How to Fail at Digital Transformation

Opinion: There’s still time to do it right

Don't become the next Blockbuster
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When Blockbuster Video recently announced that it was closing one of its six remaining locations, in North Pole, Alaska, many individuals in the lower 48 states were scratching their heads. With only five stores left in the nation, most Americans had forgotten about Blockbuster.

Saddled with slow internet speeds, Alaska was the final frontier for the once-omnipresent video-rental chain. Now that the northmost state’s cellular infrastructure is being upgraded, Blockbuster’s five holdout locations are at risk of sinking into the tundra, figuratively speaking.

Blockbuster, in other words, was forced out of business by others—Netflix, Hulu and HBO—that digitally transformed. As people move more of their lives online, companies that don’t meet them there will become historical footnotes. Companies that step up to the challenge of digital transformation will continue on.

There’s a catch, though. Digital transformation is not like a new paint job or a revamped product line. The process looks different for every company. Some will have to take small steps to modernize, like supermarkets that allow customers to order online. Others will need to rethink their core business model altogether.

The struggles of legacy giants Sears, GE, Kodak and Barnes & Noble, among others, bear witness to how risky digital transformation can be.

If your own company hasn’t digitally transformed, there’s still time to do it right. To know what’s right, let’s point out how to fail first.

Failure tip No. 1: Let it happen organically

As companies rush to stay ahead of the curve and meet the changing needs of their customers, efforts to implement new technologies often take on an urgent, ad-hoc approach. Sometimes you have to race to catch up, is the rationalization.

Your own business may have seen ad-hoc digital transformation. It usually happens when someone on the ground notices an opportunity for technology to make their job or their product more efficient or effective. Maybe their idea is indeed a great one, but it can’t get traction because they don’t have the budget or the buy-in necessary to get their initiative off the ground. Or else they succeed in implementing a change in their department, but they are so siloed that other areas of the company miss out.

This is the stage at which many companies stall. One digitally transformed department is better than none at all—or is it?

As counterintuitive as it may sound, the CEO should be the one to lead the digital transformation. Applying a big-picture perspective to setting priorities and selecting areas where digital transformation can have the biggest impact will allow a strategic, organizationwide unfurling of digital transformation, rather than the scattershot, siloed approach that so often happens in practice. Coordinating systems and departments from the top down will result in an aligned approach that saves time and money.

In a word: Don’t just let digital transformation happen. Being strategic will pay off.

Failure tip No. 2: Ignore outside perspectives

If there’s one thing to be said about Facebook CEO Mark Zuckerberg, it’s that he is great at marching to his own beat. It is a double-edged sword. On the one hand, Facebook grew into one of the biggest social media networks on the planet under his leadership. On the other hand, he has refused to apologize for the Cambridge Analytica scandal or to discuss Russian operatives leveraging Facebook during the U.S. election. Perhaps the rationale is this: In today’s quick-moving business landscape, being able to slough off the onslaught of well-intentioned advice is key to staying lean and on your own mission.

The digital transformation consulting industry is worth $23 billion, and with good reason—businesses are scared to go it alone. Many businesses rationalize that before shelling out cash and turning to an outside consultant, the company should shore its strength internally.