The following is a guest article from Megan Walsh, director of technology partnerships at Perficient.
Digital transformation. It’s the tech trend of the moment, but very few organizations have achieved its full promise. Who has the answers we need? Bill Gates? Mark Zuckerberg? Maybe Elon Musk?
One leader we can learn a lot from is Theo Epstein. Though he may be an unlikely champion for digital transformation, his successes with the Boston Red Sox and the Chicago Cubs are fantastic examples of how to get it right.
Why Theo Epstein should be your digital transformation role model
Theo Epstein was the brains behind recent World Series wins for both the Boston Red Sox and the Chicago Cubs, ending 86- and 108-year droughts, respectively.
When Epstein came on board as the Cubs’ president in 2011, they were coming off a fifth-place finish in the National League Central Division and had a depleted farm system. Scouting reports were still filled out by hand and kept in a basement filing drawer.
Epstein created a five-year plan that focused on modernizing operations, embracing data analytics, acquiring and cultivating young talent, and reconfiguring lineups instead of going for short-term wins. He warned that the first three years would be difficult.
In fact, the Cubs finished dead last in their division for the first three years of his presidency. But, the Cubs stayed on course and in 2016 won the World Series.
So what does that have to do with digital transformation?
Epstein understood that creating a winning baseball team would require a strategic shift across many different parts of the organization. The strategy also needed to be played out over multiple years, and required buy-in from all levels. Sure, he leveraged technology, but in support of the larger organizational changes, rather than as the driver.
Perhaps most important, he knew that the journey would require a lot of patience. Positive transformation doesn’t happen overnight, and for a team (or company) to continue to succeed, it must be willing to change completely and can’t ever stop trying to improve.
Epstein managed many of the common obstacles that impede companies’ progress, such as:
- Hoping for a magic bullet — a one-size-fits-all, "here are the X things every company needs for digital transformation"-type roadmap
- Assuming that technology is the only critical component of the strategy and ignoring the culture, people, processes, etc.
- Focusing too much on individual tools and not processes overall, or focusing too much on maintenance of these tools instead of improvements
- Hanging on to outdated legacy systems that are beyond their useful life
- Maintaining tech toolboxes that consist of multiple disparate systems rigged together over the years, creating inefficiencies and inconsistencies
- Focusing on cost reduction instead of growth — or, when focused on growth, building for the customer of today, rather than the customer of tomorrow
He also understood that you need a bold strategy for digital transformation. As research from Forrester, McKinsey and many others show, companies that make only incremental improvements will be out-performed by others that take bigger bets.
Where to start
So where does one begin with digital transformation? There’s no checklist, but most companies can set the technological foundation by starting with these three steps:
First, companies can perform a holistic assessment of processes, systems, and requirements to create a complete view of how everything ties together. That will help organizations understand rationale and interdependencies across the board.
Companies need to also questions about everything: Where do interactions take place? Who is responsible for passing things through departments? How are employees using the applications and technologies within the company, and are they actually using them in the way leadership thinks they are? What can be optimized? What can be automated? How can things be improved? Are legacy systems and tools still functional?
Transformation won’t take place without a complete understanding of how the entire company functions as a whole. This may require an outsider’s perspective. Staff may be too busy maintaining current systems, or may not have the right frame of mind to look at everything holistically, because they’re too close to it.
Staff also may be uncomfortable providing their input; sometimes leadership insists on adding a certain app or process, and no one wants to speak up and say it isn’t working, or that there is a more efficient way of doing things. In many cases, having an unbiased, impartial third party provide an outside perspective can end up being the most effective way of figuring out what is working and what is not.
This assessment can lay the foundation for the technological aspect of your company’s digital transformation. An even larger assessment that encompasses market opportunity, customer insights, and even your company’s organizational structure will be necessary for a complete reinvention.
Second, within a longer-term plan, identify high-return opportunities to make improvements in manageable chunks. If there is no long-term plan, simply look at the systems and processes that are in place today and identify those that will need to be updated regardless of strategic plans. This is the low-hanging fruit principle: figure out which improvements are going to have the biggest bang for your buck, and divide those improvements into smaller pieces that can be tackled over time.
A word of caution: Do not artificially move low-hanging fruit to the front of the queue without adequately thinking through dependencies or long-term return on investment, or you will simply be adding to the messiness that comes from trading returns for thoughtfulness.
Finally, develop the in-house expertise to manage your systems going forward to help the company continue its evolution. This may require using an outside expert to train in-house staff; there is a talent shortage in tech, and sometimes current staff won’t know how to develop or maintain cutting-edge technologies because their focus has been elsewhere in recent years.
Third parties can be brought in to help train your staff on the skill sets they need to maintain and develop new systems. These skill sets ensure the company doesn’t stagnate and create an environment where all employees can continue to grow and learn.
As Epstein can attest, true transformation requires a new way of thinking. To effect meaningful change, you’ll need to focus on growth vs. cost reduction, plan for tomorrow’s customers, and set goals as part of a continuous cycle of progress rather than as one-time achievements.