Digital fluency: high-value transformation in uncertainty

The COVID-19 pandemic taught businesses a lot of valuable lessons. But the biggest by far was that when change strikes, organisations need to evolve and adapt to meet new employee and customer needs, fast.

The trouble is, in the years since the pandemic began, the pace of change and volume of economically and operationally disruptive events haven’t just continued — they’ve grown. From global supply chain disruptions to geopolitical instability, every month seems to have brought a new major challenge for organisations to face.

Recently, we’ve entered an era of intense global economic uncertainty. Consumer spending power is down. The cost of living is up. And with the lessons learned from the pandemic fresh in their minds, organisations are looking for ways to adapt and quickly rise to shifting market and consumer demands.

Businesses know they need to transform, but they’re feeling the economic strain too. Resources are limited, and companies simply can’t afford to invest in the wrong capabilities or take big bets on transformations that don’t end up delivering the right kind of value.

They don’t want to stand still. But finding the right path forward with limited resources isn’t always easy.

Finding the right way to change

When it comes to identifying the digital capabilities you need — and the right way to transform — organisations should avoid:

• benchmarking themselves against others and constantly trying to keep pace with what their competitors are doing. What’s right for competitors isn’t necessarily right for them — even when they operate in the exact same market;
• focusing efforts at the bleeding edge of innovation and leaping to adopt high-potential technology, without a very clear view of what that technology should help their business achieve;
• casting too broad a net and trying to transform too much too quickly. If you’re overly ambitious from the beginning, there’s a good chance that you won’t see that broad vision become a reality.
   

Instead, what organisations need to do is focus in on what they really want to achieve — the immediate needs of their organisation and customers that have emerged amid today’s economic uncertainty. That’s why Thoughtworks encourages organisations to follow the Digital Fluency Model (DFM) when planning and scoping transformation.

The Digital Fluency Model

Through transformation, organisations are ultimately working towards becoming a modern digital business. Modern digital businesses can survive and thrive amid challenging conditions like the economic uncertainty we’re experiencing today, thanks to their capabilities across five key building blocks:

• A frictionless operating model that’s adaptable to any kind of change.
• Platform strategy that helps ensure technology can easily evolve alongside the organisation and its operating model, supporting innovation and helping companies lead change rather than just adapt to it.
• An iterative approach to product and experience design to continuously improve what the company delivers to its customers and people.
• Intelligence-driven decision-making and an appreciation for the diverse value and use cases that can be powered by the company’s data.
• Engineering culture and delivery mindset ensuring the rapid delivery of high-quality software that’s well aligned with user needs.
   

The model helps organisations map out their desired level of capability against those building blocks, working down to identify the specific capabilities they should invest in as part of their transformation, and giving them a roadmap to work towards it.

In times of economic uncertainty, it’s a hugely valuable tool for helping organisations avoid overspending and gain confidence that the steps they’re taking are going to deliver the right kinds of value.

But beyond that, the process of asking critical questions and drilling down to the exact capabilities an organisation really needs can change the way they think about transformation. It helps teams set better goals that lead to stronger outcomes, and start building a culture of iterative change and evolution.

Getting aligned on high-impact outcomes

If you work in the digital field in any capacity, chances are you’ve seen this statistic thrown around a lot. According to a 2020 study by Boston Consulting Group, 70% of digital transformations fail to deliver on their scoped goals. It’s a powerful headline. But it’s also led a lot of people to draw the wrong conclusions.

When we look at a figure like that, we immediately start to imagine all of the diverse pitfalls and barriers that have prevented those organisations from making their transformation vision a reality. What we don’t do is question the most important part of the statistic — the goals themselves.

If the scoped goals in question are unrealistic, overly ambitious, unfocused or otherwise not practically attainable or relevant to the core of the organisation, they were never going to be achieved in the first place.

So much discourse revolves around the transformation process and breaking down the barriers to effective transformation. But the fact is, if we set more focused and relevant goals that the organisation was truly motivated to achieve, we’d all be a lot better at achieving them.

By focusing organisations on the core of what they really need — the customer and employee-centric non-negotiable outcomes of a transformation — the model is helping to move the needle on goal setting.

It’s the difference between setting a reasonably abstract goal like ‘increasing customer engagement’ and one that’s highly specific like ‘halving the time it takes customers to transact through our app'. The second is aligned to both specific digital capabilities and a tangible customer outcome, making it both easier and more desirable to achieve.

Reaching a state of continuous transformation

It’s the precision and specificity of the DFM that makes it such a valuable tool for organisations facing economic uncertainty today. By uncovering the specific capabilities teams need to invest in, the model can then help them:

• set highly specific goals that are aligned with customer and employee needs, delivering the things people on both sides really want from the business in times of crisis and change;
• shorten transformation cycles by focusing on individual capabilities and narrow value cases;
• put their limited resources where they’re likely to deliver the best return and start driving big outcomes from smaller, more iterative transformations.
   

By cutting cycle times, aligning teams around specific value-based outcomes and supporting iterative evolution, the DFM can help organisations not just manage continuous change — but embrace it.

Whether it’s economic recession, supply chain disruption or another global pandemic, the mindset that digital fluency enables can help organisations respond precisely to whatever change comes next. And the next big change after that.

When a crisis strikes, they’re able to quickly identify how conditions have shifted, what people need from them as a result and the capabilities required to deliver that. Together, that makes them exceptionally agile and adaptive — exactly what they’ll need to be to thrive as the next waves of economic and operational disruption emerge.

Image credit: iStock.com/metamorworks