In Part 1, you learned how to identify opportunities - and needs - to embark on a digital transformation journey. You’ve seen challenges and potential to equip your business to succeed in a fast-changing world. But how do you win (and maintain) the support from the business to deliver your project?
In this chapter, we are going to start to answer that question.
Break Digital Transformation Projects Down Into 3 Stages With the BCG Framework
Boston Consulting Group (BCG) has advised organizations (and their leadership teams) on how to execute hundreds of transformations that have created significant operational and financial impact.
Digital transformation projects typically take many years to deliver. Dividing these projects into three stages allows you to understand and deal with the challenges you will need to overcome at each stage.
The stages of BCG's Transformation Framework are:
Funding the journey.
Winning in the medium term.
Organizing for sustained performance.
The first two stages are spread over the first six months to a year of the project, and the last one is until the end of the project.
Let’s take each of these in turn.
1. Secure Funding the Journey
Sometimes the hardest part of a journey is taking the first step. In a digital transformation project, that means getting the agreement of the organization to commit to the project, and that commitment means providing the strategic agreement, the financial budget, and the human resources required to make the project possible.
Securing funding can be difficult. You will be competing against all the other things the organization is focused on delivering. There will also be people within the organization who will question whether the project is necessary - or a good thing. Even if you don’t have that challenge, there may be time and money pressure, which means you have to create a compelling business case for your transformation project to get the green light.
And even when you’ve got the immediate buy-in to get started, you’ll need to be able to show some immediate financial impact from your project - whether from increased sales or reduced costs. Attention is always highest on a new project in the early stages, however many times you’ve shown that the project could take 3 - 5 years, say, to complete. You still want to be able to show quick wins to provide immediate validation that the decision to fund and resource the project was a good one.
🐕 For example, with Tap Dogs, the Blue Cross got a significant uplift in social media mentions - people shared photos of themselves with the dogs on Instagram and Twitter, which helped the charity secure coverage in newspapers and TV news. This counted as immediate validation of the project, even though it was only in the proof of concept stage, and helped warrant a national rollout the following year. It also ensured that the charity continued on the path of its broader digital transformation.
2. Win in the Medium-Term
Once you’ve got the project approved, funded, and resourced, it’s time to get the project itself underway.
To win in the medium-term, you have to go beyond the quick wins that made the organization (and its leaders) confident that they’ve done the right thing getting started. Here you have to produce the organizational changes that your digital transformation project has set out to achieve.
Depending on the scope of your project plan, this might include:
Changes to the business model - potentially as fundamental as the products that are on offer.
Changes to the operational model that provides services to the customer.
BCG put it as follows:
“Initiatives to win in the medium-term are typically more difficult to conceptualize because they require breakthrough thinking, usually in areas that are less familiar to the organization.”
When you are dealing with thinking beyond the organization’s and stakeholders’ comfort zones, it can take longer for results and require the application of skills they don’t already have. Not only that, you are often trying to join efforts across normal organizational boundaries - or silos. Breakthrough thinking is the deliberate, focused approach to lowering those boundaries with radical change rather than relying on incremental small shifts.
3. Organize for Sustained Performance
In much the same way that personal weight loss programs work best when they get people to rewire how they eat and behave rather than simply going on the rollercoaster of crash diets followed by renewed weight gain, a successful digital transformation project needs to create sustained organizational change.
This ensures that the culture and organizational environment has changed - creating an always-on transformation where the organization can constantly adapt. Therefore, this third stage of the transformation framework is about change management and planning for life once the digital transformation plan has come to fruition.
The BCG framework breaks down long, complex projects into three more manageable, distinct phases.
The initial phase is to secure the funding and approval for the project to commence. Identifying and delivering quick wins is important here.
In phase two, the focus shifts to producing organizational change. This will require breakthrough thinking.
The final phase is to create a culture of continuous innovation, creating an always-on transformation.
Now that you’ve got an overview of the framework - and before we dive into more depth on these three stages - it’s worth thinking about what the framework tells us: one of the most critical components in a transformation project is the people. So in the next chapter, we’ll explore how to understand the key stakeholders - and what matters to them.