companies are doing worldwide and in the innovation hot spots. In our experience introducing the executives to new ideas and the latest trends fuel tectonic shifts. We have been doing it for 10+ years and saw this happen again and again.
4.Align your organization.
Any digital transformation initiative should equate to three outcomes: generating additional revenue, optimizing existing expenses, or satisfying the regulator. This rigid framework allows hashing out through all the nebulous concepts to compare initiative against each other. It also forces people to think about their narrative and calculate the generated value more accurately.
- Does this new software allow processing more leads? (Sales Talk)
- Will it lead to more sales? (More revenue)
- Will it enable us to hire fewer salespeople? ( Less expenses)
- Can we achieve the same monetary result by doing something else, like increasing the marketing budget or increasing the sales commission? ( What are the alternatives?)
5.Review your processes
Like the previous point, do you know what modifications you need to make to accommodate digital transformation? Can your legal or sales team handle more qualified leads? You don’t need to hire new people or change existing processes just yet, but a thorough review will allow you to do pregame analysis better and prepare for changes to come.
Our favorite example is saving time by automation. Let’s say some solution saves your operations department 20% of their workload. Do you know what they will do with this freed time? Can other departments create 20% more business for the operation department? Is eliminating 1/5th of your workforce is the only option? Can you use the same funds elsewhere with a more significant ROI, leaving the operation department as is?
6. Create Paper MVP
Once you have identified where to apply your resources — start executing. But don’t go for a full-blown battle trying to attack everything at once. Start with Minimal Viable Product(MVP) and do it with minimal resources, even if it means doing it on a piece of paper.
One of our clients wanted to redefine how they manage their warehouses with sensors, the internet of things, and big data. But before signing any deals or investing in infrastructure, we had warehouse workers collect data manually and enter it in the Google sheets for two weeks. We used Excel built-in functionality to analyze the collected data to see if we can extract meaningful insights out of it. That allowed us to identify the most impactful area for the first steps and test our assumption before writing a big check.
While it is not that digital-friendly and takes workers away from their day-to-day activities, this is the most critical action to ensure the successful execution of digital transformation initiatives.
Innovation and Digital Transformation can be quite daunting, but they lead to survival and growth. If you’re wondering what are some lessons that could be learned from Silicon Valley, read this post. At the end of the day tech giants stay competing by constantly reinventing and disrupting themselves. Apple now has complete different revenue and product structure than 10 years ago, so does Microsoft. So the first lesson is, don’t be afraid your digital transformation journey.