Before COVID-19, holistic, strategic digital transformation was a good-to-have, something to get to once other more pressing business needs were met. Even in some of the organizations going through their digital journey, digital transformation was merely a glorified name for licensing/purchasing tools to solve business problems in a piecemeal manner.
One of the few silver linings associated with the pandemic is the scale at which it has accelerated the adoption of digital. Post its ravages, digital has moved to the position where it decides the competitive advantage and indeed the very fate of companies across industries and geographies.
This change and the sudden increased dependency brought upon by digital acceleration forced organizations worldwide to scramble to reimagine everything, from customer interactions and workplaces to business models, while looking at them through a digital lens. The writing had been on the wall for quite a while, but COVID-19 brought it to sharp relief.
David Rogers, the author of The Digital Transformation Playbook, sums it up best with this quote:
“Firms already well along on their digital journey before 2020 are leaning into their newer business models, like Disney reorganizing to focus more on its streaming service. Businesses that have been sitting on the digital sidelines working on their strategic plan are now scrambling to find their best path forward.”
Why does a relatively smaller percentage of digital transformation initiatives bear fruit?
Companies are acutely aware of the importance of digital transformation. According to HCLTech’s report on digital acceleration, 91% of the companies surveyed felt digital transformation is a priority, and 89% planned to invest more heavily in at least one next-gen technology.
Yet, few digital transformation initiatives succeed. Embracing new technologies alone isn’t enough. While 35% of the respondents reported it was the lack of internal capabilities, 31% stated that cultural mindset was a huge barrier to digital transformation initiatives.
In a word, it all boils down to the right mindset, which is of continuous improvement, and the right people — product managers.
Why digital transformation initiatives must be product-centric rather than project-centric
Several organizations consider digital transformation initiatives as projects with a start and an end date — a one-and-done initiative. However, as mentioned earlier, continuous improvement is the key to successful digital transformations.
The first step to ensuring a successful digital transformation is assuming that it is never done. Just like products, digital transformation initiatives must be agile, iterative, and constantly evolving with changing customer needs, market trends, new technologies, and sudden business imperatives. That’s why businesses must look at digital transformation through the lens of product management.
Product management hinges on:
- Continuous experimentation
- A culture of failing fast and upskilling to stay relevant
- Drawing actionable insights from data
- Using product analytics to understand what’s working and use it to drive decision-making
The factors mentioned above are also essential to establishing a future-proof digital business.
Why product managers can be the right catalyst to drive digital transformation initiatives
Change is hard, and for it to be effective, an organization needs the right talent — the right change agents. That is precisely where product management and product managers shine.
Product managers are uniquely skilled in prioritizing — picking the right problems to solve by understanding the changes in market trends and consumer demands. Retail giant Target tapped into its lean model of shipping goods and heavy investments in online services to weather the storm and emerge a winner.
Even before the pandemic, the retailer had started laying the groundwork for digital sales and curbside pick-ups. They used its stores as hubs to ship online orders, allowing customers to pick up their orders from the store parking lots. Once the pandemic hit and consumers wanted supplies quickly but avoided going to the store, Target optimized its curbside pick-up from stores for greater accuracy by adding pick-up spot numbers, pick-up codes, and sign-offs. As a result, online sales grew by 195%, with a substantial increase in drive-up and pick-up options.
The ability to prioritize the measures that would create the maximum impact on business growth is a skill that sets product managers apart. Competent product managers can examine the data collected and use their vast consumer expertise to pinpoint opportunities, prioritize, and chart a course. That’s essential in digital transformation initiatives as almost 70% of the organizations surveyed had a digital strategy in place, but only 10% had a deployment plan. Moreover, product managers care about how their products are perceived. Product managers can tap into their experience to reduce friction in interactions across multiple teams and collaborate to work towards common outcomes when handling a digital transformation initiative.
Lastly, you can’t be successful with any kind of digital transformation without the rest of the businesses caring. And to get people to care, they need to understand what the value is. Product managers can make your people care for digital transformation initiatives by educating the entire business on the value of continuous engagement and using product analytics and data to drive their points home.
Having the right people is just one part of the equation. It is equally important to empower them to own their products and their outcomes completely and drive change at an executive level. Unfortunately, it’s not uncommon to observe cases where product managers only handle the operational aspects while senior leadership dictates the strategy. In such cases, even the best product managers end up being glorified project managers responsible for the backlog, but with little authority to bring about organization-wide change, innovate, or add value.
Treat your digital transformation initiative as a product, bring in empowered, competent product managers to drive it, and watch the magic happen.
Why data can make a world of difference
A StraightTalk study found that almost 90% of organizational leaders don’t have any visibility into existing business processes. A fragmented or non-existent data strategy makes it difficult to facilitate data-driven decision-making, which in turn makes it impossible to understand how your internal stakeholders are faring with your digital initiatives.
Product management is all about making decisions backed by data. It involves learning from each iteration or experiment using product data (like feature usage or user retention) and direct feedback (from the end-user). As a result, product managers know what their customers want and gauge whether the product is serving its purpose. Product managers also rely on product analytics to drive their development cycles and validate whether the engineers are prioritizing the right things.
Leveraging data similarly to further a digital transformation initiative can play a monumental role in seeing it to fruition. It all starts with a clear and robust data and digital strategy.
Getting started with a product management approach to digital transformation
According to Gartner, digital transformation can be anything from IT modernization to the invention of new digital business models.
Incorporating such changes requires having product managers at the helm, in charge of your digital assets. Product professionals (product owners or product managers) are better suited to understand that digital transformation is a continuous, long-term process with iterations that last longer than a mere few weeks or months. They’re data-driven, cross-functional, customer-centric, and open to learning constantly. Organizations must empower these product professionals to bring about actual change.
Organizations must also embrace a culture of experimentation. That involves normalizing running failed experiments and encouraging your employees to learn from their failures to innovate faster and more effectively.
Finally, organizations must prioritize creating and deploying a robust data strategy to facilitate data-driven decisions before initiating any digital transformation. They should encourage two-way communication so that all internal stakeholders can provide feedback, and product managers can incorporate them in subsequent iterations to consistently drive more value.