- Digital transformation is one of the buzziest topics right now after the coronavirus pandemic forced companies in every industry to quickly adopt new technology.
- But it’s difficult to sustain those efforts, and the vast majority still fail to expand beyond the pilot stage to the whole enterprise.
- To overcome that hurdle, companies should appoint “digital evangelists” whose sole responsibility it is to oversee the transformations, according to consulting firm Capgemini’s Adam Rubin.
- “It’s easy to just create an innovation lab because it’s the flavor of the month,” he told Business Insider. “It’s much harder, but much more rewarding, to treat innovation overall as a discipline.”
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Digital transformation became an even more buzzy concept in the last few months as the coronavirus pandemic upended nearly every industry, forcing companies to quickly adopt new and novel technology to adapt to life amid the ongoing crisis.
And while there are countless examples of the speed at which corporations were able to deploy new software and applications, sustaining that momentum and building upon it is exceedingly more difficult.
Just 13% of organizations that have deployed artificial intelligence in their operations, for example, have successfully scaled it across the enterprise, according to research from French consulting titan Capgemini.
That indicates projects are remaining in the pilot stages, segmented to specific regions or business units, like logistics or the legal department. They then often fail to sustain progress once they are expanded to a wider set of the workforce.
“It’s easy to just create an innovation lab because it’s the flavor of the month,” Adam Rubin, the head of innovation enablement at Capgemini Invent, told Business Insider. “It’s much harder, but much more rewarding, to treat innovation overall as a discipline.”
Companies have tried various approaches to addressing these challenges, including propping up central innovation studios charged with overseeing the transformations, as well as choosing “digital leaders” within different teams that can help champion cultural and technological overhauls on a more grassroots level.
But even more is needed. Capgemini dug into how to successfully scale digital transformation projects for a recent study. The firm conducted in-depth interviews with 40 executives at global corporations that together total over $1.7 trillion in annual revenue and narrowed it down to three key areas: establishing scaling as its own discipline, creating an innovation governance structure, and cultivating a resilient culture.
We talked to Rubin to learn more about how companies can immediately tackle each.
Scaling as a discipline all its own
A common approach to promoting digital transformations is pinpointing the “digital evangelists” within different teams that can promote the efforts and help to bring other advocates on-board.
But the role needs to be much more formalized and come with its own set of performance metrics — in other words, a position all its own, not something tacked on to someone’s day-to-day job, according to Rubin.
“Discipline means that there is some kind of operating model dedicated to scale,” he said. “That means they’re going to have the right mandate, they have the right support, and other people in groups inside the company know that’s their responsibility.”
Creating an innovation governance model
And overseeing those individuals should be a steering committee of sorts that is tasked with ensuring that projects achieve a purpose beyond just deploying the latest technology, Rubin suggests.
That helps to establish a return on investment for those initiatives — which in turn helps future efforts get funding. It’s one reason why chief financial officers and chief strategy officers are good candidates to include in the governance committee, per Rubin.
“If the governance team can ensure that ideas align to the overall arching strategy of the company, there will be a different feeling,” he said. And “treating a certain budget as sacred, letting it run its course, committing to innovation as a complete process, is a really important part.”
In economically turbulent times like right now, it’s easy for companies to pull funding for the innovation-driven projects as a cost-saving move. But in many cases, those projects are are the most valuable and should be preserved, in Rubin’s view, as a way to help future-proof the company from further shocks.
“It’s ironic in a way. When you’re having a tough quarter, maybe the very thing you need the most is innovation,” he said.
There are many examples of companies doubling-down on IT makeovers despite the turmoil caused by the coronavirus pandemic. Phillips 66, for example, is continuing its transition to a new enterprise resource planning system despite the energy sector suffering greatly during the ongoing crisis.
Cultivating a resilient culture
At the end of the day, most organizations have access to the same technology. That’s why chief information officer and other tech leader’s often say the biggest differentiator is the culture, and it’s a key part of successful transformations.
But it takes more than just the CEO proclaiming the values of a company. It has to be ingrained in the day-to-day operations, said Rubin. Many times, that means encouraging employees to take risks to try new technology or uncover new processes that can cut down on operational costs or time to market.
“Otherwise, what happens is people lose faith in leadership, people won’t want to spend time to find problems and to develop new ideas, They will literally be incentivized for just doing their day-to-day,” said Rubin.
PepsiCo, for example, launched a new beverage that was conceived through an internal innovation contest, providing a very visible example to employees of the potential that can arise by pursuing and advocating for new products or concepts.