Thanks to 4G and social media, the highlight reels of the lives of others often stir a jittery feeling. We sometimes find ourselves experiencing FOMO, or the “fear of missing out” and asking ourselves, “Why am I not doing those things?”
FOMO is an experience that leaves some feeling like we really ought to do something more, something different and something spectacular. In business, FOMO is real and needs to be addressed, especially in a time where both traditional companies and disruptive new entrants are fighting for market share and trying to outdo one another.
In a study on disruption that Telstra conducted last year, we learned that 97% of organizations already have a formal strategy in place to manage disruption, led by a CIO and actively supported by the CEO. The pressure then falls on the CIO to enable their organization to disrupt itself using technology – an approach commonly referred to as “digital transformation.”
Companies across Asia are set to spend US$16.5 billion on digital transformation projects from now till 2020, yet 70% of these projects are expected to fail. Here are three reasons why:
1. Decision Making Driven by Technology-linked Activities
Imagine that Google releases Google Glass for consumers. In this scenario, some might rush to purchase the smart glasses without adequate research and consideration. By simply responding to the shine and novelty of new technology, one might not be privy to a whole host of challenges before it’s too late. These challenges might make a snap decision not worth the investment.
In the same way, businesses rushing to implement a new marketing technology stack just because their competitors are using the same does not make them “digital.” These businesses are missing the point. Many organizations think that technology is the panacea that solves all business problems. When technology is seen as a hammer, suddenly everything starts to look like a nail. But technology on its own cannot solve problems.
2. Kicking Off Transformation Projects before Understanding Desired Business Outcomes
When businesses adopt a short-term view and plunge headfirst into unknown territory (or in other words, they strike while the FOMO is hot), they may soon find themselves in sticky situations – huge budgets might be spent without generating any real value, and they may find themselves too deep in to pull themselves out. In this instance, “digital” threatens to derail, rather than transform businesses.
Before starting on a digital transformation project, some questions companies should first ask themselves include:
· What customer experience are we seeking?
· What products and channels do we potentially want to be in?
· What financial metric are we trying to drive?
Technology that works for other organizations might not work for others. Introspective moments like this can help prevent organizations from making snap decisions.
3. Underestimating the Amount of Cultural Change That’s Required
Lastly, it’s not just about the execution or technology; a huge mindset shift is required for successful digital transformation. Digital transformation leads might be grappling with the “buy versus build" question when it comes to enterprise software and even talent. Our recommendation to businesses is: buy and build.
When the starting point is asking what key ingredients are required to achieve a certain outcome, the way is deliberately paved for a capability change (e.g. do we hire new talent; do we bring in an external consultant). This can then open the business up to a change in culture. Companies must recognize the need for management to endorse and drive this change, before integrating technology into the mix.
Technological Adoption ≠ Digital Transformation: What You Need Instead?
As observers of companies that have fallen behind because they failed to anticipate the mobile revolution or the sharing economy, we have nurtured in ourselves a fear of missing out on the next “business-changing” technology. What then usually happens is that businesses buy a cool new piece of software or build new apps – and approximate that to “digital transformation.”
But as they say, hindsight is 20/20. When leaders take a step back and adopt a holistic view of a business problem, they will notice that adopting new technology for the sake of it does not actually drive transformation.
“Why am I not doing those things?” The answer is clear. Technology plays a mere supporting role. What companies really need is bona fide corporate transformation, with an emphasis on strategic innovation for the long-term, and shared ownership.
