According to industry estimates, roughly 80% of digital initiatives ultimately fail. The reasons for these failures-to-launch abound: a risk-fearing culture, the paralysis of shifting regulations, the bog of legacy systems, and the list goes on. Nothing, however, will kill a digital transformation effort more assuredly than the failure to define a purpose. Simply put, without a meaningful reason for being, digital initiatives cannot succeed.

Many digital initiatives today, however, are conducted as side experiments or prototypes, are focused on incremental enhancements to a user experience, aren’t scalable or don’t address significant problems related to broken processes. Perhaps the business is increasing self-service mechanisms or boosting digital marketing outreach – worthy goals, but do they really move the goal posts for the business or even for society?   

When it comes to defining a purpose in today’s digital age, it’s hard to get too grandiose. Facebook’s latest mission statement, after all, includes the goal of “bringing the world closer together,” while Dropbox wants to “simplify life for people around the world,” and Tesla aims to “accelerate the world’s transition to sustainable transport.” 

A pizza delivered by a drone, in other words, is – in the hands of Domino’s Pizza – part of a bigger purpose to be “the best pizza delivery company in the world.” The company aims to make it nearly effortless to order a pizza, whether just by opening an app and not clicking on anything, or tweeting a pizza emoji. So far, so good; Domino’s reported strong growth in 2016, both in the U.S. and globally.

Then there’s Deutsche Telekom. Faced with changing customer behaviors and an altered competitive landscape, the German telecom giant is rethinking what it means to be a communications provider. Fulfilling its defined purpose of being “a trusted companion in an increasingly complex digital world” and “making life easier for people while also enriching it,” DT is reinventing the customer experience at its retail stores; applying AI-driven chatbots to provide better customer service; and investing 80 million in innovation overall. In 2016, DT realized substantial increases in net revenue and exceeded its earnings targets.

Defining Digital that Matters

Even when a purpose is defined, too many are narrow in scope or short-sighted in their ultimate goal. For digital investments to pay off, companies would do well to consider focusing on how they could move the needle on a system, process or experience that hasn’t been improved in decades – areas where digital could yield not a 2X but a 10X improvement. How could governments reduce the stress and tedium of filling out tax forms? How could healthcare providers streamline the dreaded visit to the ER? How could airlines speed the seemingly infinite wait to pass through airport security?

While the purpose needs to be big-minded, the execution can start small. In fact, once the purpose is established, the business is then free to burrow into a targeted area that’s acutely in need of change, and let one disruption lead to another. Examples include financial services providers extending banking services through digital to the unbanked, and healthcare providers serving patients in remote areas or their homes through telemedicine.

Key Tenets of Success

The most honorable purpose in the world, in fact, is only as good as the business’s ability to execute on it. That often requires fundamental changes in traditional processes, approaches and mindsets. The key tenets of successfully implementing a digital program include the following:

  • Design, pilot, launch, iterate: Because digital means change, program execution needs to accommodate plenty of room for learning and correcting. Leaders need to make teams comfortable with presenting “quick and dirty” prototypes and reversing direction on previously committed solution designs. Businesses need to compress their prototype development time to four weeks or less to allow enough time for user validation and solution socialization to secure funding approval.
  • No big bangs – think MVP. In a market economy that’s both fast-moving and uncertain, businesses need to think like a war general: have an end goal in sight, and use broad outlines to get there. Translated into business terms, this means getting comfortable with the idea of going to market with a minimum viable product (MVP). Strong leadership and deep expertise are required to identify the most critical value proposition to test in the real world and, when necessary, pivot to a different approach if the first release fails.
  • Foster open ecosystems. One of the most disruptive things about digital is that business ecosystems have become more complex and interconnected. Digital businesses need to collaborate with multiple external partners, welcoming them into their previously closed systems and infrastructures through open application programming interfaces (API). One of our clients offers loans on consumer durables purchased on Amazon after the product is added to the basket. Isn’t that a much better customer experience than taking out a loan on one website and making a purchase on another? Regulatory change such as the Revised Payment Service Directive in Europe are helping to turn the tide of data sharing, further accelerating the need to design for open ecosystems.
  • Redefine failure: Digital techniques have reduced the cost of testing out ideas in the market and rolling out only when the response is positive. Because of that, leaders need to encourage teams to push the envelope so that mistakes are made. Doing so accelerates the learning curve and amplifies creative firepower. For example, A/B testing is a safe and low-cost way for marketers to determine the optimal time in the customer purchasing journey to ask for contact details without losing the customer. The results can be further refined by segmenting the tests by customer profile.
  • Make all parts of the business customer-centric: With the increased customer outreach of digital technologies, every part of the organization needs to see itself as directly impacting the customer. This mentality extends to teams that might have previously considered themselves internally focused, such as operations. Rather than limiting performance measurement to metrics like operational efficiency, for example, even these groups need to reframe their boundaries and align their goals with revenue increases. By doing so, the business will realize the full potential of digital.

Thinking Big, Working Small – and Quickly

The journey to digital requires thinking big and executing in fast, surgical strikes. It requires innovating with purpose while delivering results for the business. All of this is possible for businesses that set their sights on a digital future purpose and enable themselves to make course changes all along the way.    

Shashidhar Bhat, Senior Director, Digital Transformation, Cognizant Digital Business, contributed to this blog.

Lester Lam

Lester Lam

Lester is Vice-President and leader for Digital Strategy, Cognizant Digital Business.  Lester’s practice helps Cognizant’s clients become digitally relevant and enables them... Read more