As per a recent report by McKinsey, 89% of major corporations worldwide are undergoing digital and AI transformations.
Unfortunately, these companies have managed to seize only 31% of the projected increase in revenue. This loss of ROI resulted only in a 25% reduction in costs. What is the reason for missing the mark on a digital transformation returned? How can your residential or commercial building company avoid the same fate?
Most companies need to understand what digital transformation means and how internal team alignment plays a role. For building professionals, successful digital transformation requires a personal and team-focused approach.
Salesforce defines DT as "...the process of using digital technologies to create new — or modify existing — business processes, culture, and customer experiences to meet changing business and market requirements. This reimagining of business in the digital age is digital transformation."
A digital transformation project is impactful even in the building industry's sometimes "old school" business model. Increasing internal team alignment during this process enables you to outperform your competitors.
The key to Salesforce's definition is the "reimagining of business." DT empowers companies to reimagine all aspects of their enterprise, from communication and operations to sales, marketing, and the customer experience. Every aspect of a business can be elevated and reimagined when DT matched with organizational change is orchestrated correctly. Creating back-off automation efficiencies is a great first step.
However, many companies must understand that DT only opens the door to new ways of doing and innovating. It does not, by itself, guarantee that what's possible becomes reality on the ground. What type of organizational change does DT entail, and why is it important?
CMS Wire explains why organizational change is vital for the success of digital transformation in any company: The key is to focus on people and their problem-solving approach, infrastructure, and technology.
Focusing on people and their problem-solving approach is essential for building professionals to succeed in digital transformation. Many organizations need to remember to address the cultural shift required to change the mindset of workers, without which any digital transformation project will succeed. Internal team alignment is a must.
Ultimately, DT is as much about people embracing a philosophy and cultural mindset as it is about adopting and integrating digital tools and processes within an organization. They are also known as internal team alignment.
Your residential or commercial building company's DT is ultimately about your team. How can you find new, more meaningful, efficient ways to connect?
To use DT effectively, building professionals must understand that it is a mindset, not just a technology solution. They should also create the right culture and make organizational changes to ensure the DT initiative achieves its goals.
Tip #1: Create or refine a broader business strategy
Before embarking on a DT journey, building professionals must have a robust and well-developed business strategy. Companies must understand their "form" or strategy before executing it differently.
This sounds simple, but many businesses jump into DT thinking that software and digital tools are a panacea, failing to realize that DT can only help if a company knows where it wants to go.
As quoted in Forbes, Andy Noronha, Director of Strategy & Thought Leadership at Cisco, emphasized the significance of understanding a business's trajectory before implementing a DT strategy: "We advocate that transformation leaders should spearhead the transformation process. According to the DBT Center, 'orchestrate' means 'mobilizing and enabling to achieve a desired effect.' Orchestrating encompasses activating diverse organizational resources by leveraging network capabilities to attain transformation objectives."
Two critical aspects of Noronha's take are relevant here. First, when practical, DT applies to the entire enterprise, i.e., "mobilize and enable different resources in an organization." Second, it seeks to achieve "a desired effect" and "transformation goals."
If your business hasn't established its desired effect or transformation goals, DT can't work.
Tip #2: Look inside: How's your internal team alignment?
Companies often focus on investing in software, technology, and consultants for technology transformation. However, they tend to overlook the significance of internal elements and resources.
Purchasing the right tools and leveraging outside experts has its place, but not at the expense of your staff. Your staff's deep understanding of your business is crucial for DT. Only when your staff fully adopts the DT culture and mindset can DT initiatives be successful.
DT is about building a digital culture. Your people drive this culture at all levels of the organization. If people feel alienated or threatened by DT, they're less likely to champion it and might even directly undermine it.
When waves of consultants crash through the door, and new gadgets and technologies are being tested out, employees can't help but feel threatened by a role change or even job loss. This will significantly affect your internal team alignment.
According to The Business of IT Blog, "Achieving buy-in from executives is only part of the process, however, as all employees must be also on board." The most successful initiatives experienced a complete culture shift in the company environment, ensuring all employees felt part of the change. Back-office automation to remove redundancies pushes your team to accept a digital transformation.
This can be done by redefining individuals' roles and responsibilities to align with a transformation's goals. This not only helps clarify the skills and roles the organization needs, but it also helps ensure employees are included in the process from the very beginning."
Businesses that want to transform need to look inside for expertise. When staff are asked to contribute or participate, they feel a sense of control and ownership over parts of the process. If leadership communicates the benefits of DT — flexibility, increased productivity, enhanced professional development, and financial health — teams will generally buy into the DT culture necessary for success.
Tip #3: Be audience-focused
Businesses must keep their eyes on the prize when executing a DT initiative. It's easy to lose sight of DT's primary goal when engaging in such a large and complex project.
What's the main overarching goal of DT? To better understand and more efficiently serve the needs of your customers and clients.
A business must always keep the customer and their experience top-of-mind when developing the business strategy that DT will amplify. Failure to understand your audience's needs and how they want to fill them renders DT moot.
As the Harvard Business Review post, "Digital Transformation is Not About Technology," eloquently puts it: "...if people lack the right mindset to change and the current organizational practices are flawed, DT will simply magnify those flaws."
Business operations must think from the outside in. Companies that engage DT but fall prey to narcissistic tendencies and myopic approaches forget that "The most important thing for customers is their own experience. So that experience should be the most important thing for your business... Customers continue to put enormous value on organizations to provide the right experience at the right time and have increasingly little patience for anything else," according to the Enginess Team.
Effective DT empowers a company to consistently deliver what customers need when they need it conveniently and painlessly. What's more, DT and the culture that makes it possible can adjust quickly when these needs and their delivery requirements suddenly change.
Tip #4: Embrace collaboration, agility, and flat teams
As noted earlier, DT touches every aspect of a business. It is, by nature, a cross-functional and multidisciplinary endeavor that requires broad expertise and agility. A culture that fosters collaboration and agility also requires a flat team structure that enables idea sharing, experimentation, and the ability to change tack quickly.
Traditional top-down hierarchies need to catch up with the pace of DT. If a flat team structure cannot be deployed company-wide, then creating a DT core team that's flat and agile is a great alternative. This will be what your organization needs.
In an interview with Inc. Brandview, Harvard's Chief Digital Officer, Perry Hewitt, stated, "Organizations often think there is a holy grail-one right answer for how to do digital... Identify small initiatives for experimentation and quick feedback. Planning is important, but organizations must work in shorter cycles with quick iterations."
The digital world moves fast, and your DT core team and organization need an environment that empowers them to keep pace, creating internal team alignment.
Digital Transformation requires a mindset and a culture that creates a whole more significant than the sum of its parts. DT is the nexus where people and technology meet to amplify meaningful connectivity via an integrated, enterprise-wide effort to meet the customers where they live on the terms of their choosing.
Amazon's Jeff Bezos once said, "In today's era of volatility, there is no other way but to reinvent. The only sustainable advantage you can have over others is agility, that's it. Because nothing else is sustainable, everything else you create, somebody else will replicate."
DT is the key to unlocking the possibilities of perpetual reinvention. However, building professionals must understand that DT is as much about people, culture, and business strategy as it is about digital tools and technology. This will require a culture shift for your business. A great place to start is your back-office automation.
"It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change." This sentiment remains profoundly relevant.
To succeed in the residential or commercial building industry, your building professionals must embrace digital transformation and align their teams in support. Start today by contacting Illumine8 for data-driven results.