Business Leaders Must Fail Fast to Succeed at Digital Transformation
The digital transformation journey is by no means easy.
Below Jon Payne, Manager of Sales Engineering at InterSystems, explains why business leaders need to hurry up and fail before they can move onto succeeding when it comes to digital transformation.
According to McKinsey, the success rate of any kind of transformation is consistently low with less than 30% succeeding. Even among digitally savvy industries, such as telecoms and media, the success rate of digital transformation doesn’t exceed 26%. With such low levels of success, business leaders must reconsider their organisation’s approach to digital transformation. In order to successfully carry out digital transformation, businesses must be agile in order to rapidly evolve its processes, organisation, the way it engages with customers and reacts to shifts in the market. To achieve this level of agility, business leaders and their organisations must implement a fail fast approach.
Businesses must not be afraid to fail as it will enable them to learn, improve and eventually get things right, but they must fail quickly and learn the lessons of the failure even faster. In order to adopt a fail fast approach to digital transformation, business leaders need to ensure they arm their employees with the right tools and cultivate a culture that encourages employees to not be afraid to experiment and champions learning from mistakes.
Businesses must not be afraid to fail as it will enable them to learn, improve and eventually get things right, but they must fail quickly and learn the lessons of the failure even faster.
The right tools
Key to failing fast will be using the right tools. One of the most important tools a business can have to help them on their digital transformation journeys are data management platforms. In 2019, if leaders are not basing their business decisions on data, they are going to be left behind. From finance to marketing, sales forecasting, even hiring, organisations today rely on clean, accurate and comprehensive data from inside and outside the organisation to run their businesses. Data management solutions act as the intelligent core to power a range of transformation initiatives which is one of a few tactics integral to the process of failing fast. Often, these solutions provide the capabilities to speed up and simplify digital transformation initiatives and can be integral to the process of failing fast. For example, visualising data flows and the interactions between processes, components and people in real time allows for rapid and accurate diagnosis and monitoring of the status of real-time and historical data, integrations, and processes. This means organisations can see the impact of any changes immediately and act accordingly so as to speed up the process and pinpoint any errors in real-time.
Data management tools will also be integral to setting out new metrics and measurements. Business leaders need to set expectations about how many failures are acceptable and how they can measure the success of changes. This way, it will be easy to spot when developments have failed and ensure they are rolled back as quickly as possible, ready for a new version to be tried. This is something we regularly see with apps and websites such as Amazon who will roll out tweaks to the user interface to certain customers and use A-B testing to determine which changes are successful and which haven’t worked.
Create the right culture
According to Telstra, focusing solely on technology rather than a wider range of business factors such as employees, may, in fact, be hindering the digital transformation of UK businesses. Business leaders must, therefore, ensure they cultivate a culture that ensures that the fail fast mentality is adopted at all levels. However, as most people have been programmed to see failure or making mistakes as something to be avoided at all costs, business leaders must lay out clear guidelines of what failing fast means and encourage employees to adopt this approach.
Business leaders must firstly work to understand their appetite for failure and determine the risks they are willing to take.
In order to do this successfully, business leaders must firstly work to understand their appetite for failure and determine the risks they are willing to take. After all, big risks are likely to mean the organisation will either win big or fail big. With new metrics in place, business leaders will be able to better communicate with their employees the amount of failures they are expecting to see, for example, they may set this at 20%. Equally, they must also determine what ‘good’ looks like in different contexts in order for employees to be able to accurately measure the success of their work and make changes accordingly. Businesses must allow the room for employees to experiment and make mistakes, as long as those mistakes are quickly learnt from and changes are implemented.
By taking a fail fast approach, businesses will be able to rapidly create, launch or implement the innovation needed for digital transformation with the potential to completely change the way their organisation operates. Business leaders should ensure that all change is incremental – pushing out small changes frequently and measuring their effectiveness. If something doesn’t work, they must back out quickly, develop measures for how revolutionary to make the next set of changes and gain a common understanding throughout the business of what ‘good’ looks like. This will ensure that they are not wasting resources and going down dead-ends.