‘The real benefit is to prove to your people that agility, creativity and data can succeed over legacy businesses’

Digital transformation – I think and hope we are beyond the “why” stage and moving into the “what” stage

What does a digitally transformed company look like? That’s a question with a thousand answers. As an entrepreneur and investor, I get a multi-dimensional view of the landscape. Here’s how it looks…

Firstly, you have to ask yourself are we in business as a renovator or an innovator? A renovator in the sense of a continual quest to make things better or an innovator who is doing something completely new and radical. Both can have digital root structures, but the cultures are entirely different.

For an established business, transformation should not mean any shocks, good or bad. It’s business as usual (BAU), but moving to digital business as usual (DBAU). Culturally this is normally a renovation approach and the most critical element from a transformation perspective is to get the enthusiastic buy-in from senior middle managers who are often resistant to change.

This can be done from a top-down or bottom-up approach. One tactic I saw work well was having a 30,000-strong workforce formally asked to help identify and document website bugs. The whole exercise was gamified and was viewed by the company board as being a great success in internal digital engagement.

For the innovator, a key lever to success is the “prototype” culture, the startup mentality of “we’ve got a great idea, let’s go and build it and get it to MVP (minimum viable product) to test” attitude, normally at odds with the renovator mentality which takes a serial approach to ideation and can get stuck in the mire of endless PowerPoints.

I was tasked some years ago to build a totally new insurance website with some radical functionality. My initial take was that after getting through the political minefield of stakeholders and the IT development waterfall, it was going to take 14 months to get to market. So I took a £5,000 internal budget, found an external web developer and built a working MVP in six weeks, to the business’s total astonishment. And the lesson I learnt? It’s a lot harder for a political stakeholder to kill a prototype than it is an idea – that’s a key lesson in digital transformation.

I want to deal with the big data issue that digitally transformed businesses know what big data is. I frequently speak at conferences and when I ask “who knows what big data is?” I get the universal show of hands. When I ask “and what can it be used for” there is normally a sea of blank faces. For a transforming board to look at this, it is looking not at big data, but “layered data”. Overlaying many sets of data to identify new customers’ segments is a given for startups. They know how to take Facebook data, layer it on to geographical and weather data, to work out there’s a new revenue opportunity selling rain capes to 24-year-old Glastonbury audiences. There’s money in Venn diagrams.

The common question I get from boards is “should we be investing in startups to help the culture of our own transformation?” Certainly, having crazy startup chief executives pop up and be disruptive inside your own business has benefits aside from regular injections of passion, enthusiasm and brain power. But the real benefit is to prove to your own people that agility, creativity and data can succeed over legacy businesses, preferably your competition, and provide confidence that DBAU is a realistic goal.

Finally, it is often obvious to see from the outside whether a business has been digitally transformed. If you want to see that in action, search for “kern, the gnome experiment” and see a business that has learnt to go from something possibly in the boring quadrant to something which delights the world by being digitally centred.