Digital Transformations Need More Than Just A North Star

By July 18, 2022 blog No Comments

Increasingly, technology leaders are being invited to the executive table. After years of exclusion, this is great news, but how are you bringing new perspectives and value beyond an extensive understanding of your organization’s technology landscape? If not already, you will soon be asked to provide technical support and perhaps program management for a digital transformation. What perspectives and recommendations will you contribute to increasing the odds of digital transformation success? Our firm and others are seeing failure rates in excess of 75%. Following is a key first step to consider to ensure the success of your organization’s digital transformation.

By now, you’ve probably read many articles about digital transformation and learned that it’s a must in today’s economy. Articles on this topic frequently refer to the need for a north star to establish the vision for the program. Based on my experience, this alone isn’t enough. You also need a compelling critical event to align your team, ensure progress and increase the odds of success.

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A north star is commonly identified early in a digital transformation by reviewing an organization’s mission and/or vision statements. A north star needs to appeal to your entire team. For example, a digital transformation program north star could be “to provide the greatest value to our customers”—not very appealing. In order to help the transformation, the north star statement needs to be aspirational and emotive. A great first step in driving motivation for digital transformation is testing your statement with groups of employees before setting it.

On the other hand, a compelling critical event is less commonly identified at the start of digital transformations. I first heard the term “critical event” as part of a sales seminar many years ago. This term is used to identify what will happen in the future that is driving the need for a purchase (or digital transformation, in our context). For example, a strong critical event leading to a digital transformation could be that technical debt has made the profitability of your company’s product challenging, and unless quickly corrected, the company will be liquidated.

What Happens Without A Compelling Critical Event

There was a client for whom I led a digital transformation that had an inspiring north star and a good critical event. Although they had identified both, this client illustrated why just having a critical event wasn’t good enough—the event also needs to be compelling.

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The critical event this client identified was merely an arbitrary future go-live date that a single strong leader selected and the executive team accepted. Coupled with the north star, it created motivation for the digital transformation program team. However, as the program neared the go-live date (a critical event), organizational leadership was willing to push the go-live date as challenges arose. The organization did not feel the critical event was compelling.

Another client of mine also had a very solid north star for their program but lacked a compelling critical event. With only a north star and no compelling critical event, this organization continued for months in the due diligence process. Without a compelling critical event, they had no incentive to mobilize and continued to plan. While they continued to progress slowly, the lack of a compelling critical event caused the organization to lose momentum for their digital transformation, frustrate employees and needlessly use scarce resources.

How To Identify The Right Compelling Critical Event

• Be exact. Your organization has already decided that a digital transformation is necessary. Be sure the leadership team thoroughly evaluates why the transformation is necessary. Often, the business case is intended to demonstrate the “need” for the transformation, but is a return on investment (ROI) your organization’s compelling critical event? Can you use ROI to inspire the larger organization? If your leadership team agrees on why your organization needs to transform and that there is no turning back, you have found a compelling critical event. This can be used to create a compelling message and get the entire organization on board.

• Be resolved. Your organization’s leadership team needs one executive sponsor who is fully aligned with the “why” behind the transformation and who needs the transformation to succeed. The executive sponsor should be involved in determining the “why” because they will need to intervene when challenges arise as well as appoint and support the leader who will drive the program day-to-day. The executive sponsor will need to embody the compelling critical event and support whatever needs to be done to advance the program. Examples could include engaging additional people, making a very unpopular decision or changing staff on the program. The executive sponsor’s commitment needs to be unwavering.

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• Be honest. Once the leadership team has identified its compelling critical event, it’s very important to test the messaging with a sample of front-line employees. Share your proposed compelling critical event with a small sample of those who will be involved in the prospective digital transformation program. Assess their reaction. How do they feel about the event? Will they find it compelling enough to make the hard decisions throughout the program and remain committed to timelines?

Conclusion

Leveraging a north star alone to drive digital transformation program success clearly isn’t enough, as evidenced by the significant failure rate of digital transformations. You can help ensure digital transformation success by guiding the team to a compelling critical event when you get a seat at the table as a technology leader. Be exact, be resolved, and be honest as your leadership team selects your compelling critical event. This is one of several steps you can take to help lay a solid foundation for a successful digital transformation. I will share additional ideas in future articles.

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