67% of managers believe that digital transformation has become a question of their company’s survival. And it’s certainly a major challenge – 76% of digital leaders are set to report increased turnover in 2017. But just 16% of companies have completed their transformation. What are the most practical, effective measures businesses can take to make the change? We take a close look at the seven internal approaches to digital transformation that are all the rage right now – the hits and misses of 2017.
In its 2016 ‘Technology Vision’ annual report, Accenture emphasized that companies undergoing a major digital transformation need to understand that the focus needs to be on individuals.
When I was researching this article, I realized that there’s an impressive amount of literature on how to achieve digital transformation. This host of theories with their clever acronyms are all well and good, but what should businesses do in practical terms? Above all, most managers want to know what they can do today to start or accelerate their company’s digital transformation.
Our 2017 rankings of seven internal approaches to digital transformation
So – in reverse order – here’s how we rank the seven most popular practices in businesses’ digital transformation. We used six success criteria, each with a score of 0 to 3.
Let’s take a closer look at each of these measures – and whether they’re hits or misses.
7. Suggestion box
The thinking behind a suggestion box is well-meaning – giving employees a voice, anonymously or not, and asking for their opinion on how to improve their daily life at work. But unfortunately, the suggestion box – either physical or virtual – often ends up becoming a list of grievances, including requests for free coffee and new chairs, or worse, calls for Philip from accounting to be sacked.
The other aspect of this tool is that it’s a top-down initiative, created by and for the top management who put it in place. When it comes to sorting through the suggestions, the process is often opaque, and employees are rarely involved.
It can even be counter-productive: given the low-quality suggestions that are fired off, management rarely takes any action, meaning that the employees most closely involved in the process become frustrated and disengaged.
6. Enterprise social network or ESN
Creating an enterprise social network was supposed to bring all kinds of benefits – more communication between departments, a friendlier atmosphere and higher employee performance thanks to better collaboration.
But although Generations Y and Z (the digital natives we hear so much about) might use an ESN, uptake is a lot lower among previous generations.
Take a look at: 7 essential tips to recruit people from Generation Z
The digital divide is still widespread within companies! A common error that managers make when implementing an ESN is to impose a new tool on their teams without giving them proper information about the benefits that it brings. Employees see the ESN as yet another tool that they’re forced to learn and use, rather than because they want to.
5. Innovation lab
In its July 2015 study entitled The Innovation Game, Capgemini Consulting estimated that 38% of the world’s 200 largest companies have set up internal innovation centres. They’re known under a range of names, including Lab (IBM), Garage (Google), Village (Crédit Agricole), Foundry (General Electric) and Greenhouse (Deloitte).
These labs have two purposes: to boost innovation within the group and to identify new markets.
However, the majority have three main faults:
- They are formed of an extremely restricted elite and don’t represent employees as a whole, which immediately creates a two-tier company: a cutting-edge digital lab on the one hand, and the rest of the business on the other.
- They are faced with a major paradox: the need to be close enough to business lines to understand their needs while staying at enough distance to allow the lab to find new growth drivers in unexplored territory.
- This dilemma explains their poor performance. The study estimates that 80 to 90% of these labs fail to generate any growth for their company.
COOCs (Corporate Open Online Courses) are online training courses that businesses offer to their employees regardless of their level of seniority. They’re an excellent tool for training new recruits, bringing the most senior employees up to speed, and providing continuous professional development. The fully digital and on-demand format provides real flexibility for participants and also streamlines training costs for the business.
The problem is that for most of the time, employees play a passive role in the courses, especially if they aren’t supplemented with classroom-based workshops and regular follow-up from instructors. Employees also generally follow COOCs on their own, which does little to boost collaboration within the company. Finally, whether training is online or offline, there’s no escaping from the Ebbinghaus forgetting curve – after six days, recall of new knowledge falls to 25%!
3. Business Games
Business games or serious games are simply corporate versions of the educational games we give to kids. They boast all the benefits of COOCs, plus they minimize the forgetting curve.
In business games, employees act as the main character, working throughout the game to unlock levels. It’s scientifically proven that games help people to retain information by introducing an element of enjoyment, reward and collaboration.
Business games also have the advantage of reaching across the generations, not to mention that they’re easy for everyone to pick up.
But make sure that you strike the right balance between enjoyment and education. If your game is too fun, it won’t be effective in boosting your teams’ skills. And if it’s too educational, participants won’t find it appealing and will lose interest.
An excellent example of a successful serious game is the Accenture Superhero Collaboration Game launched in 2014–2015 by the renowned consulting firm. Over five months, all of the firm’s employees from around the world were invited to form teams to take a 2,000-question quiz, both online and in person. The aim was to reconnect their consultants – who were scattered throughout the client base – with the company’s values and increase awareness of other departments’ activities. With a combination of questions and challenges, the game encouraged employees to get their friends and family involved. A light-hearted and humorous tone, coupled with management’s willingness to make fun of themselves, helped to make the operation a success
2. Internal hackathons
The word ‘hackathon’ is a contraction of ‘hack’ – a quick DIY solution to overcome a problem – and ‘marathon’ – a distance event that tests participants’ stamina. Essentially, a hackathon is a competition that encourages participants to put forward their most relevant and innovative solutions to a business issue.
