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The death of digital transformation

The death of digital transformation

Disruption and uncertainty have marked the business environment for the last handful of years and one of the key trends to emerge is the need for agility to navigate the challenges. The resulting trend is a buzzword I’m sure you’ve heard – ‘transformation’.

By becoming a buzzword, transformation has demonstrated the classic case of everyone doing it but no one agreeing on what it means. We see businesses in the retail industry transform via tech platforms while others transform through data centralisation – apparently, digital transformation means different things to different people.

The frustrating part is how organisations treat transformation. They stop everything or issue a go-slow in order to transform. They skim their resources and redirect them towards transformation. Why does a business need to stop all other business for this one activity and team? It’s as if transformation is the goal and not the method by which we should improve our businesses.

There must be a better way. Companies like Google or Amazon do not succeed by putting their business on pause while they run transformation projects. Transformation is part of their daily operations. Can you pinpoint the moment Amazon stopped being a book sales platform and started selling everything? No, because that feature was part of a continuous process. Sometimes you have the build the plane and fly it at the same time. (Hat tip to my GM Julie for that saying.)

A revolutionary large-scale transformation project is expensive and often, when it reaches completion, the business environment has changed sufficiently to render most of it obsolete. But transformation does not need to be big: in fact, we have achieved some truly business-changing results with quite small tests. If organisations could adopt micro transformation instead of major change projects, it would unlock the transformative power of experimentation.

What is micro-transformation?

Micro-transformation is the continuous practice of making small changes that create tangible impacts. Over time, the collective effect of these impacts helps steer businesses in a more suitable direction according to the outcomes they seek. The foundation of micro-transformation is the collection and analysis of data to select what changes to make that will lead to an intended outcome.

The beauty is that it is low risk, low cost and has quantifiable effects. One of the things we at New Republique have observed, as experimentation practitioners, is that often the impacts from small changes can have ongoing effects that help shape the course of the business.

Here’s an example from an insurance client we work with. This client had a traditional setup with walk-in branches and a call centre to field customer queries. We ran a series of tests focused on online chat that ended up driving a massive focus into chat as a sales channel. The ripple effect has led our clients to start thinking about other elements of their business where they could use experimentation to gather data. That’s transformation.

Experimentation drives micro-transformation

Much of what makes micro-transformation powerful is its ability to quantify customer behaviour using data, and then giving the organisation opportunities to make changes that work towards an outcome. Experimentation, because it is inherently data-led and customer-centric in nature, gives businesses a valuable tool to assist with decision-making that helps to confirm each pivot.

In turn, each pivot is part of a series of micro-transformations. Experimentation is a key driver of micro-transformation because the small wins from your experiments can be used for your next pivot, which leads your next action, feature or function, as well as further experiments, to shape your products and services.

The interesting part is that we often have clients who come to us with growth objectives – for example, to lift conversions or to increase profits – and while that is a result we can and do deliver, it’s actually a by-product of the most valuable insights we can give them about their customers. Micro-transformation changes the course of their thinking and the culture within the organisation.

The experimentation mindset is centred on learning. It means that even experiments that don’t win are valuable lessons that give you data to inform your next move. The benefit is that the cost of finding out is small, which means the risk is easier to accept. It’s a mindset shift that takes organisations from a transactional, output-focused way of reacting to change to a research-driven, transformative and outcome-focused way of addressing change.

True transformation is small and ongoing. Micro-transformation helps businesses deal with change in a way that is manageable and data-led, so they are primed for the opportunities that emerge from trends and disruptions, and using experimentation as the engine of micro-transformation gives organisations the assurance they need towards the direction they should take.

Learn how your organisation compares with others in experimentation in The Pulse Report.