Three tactics for successful digital transformation

Large-scale digital transformations require clear roles, careful planning, engaged employees — and sometimes drastic action.

Digital transformations are not for the faint of heart. They demand courage, vision and a strong understanding of the risks and resources required. In fact, many companies don’t move forward with digital transformation projects until they encounter a “forcing function,” an external or internal crisis that demands action, says Geoffrey Moore, author of Zone to Win. The COVID-19 pandemic is a prime example of a forcing function, as many companies had to pivot overnight to meet the challenge of adapting to a remote working environment.

Here are three things companies need to keep in mind as they embark on a large-scale digital transformation. 

Stay in your zone

Companies need to have a clear definition of roles and responsibilities for their organization, Moore says. He explains how companies have a performance zone, the core business zone that focuses on delivering products and services to the customer. The productivity zone entails all the cost centers behind the performance zone, while the incubation zone tests new concepts and ideas. The transformation zone is reserved for disruptive emergencies, but when it’s in play, the transformation demands the organization’s full focus.

Be bold or go home

Sometimes digital transformation demands taking drastic action. Soon after joining Xcel Energy as CIO, Brett Carter ended collaboration with the third-party company that was two weeks away from starting a $2 billion project to replace the electrical meters in all homes served by the utility. Instead, he gave the next project bid to a technology company with the capability to install meters with Wi-Fi capability. “You only install meters every 20 or 30 years,” Carter says. “I wanted to set the company up for the future.” The move was controversial, but Xcel Energy utility customers are now benefiting from additional control over their energy usage.

Bring people along on the journey

With so much at stake, companies should focus on planning the digital transformation carefully. “Before we spent a dime, we had to make sure our environment was ready to support the new technology,” Carter says.  Even more important, they needed to make sure employees were fully engaged in the transformation. Carter says that many Xcel Energy employees at first were skeptical of the new meter technology, but that changed once they understood the benefits.