How organizations are digitally transforming themselves

Bang in the middle of New York's hip and happening garment district, where creativity flows through fashion studios, hospitality major Starwood Hotels and Resorts has set up its new collaborative workspace. Hanging from the ceiling of this 46,000 sq. feet bi-level 'Starlab' are digital chandeliers on which live feed from Twitter streams continuously. Employees just can't miss the tweets above their heads - the social listening post has gone broadcast.

Starlab is the hub of the company's digital transformation. Here, its IT, design, digital, brand, legal and HR teams work together using technological tools to transform the company and customer experience. "A cross-matrix team is at the heart of Starwood's digital transformation," says Chris Norton, Vice President, Customer Relationship Management and Channel Intelligence, Starwood. At Starlab, innovations such as keyless entry into hotel rooms using mobile phones and use of beacons to welcome guests into hotels are taking shape.

As the tech wave sweeps through the world, every organisation is struggling to cope with stuff like the Internet of Things, wearables and an algorithm-driven environment. Digital transformation is the new big consulting opportunity for firms like Accenture, IBM and Capgemini. What should be the new organisational structure in a digital era, what are the right tools to embrace, what should be the digital vision - these are some questions that companies are asking and hiring consultants for.

That's because of the new complexity creeping into the digital space. As Rahul Welde, VP, Media for Unilever Asia, Africa, Middle East, Turkey and Russia, says: "Digital has become a complicated ecosystem." Whether it is social, mobile or Big Data, you would struggle to map such giants in a chart.

John Mellor, VP, Strategy and Business Development at Adobe, says there is no one playbook. The digital flood swept companies off their feet before they could put in place formal systems. For instance, banks were forced to invest in mobile-compatible websites when they found more and more clients accessing banking services on phones. As Todd Copeland, General Manager, Digital, National Australia Bank, described during the Adobe Summit: "We found that 90 per cent of our interactions with our customers were on digital platforms and 65 per cent of these interactions were through mobile."

While some organisations started with social media engagement in digital, others changed their internal structures. For instance, some companies created new positions called Chief Digital Officer or Chief Experience Officer reporting to the CEO and a new team to wire up the organisation with new systems and ramp up digital capability among employees. In several companies the marketing department is where the initiative first began. Only later did it seep in that the whole organisation needed to be rewired.

Today, whatever their level of digital maturity, most companies find themselves at crossroads and are now drawing up the roadmap properly. So, how would companies do it if they had to start all over again?

THE ENTRY POINT

If there was one ideal entry point to get into digital transformation, it would be through analytics, feels Mellor. "Analytics is like turning the lights on in a dark room. It helps you see the path ahead."

While that does sound logical, a new book Leading Digital: Turning Technology into Business Transformation by George Westerman, Didier Bonnet and Andrew McAfee, says: "There is no single right way to start digital transformation. What matters is that you find the existing capability - your sweet spot - that will get your company off the starting blocks."

The entry points and the routes that companies are following may be different, but there are some must dos. A consensus is that digital has to seep into the DNA of every single employee and percolate from leadership down. This is why GSK's President Emma Warmsley says she took her leadership on a digital safari, and is investing in training employees in digital capability.

Once the people have been invested with capability, the next step is to create and share a digital transformation vision. It's important not to get distracted by the next shiny technology on the horizon. "Technology for its own sake is a common trap," warn Westerman, Bonnet and McAfee. Instead, the focus should be on business outcomes or the customer.

Rob Roy, Head of E-commerce and Digital at Time Warner Cable, describes how changing the culture of the organisation is a major challenge during the journey. But if you keep the customer at the focus of the change, it gets easy. "We are really focusing on how customers can touch us any point in time. We built our roadmaps together focusing solely on the customer," he says.

The other pitfall in digital transformation is creating too long a roadmap. The digital world moves quickly so planning for "sprints" rather than "marathons" should be the approach - quite the reverse of conventional planning.

In fact, the biggest rule that companies on this transformative journey have found is to throw out the rule book.

(Part of the reporting was done at the Adobe Summit in Salt Lake City, US. Adobe sponsored the trip.)