There are many reasons to start a digital transformation. And it can be a truly rewarding experience for your organization – not just in a financial sense either. Whether you’re looking to increase the revenue of a specific division within your organization, whether you’re a CEO who feels your business has hit a plateau, or just a professional who knows there must be a better way to run your operations, there’s something to be gained by undergoing this transformation.
The great thing about this process is that you can make it be whatever you want it to be. You can:
The process is as varied as the businesses and people in them, and there are numerous benefits. Increased customer and employee loyalty, increased community engagement allowing for easier transitions into new markets, just to name a few.
However, the process isn’t a walk in the park. If this transition isn’t properly managed, you can waste a lot of time and lose a lot of money. And possibly, you can lose credibility in the process if this transition isn’t properly managed. So in this article, I’m going to explain the key to a profitable digital transformation, expose you to a business model that can lead to a better experience for your customers.
The key to a profitable digital transformation is having dedicated leadership. An in-depth 2018 report from McKinsey & Company noted that: “key to success is leadership commitment. When people in key roles (both the senior leaders of the organization and those in transformation-specific roles) are more involved in a digital transformation than they were in past change efforts, a transformation’s success is more likely.” 1
Having a leader in your organization solely dedicated to this project will give them the freedom and flexibility to build a clear vision of what the organization should look like. They’ll need to be given the time to build a plan that outlines what the outcome will be, what parts of the process will be delegated, what technologies will be used, and how communication will be handled.
If you’re a leader and you’ve found yourself at the helm of your organization’s transformation, the road ahead seems intimidating. A good first step is to start by thinking about the result you want for the organization. Once you have that clear vision, how closely does it align (or not) from your organization’s current mission and operational style? Then, work backward from your result to now.
This will allow you to be certain if what you want is achievable. After that, you can start building strategies and tactics to get the goal for your transformation accomplished.
In order to ensure your transformation is profitable, these two will have to work together. As the leader, you’ll do the thinking in this process, and delegate the doing to others. At the same time, you’ll need to plan ahead and anticipate potential problems. It’s very rare for things to go completely according to plan; especially when it involves motivating people to change. However, if you’re practicing Everyday Leadership, you’ll be setting yourself up for success.
The trick is to anticipate those problems and have an alternative strategy or tactic just in case.
Think: If this, then what?
Once you’ve figured out how you’ll handle possible problems, you can start exploring some possible business models. Consider those that can lead to better engagement with your employees and a better experience for your customers. Here is one in particular that can help you achieve both in a shorter amount of time.
In order for a digital transformation to be successful, it needs to be an all-in-one approach. Meaning that every member of the organization (or department) will need to not only buy into the transformation but also commit to following through.
There’s one business model that when implemented can deliver a better transformation experience for the team. And also, it leads to a better experience for your customers. That model is to productize your service.
Whether you’re a small agency or a larger enterprise, productizing your service can allow for more predictable, scalable growth. When you use this model, you deliver an all-in-one experience for your customers in a way that sets clear expectations as to what is being offered and delivered. Also, it allows your organization to escape the project-to-project hustle of hourly billing.
For example, if you’re a web development agency, instead of billing by the hour on projects, you can productize your service by offering a monthly subscription that includes a defined amount of hours per month for development, plus ongoing hosting, maintenance, and updates.
Along with the regular, recurring revenue that comes with switching to this model, productizing your service also allows your organization to quickly build an invaluable asset; a growing portfolio of subscribed and engaged customers. When leveraged properly, this asset could really accelerate your growth when your digital transformation is complete.
Because these will be satisfied customers who know you and trust you. With your productized service, they’ve been regularly engaging with your organization. This means they’ll be more inclined to purchase other products and services that you have to offer.
This is why many technology companies use the Software-as-a-service model and offer free trials to customers. To build a portfolio of satisfied customers, who might be more inclined to upgrade to additional services.
When you switch to this model, it’ll be up to your dedicated leader to define the boundaries in terms of the features or services the company will provide. More specifically, which ones make the most sense in terms of ROI. This then allows a clear set of expectations with your customers on the things included with the productized service.
A project management report by the Harvard Business Review stated “Sometimes, well-meaning team members assume that customer happiness is the most important goal, so they covertly complete extra work for nothing. Project profitability takes a hit, and the costs get buried in a big pile of financial reports.” 2
By taking this approach to how you service customers, your team can focus on working within the boundaries of those expectations and deliver exceptional service to your customers. The same with departmental transformations. When you clearly define the responsibilities of particular roles and put processes in place that prevent team members from being pulled away from their main responsibilities, you’ll end up with a much more engaged workforce and much happier customers.
Keeping the team on-track, supporting existing customers, and keeping the sales pipeline full during this transition is a delicate balancing act. Unfortunately what many organizations do during this process is assign more responsibilities to team members in an attempt to make sure that there are no operational gaps.
Employees start to feel overwhelmed when this happens because they’re taking on too much. This eventually leads to poor customer service, employee turnover, and the increased cost that comes with it.
The key to avoiding this and having a profitable digital transformation that provides a better experience for your customers is to have a dedicated leader at the helm of your change. You’ll want to start making sure there’s a clear vision of what the outcome should be. Then, give them the freedom and flexibility to build strategies, tactics and keep things on track.
If you’d like to see more about how we empower leaders and support them with the strategies, support platforms, and self-confidence to take your organization to the next level, join us for our free online workshop Everyday Leadership.