The principle behind internal hackathons is simple – the company identifies one or several issues to overcome using its employees’ collective intelligence. The challenge could be to create a new product, build an innovative marketing campaign or redesign the offices to promote well-being at work.
The business then invites its employees to work in teams to put forward their best ideas. Throughout the hackathon, employees have access to in-house or external mentors who provide coaching to help take their ideas as far as possible.
Finally, a jury assesses and grades the proposals to determine the winning teams, generally at a seminar-style corporate event.
Hackathons are an excellent asset for companies that are looking to boost their digital transformation, providing six main benefits:
- Through crowdsourcing, the company is able to identify its in-house talent with intrapreneurial potential, or even ideas that could be a game-changer for the business.
- Participants in internal hackathons have the opportunity to boost their creativity to help the company make progress.
- By encouraging teams from different departments to work together, hackathons help to break down silos between departments and get participants involved.
- Through hackathons, employees become more familiar with new digital tools without this fact being seen as a negative – in fact, it’s an asset that helps them to stand out. After all, the best way to learn is through action, and hackathons are the ideal environment for learning by doing.
- They encourage healthy competition between teams thanks to their focus on coopetition (cooperative competition) and on collaborative innovation, which emphasizes collective intelligence.
- They help your teams to become stronger by focusing their energy on creative problem-solving rather than on the problems themselves.
In 2016, we supported the Up Group with its Innovation Challenge. As part of this three-month internal hackathon, employees from the Group’s HQ were invited to reflect on the theme of ‘What new services should be developed to improve payment methods?’. It was a roaring success: 20% of employees took part in the challenge, and 65% of staff voted for their favourite project. “The 200 attendees discovered six very different projects that were all highly strategic to the Group. The winning project will be trialled before the end of 2016. If the results are encouraging, the solution could be launched commercially in 2017. As well as this project, ideas from the Innovation Challenge will allow the Group to expand its current and future offerings,” said Bertrand de Frémont, Director of Innovation at the Up Group.
But make sure you put business lines in touch with internal decision-makers as early as possible – i.e. when you’re designing the hackathon. If you don’t, you run the risk of ending up with hundreds of unusable ideas that are either not feasible or not in line with your company’s strategy.
It’s also essential that you include all employees in the voting process. There are two benefits to this: the challenge gets guaranteed internal credibility (no suspicions of cronyism or special treatment) and the hackathon becomes a key tool in introducing people to the digital world. And for employees, taking a look at dozens of innovative projects designed by their colleagues carries a powerful message – good ideas can come from anywhere!
Finally, don’t neglect the mentors and hosts who’ll be involved in the hackathon – their expertise will actively contribute to the event’s success, and the opportunity for mentoring is one of the main incentives for employees who take part in an internal hackathon.
1. Intrapreneur programmes
The logical follow-up to an internal hackathon, an intrapreneur programme involves helping your most motivated and talented employees to change the game within the company. Intrapreneurs are employees with strong entrepreneurial spirit who help to change the company’s mindset and its culture.
Only a handful of companies launch programmes like this. The reason? Because it needs a lot of engagement from top management and from the employees involved, not to mention financial investment. But it’s the most powerful way of boosting a company’s digital transformation. As a contract between the company and its most adventurous employees, it’s a chance for the business to retain its talent and for staff to set up a business without giving up the security of being a salaried worker.
The La Poste group understands this. In 2016, we helped them to roll out their internal competition, 20 Projects for 2020. The aim? To reveal 20 internal startups created by employees from different backgrounds and departments. These 20 startups are currently at the acceleration stage and, if all goes well, are set to be incubated within the group.
Since 2011, we’ve observed and supported major groups and SMEs in their drives for innovation. It’s allowed us to identify the six key success factors that are part of the best approaches to digital transformation:
Management teams are heavily involved in the process through their investments (time and budget), practical measures and open-mindedness.
Employees want to make personal and intellectual investments, and devote a portion of their time to the project.
Impact on employee satisfaction
The approach has a positive impact on employee morale and well-being by developing their skills and their trust in their peers.
Building loyalty among talent
The approach allows the company to retain and build loyalty among its best employees.
Training for and adapting to the digital world
The practice is a way of training employees and is an effective method of allowing them to acclimatize to new digital tools.
There is a focus on teamwork, which helps to break down barriers between departments and business lines.
Your employees are the most important element in your digital transformation
Digital transformation can be defined as a process of continuous change, driven by management’s vision and market pressure. Without total commitment from the top management team, a company’s transformation will fail. In the same way, the digital world has irrevocably changed consumer purchasing behaviour, meaning companies need to organize themselves differently.
But there’s a third key factor that’s missing – employees. Without them, there can be no digital transformation. Whichever technique you choose, make sure that you get all of your staff on board. Ultimately, the best approach to digital transformation within your company is one that allows top management and employees to disrupt their own company – together.