The other half of the digital transformation alphabet

From my previous article in Analytics, we learned the A-J alphabet for digital transformation success. Now, we will attempt to apply the other approximate half of the alphabet K-Z for organizational success in digital transformation.

K is for knowledge. We all know the hierarchy from data to information to knowledge to wisdom. Knowledge is making information actionable. We can talk about different types of knowledge: shallow and deep knowledge, procedural and declarative knowledge, episodic knowledge, heuristic knowledge, etc. Be sure you are capturing and applying the experiential knowledge, along with the book/formal knowledge, in your decisions. For digital transformation, be sure to look at your business processes, business model, domain, and cultural/organizational issues.

L is for leadership. Most studies indicate that the really good leaders have emotional intelligence (EI). This refers to having empathy for their colleagues and empowering them to do their jobs. EI accounts for nearly 90% of what distinguishes high performers from peers with similar technical skills and knowledge [1]. Research indicates that good leaders can be made; however, others believe it’s a combination of nature and nurture. Don’t forget about what makes good followership too.

M is for metrics. The old adage is that you can’t manage what you can’t measure. Metrics are so important in determining whether you are making progress. Think about quick wins and pilot projects before going full-scale and have an appropriate set of metrics to measure how the projects have been. The use of dashboards could be very helpful in visualizing your metrics or KPIs. For digital transformation, Overby [2] indicates three key metrics: operational improvement, customer experience and financial impact.

N is for niche. What makes you different? What is the market niche that differentiates your organization from others? In today’s competitive global marketplace, having a market niche is critical. According to Castrillon at Forbes [3], there are five steps to find your perfect niche market: 1) Do some soul-searching; 2) Survey your target market; 3) Research the competition; 4) Assess potential profitability; and 5) Test your idea.

O is for optimization. Think about using prescriptive analytics. We all know the types of analytics, from descriptive, diagnostic, predictive to prescriptive. Try to take advantage of optimization approaches for aiding in your decision-making process. Some people, like Newman [4], predict that the future of data analytics is prescriptive analytics, particularly prescriptive analytics as a service.

P is for prediction. Use predictive analytics. Many organizations are using predictive analytics to help guide them for the future. Even in today’s coronavirus pandemic, the state of New York has been using five computer models to predict the spread of the virus. Gartner [5] predicts that augmented analytics will be a dominant driver of new purchases of analytics and business intelligence.

Q is for quality. Try to achieve the highest standards possible. We have seen the various quality movements – total quality management, total quality leadership, quality circles, 360 evaluations, and the like. Take the best from your quality techniques and apply them religiously in your organization. The Malcolm Baldrige National Quality Award looks at seven criteria: leadership, strategy, customers, measurement/analysis/knowledge management, workforce, operations and results.

R is for reliability. Simply put, will one get the same values if the measurements are repeated? Rockwell Automation has been giving seminars looking at “Improved Maintenance and Reliability Through Digital Transformation.” According to Veazie [6], “High reliability organizations (HROs) are organizations that achieve safety, quality and efficiency goals by employing five central principles: 1. sensitivity to operations, 2. reluctance to simplify, 3. preoccupation with failure, 4. deference to expertise, and 5. practicing resilience.”

S is for searchability. Hopefully, findability will come, too. Past studies have shown that the average individual can’t locate up to 40%-60% of the information they need. Organization of the information or knowledge base for ease of searching and retrieving is an important aspect for making effective and efficient decisions.

T is for tractability. This refers to a problem that can be easily handled, managed and controlled. A tradeoff exists with optimality and tractability, as explained by Cohn [7] at MIT: “Many transportation models share a common problem: they are too large to solve in a fully integrated fashion, but the decisions are too interconnected to fully decouple. Therefore, the challenge is how to break the problem into separate, tractable pieces that yield a feasible and high-quality solution. If the subproblems are too large, the model will not be solvable. If they are too small, solution quality will be poor, and infeasibilities may result.”

U is for unionization. Think about the union of business intelligence, competitive intelligence and knowledge management. Business intelligence generally refers to the field of analytics, from an internal perspective. Competitive intelligence is the knowledge that you learn about your competitors – an external perspective. Knowledge management is how best to leverage knowledge internally and externally.

V is for value. What are the value-added benefits that your digital transformation initiatives are providing? How can the digital transformation improve your value proposition? According to the MIT Center for Digital Transformation [8], companies that have implemented a powerful digital transformation strategy are 26% more profitable than those that don’t.

W is for wonderment. Get people excited. Celebrate the successes first, and then any bittersweet stories (or failures). Encourage innovation and creativity, and don’t try to micromanage.

X is for X-factor. What is the special sauce that your organization has? Some organizations have talked about talent, empathy, culture, customer experience or organizational effectiveness as example X-factors of digital transformation. What is yours?

Y is for youth. Give the Millennials a chance. One government organization allowed the “younger generation” representative to have an equal vote with all the middle and senior-level managers/executives at their decision table.

Z is for Zeus. Don’t think you are God. There is an old saying – “Man plans, God laughs.” Even though you may prepare in advance and try to anticipate aberrations in the marketplace, it may not always work.

If organizations think of the alphabet in terms of their digital transformation, they may be better prepared to be successful. Of course, you may have your own special alphabet for digital transformation enlightenment, but hopefully this will be a start.

References

1. Landry, L., 2019, “Why Emotional Intelligence is Important in Leadership,” Harvard Business School “Business Insights Online,” April 3.
2. Overby, S., 2017, “3 Digital Transformation Metrics that Work for Everyone,” CMO.com/Adobe, https://cmo.adobe.com/articles/2017/9/3-digital-transformation-metrics-that-work-for-everyone.html#gs.2e40ls.
3. Castrillon, C., 2019, “5 Steps to Find Your Perfect Niche Market,” Forbes, https://www.forbes.com/sites/carolinecastrillon/2019/03/17/5-steps-to-find-your-perfect-niche-market/#2e3669ffc39f, March 17.
4. Newman, D., 2020, “Why the Future of Data Analytics is Prescriptive Analytics,” CMO Network/Forbes, https://www.forbes.com/sites/danielnewman/2020/01/02/why-the-future-of-data-analytics-is-prescriptive-analytics/#5a3b6a0e6598, Jan. 2.
5. Gartner (S. Moore), 2019, “Gartner Top 10 Data and Analytics Trends,” https://www.gartner.com/smarterwithgartner/gartner-top-10-data-analytics-trends/, Nov. 5.
6. Veazie, S., K. Peterson, and D. Bourne, 2019, “Evidence Brief: Implementation of High Reliability Organization Principles,” Dept. of Veterans Affairs (U.S.), Washington, D.C., May.
7. Cohn, A.M., 2003, “Making the Trade-Off Between Optimality and Tractability When Solving Large Transportation Models: A Case Study Based on the Airline Industry,” MIT, https://ocw.mit.edu/courses/civil-and-environmental-engineering/1-224j-carrier-systems-fall-2003/readings/readings6.pdf, Oct. 28.
8. MIT Center for Digital Transformation, 2014, MIT Sloan Executive Education Blog: “The Digital Business Transformation Imperative,” https://executive.mit.edu/blog/the-digital-business-transformation-imperative#.XRGRe7zYrnE.