Digital Disruption is hardly a new phenomenon. For well over two decades, small and agile companies located halfway around the world are throwing businesses out of their businesses. The rise of Wikipedia has driven Encyclopedia Britannica into near obsolescence. Netflix singlehandedly shut down Blockbuster. Brick and mortar businesses are all but dead after Amazon happened. The future of yellow taxis is as bright as the night sky on a new moon, thanks to Uber. The message to all businesses, irrespective of the industries in which they operate, is abundantly clear – embrace cutting-edge technology and transform yourself or go extinct.

Businesses, to their credit, have been taking baby steps towards digital transformation. While some early adopters have been remarkably proactive in adopting technology solutions to achieve competitive advantage, most businesses have been lethargic at best. However, as everyone is moving towards the end of this decade, there is a perceptible enthusiasm among the businesses to utilize technology to make their businesses leaner, more effective, and profitable. However, what they lack is strong guidance. Estimates indicate that only 30 percent of the digital transformation stories ever succeed. Therefore, to ensure the success of enterprise digital transformations, it is important to take a look at some of the crucial lessons shared by digital transformation leaders.

Pick the Right Set of Problems

Technology is evolving at an exponential rate. If there is a business problem, then there is probably already a technology solution to solve that problem. What’s more, by next year, there will be a better solution to solve that very same problem. So, does that mean businesses go acquiring new technology solutions every time their present solutions become obsolete? Well, isn’t that the essence of digital transformation? Not really.

Digital transformation is the adoption of technology to create competitive advantage, differentiation, and a sustainable business model in the industry. Not to pounce on every new tech that enters the market.

Not all technology solutions achieve these goals. That is why it is important to select the right tech solutions that solve the right set of problems.

Businesses should be smart about the problems they choose to solve. They should recognize the areas where their customers are experiencing maximum friction. Customers should be able to enjoy the core proposition of a business in a more enhanced and pronounced way. The digital solutions that businesses create or choose for this process should set the standard or at least change the dynamics in the industry for the foreseeable future in the medium run. These solutions must create sustainable differentiation for the businesses in the medium term.

Focusing on every business problem is a colossal waste of resources. That doesn’t mean problems should go unaddressed. It just means that digital transformation is perhaps not the answer for them.

Create Addictive Experiences for Sustained Growth

Sustainable growth is achieved through a twin-pronged approach – high user acquisition and high user retention. Most businesses get obsessive about the former at the cost of the latter. Bad idea! High user retention not only fuels sustainable growth, but is also cheaper than new user acquisition; as much as seven times cheaper.

Technology can help businesses push their user retention rates higher. For users, the most important aspect of any product or service is its simplicity. The less work they have to do, the more they like it. If businesses continually improve their value proposition in a way that progressively reduces the work on the part of the customers, they are on the path to success. Most importantly, if they have managed to create a habit among their users, then they have hit the jackpot! Once the users have formed a habit with the product, they usually become too lazy to change, and learn everything about a new product. So, they stick with the old product, as long as they are not severely disappointed with the product they are using.

Amazon, Netflix, Uber, and other modern businesses invest tremendously in analytics to understand their users’ behavior on their apps. They use the insights generated from the analytics to improve their products and create higher user engagement. As the products become more and more personalized to the users’ tastes and behavior, they firmly earn a place in the hearts and minds of their users. They have got their users addicted to them. Analytics is usually the answer for most internet businesses.

Communicate Individual, Team, and Department Goals

People are the most critical element of any business. The success of any digital transformation effort is critically dependent on the enthusiasm and support exhibited by the people in the organization. However, change is not always easy to accept. There is bound to be some level of inertia from various corners in the organization. This can be addressed only with proactive, top-down approach by the higher management.

The top executives should communicate the digital transformation objectives to the entire organization as clearly as possible. At the same time, they should also create channels for the employees to express their queries and share the issues they face in the process, without any fear of backlash from the management. Most important of all, every employee should be explicitly made aware of their role in the digital transformation journey and how their contributions fit into the grand vision that the higher management has created for the organization as a whole. Such an awareness creates a sense of ownership and belonging among the employees and makes them an insider in the successful implementation of the digital transformation efforts.

The goals and objectives that are assigned to the employees should take into consideration their individual strengths, weaknesses, aspirations, and skills. If necessary, they can be imparted with the requisite training and skill-enhancement sessions to equip them with the right set of tools to enable them to face the challenge before them.

For the success of any major change initiative in the organization, small cross-functional teams of highly motivated individuals are an absolute necessity. The team members meet on a weekly basis and update each other on the status of the change initiative in their departments and the challenges that they are facing. A number of such issues can be resolved and such teams become a model of change champions in the organization. These high-functioning teams drive the organization level change initiatives from the grassroots level, improving the chances of success of a change initiative like digital transformation.

Technology and the Learning Curve

Once the problem areas have been identified, then it is quite easy to finalize the technology solutions to address them. It will hardly take a few weeks’ time to go through the various digital solutions available in the market to address a business problem. A core team will evaluate the various digital solutions. Perhaps, a few demo sessions, free trials, or in-depth experience sessions with the solutions providers may be required in case of complex digital solutions. Once the evaluation phase is complete, the next step is the Request for Proposals and then, the processing of the responses. Right from the identification of the need-gap to the finalization of the digital solution, everything is fairly standard. So, businesses do not face much hiccups in this process. The real challenge is the deployment of the digital infrastructure.

Businesses often face a double-edged sword when they are deploying new digital solutions. If they implement the digital solutions slowly, in a careful manner, then the change momentum that was built up in the organization fizzles out, leading to the possible failure of the digital transformation itself. On the other hand, if they implement them quickly, then the employees will be caught off-guard, as they do not know how to configure them, design them, or even use them. The result is a definitely failed change initiative.

The solution? A multi-step approach that makes the migration smoother, without causing too many ripples, especially for the customers.

Some digital solutions are fairly simple, and have almost a flat learning curve. They can be implemented from the get-go. A quick tutorial or a training session is all that will be needed to bring the users up to speed with the new digital solution. However, some digital enterprise solutions are complex and have a steep learning curve. These solutions warrant a more measured approach. The employees should be provided the necessary training, support material, and access to experts, so that they can get professional assistance whenever they need. Once the teams are fairly comfortable with the new technology, it can be implemented organization-wide. If time is a luxury, then employee training must be given the highest priority to speed up the implementation process, instead of implementing the solutions first and then hoping for the employees to figure it out.

This also means that a complex digital solution, which does not come with quality support (such as an open-source solution or bleeding-edge tech), is a risky adventure for any business. Whether a business wants to take such a risk is something that they should decide after considering all the possible consequences and contingencies.