Three principles for digital transformation that managers should follow. Humans are resilient creatures. In times of great uncertainty, we adapt – even in times of economic uncertainty. This is particularly true for managers in the technology environment.
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Economic headwinds require an examination of the ROI of digital transformation
Macroeconomic headwinds – inflationary pressures, tight markets, and supply chain issues – are cause for concern. What is needed now is thorough self-reflection.
By actively listening to their teams and asking the right questions, leaders can get on the right track – either to ensure digital transformation efforts are successful or to at least turn slow-moving transformation into successful digital outcomes.
These potential conversation starters will help you make a decision:
- How will digital transformation change the way our company creates value?
- Do we have the right foundations – team structure, budget, resources, reporting metrics, etc. – to execute a digital transformation successfully?
- What OKRs (Objectives and Key Results), which measure impact rather than activity, can we set to understand whether we are achieving the desired results from our digital transformation efforts?
- Do we have the processes and systems in place to measure effectiveness and delivery risks across often cross-departmental teams, tools, and data?
In order for digital transformation efforts to bear fruit, companies must first create the framework and the necessary foundation for success in the coming year.
Companies need to adopt the digital native mindset and incorporate the flow framework
Companies need to start thinking and acting more like digital natives – no matter what industry they are from.
Examples of how this way of thinking is implemented include automobile manufacturers who are switching their vehicles completely from fossil fuels to electric motors and are, therefore, increasingly relying on software instead of mechanics. To ensure that digital initiatives are not carried out in vain, all companies should use OKRs during their transformation. This framework helps different teams understand what and how their work contributes to achieving the company’s strategic goals.
In addition to planning and OKRs, it is crucial to understand the flow of software development. This means developing a set of metrics to track the flow of business value from software delivery. There also needs to be a mechanism that relates the investments in the flow of each product value stream to the business results of that value stream.
The visualization of the value flow or the implementation of the value flow developed by Dr. Mik Kersten developed Flow Frameworks in a software development process may not be as easy as on a factory floor, but it is not impossible. Thanks to the numerous data and visualization tools at our disposal, software products, and their value streams can be presented just as transparently as production lines.
Optimal digital transformation requires digital agility
No matter how much energy companies invest in their digital transformation, their success will largely depend on whether they are agile.
In 2023, the word “agility” will have more meaning than ever. In fact, more and more companies will understand that agility is the most important element for successful transformation.
To achieve their goals, they need to understand the concept of agility truly. Digital agility goes beyond the methods of agile software development. It’s about more than just an agile mindset and ceremonies with which agility is often only apparently lived. Companies that have not grown up with technology from the start must recognize the importance and dependence on technology and be open to the concept of agility and agile ways of working.
Merely executing agile practices is not the same as being truly agile: true digital agility is about moving projects to products, enduring teams, and data-driven feedback loops. These differences may seem subtle, but they are essential.