Strategy
How to measure digital transformation: Rightshifting to product thinking
February 6, 2018
Louis Georgiou
In the current fast-paced climate of digital empowerment, many marketing leaders are looking to achieve increased customer empathy (by understanding the broader customer journey and experience so they can improve engagement and optimisation) and organisational change (to ensure that digital skills and working methods within the business remain customer-relevant).
This often leads to the decision to undertake a large programme of digital transformation. The concept of digital transformation is nothing new; in fact, for many successful businesses, it's how they have always worked. In essence, what many businesses are looking to achieve with digital transformation is Rightshifting. The phrase was coined by Bob Marshall in 2008, and has since spawned a Rightshifting movement of collaborators and practitioners.
Rightshifting‚ describes the journey or transition many organisations are looking to make in pursuit of effectiveness, measured by high productivity and low waste.
The consequences of ineffectiveness are damaging to the sustainability of that organisation‚ according to Bob Marshall's research, the majority of organisations spend up to eighty per cent of their resources (time, people, effort, money) on what is classed as non-value-adding activities (waste); that's four days out of every working week wasted across the whole organisation.
Naturally with decreasing waste comes increasing productivity, but this alone isn't the prize you're working towards; the overall success is measured against whether the organisation is able to achieve its business goals and deliver against its vision. This is the true measure of effectiveness.
For more information on the journey to effectiveness, see "In the pursuit of effectiveness" by Ian Carroll. In this article, framed around building digital products, Ian describes effectiveness as the intersection of three questions: Are we building the right thing? Are we building it in the right way? Are we building it fast enough?
Many organisations don't monitor their levels of effectiveness; productivity and waste are not key metrics for the business and so poor performance in this area often isn't identified until it begins to affect the top line. So often, organisations will go to market when they are at the tipping point‚; they are aware that they need a change and are shopping for digital transformation. In reality, they're looking for help to get over the Wall of Pain‚ and change the culture of their organisations.
The one thing all effective organisations have in common is a product mindset.
A product mindset is a commitment to delivering outcomes for a business and its customers, continually, in order to deliver maximum long-term value. It is a move away from short term project thinking which is has an over-emphasis on delivering ‚things' that may have little customer or business value. The characteristics and behaviours a digital transformation programme looks to nurture are the attributes of native digital businesses who are inherently agile and use product thinking to achieve customer and business success.
The organisations looking to undergo digital transformation are in essence ready to cross the Wall of Pain‚ and become a customer-centric, agile business, where the product thinkers operate.
This list of businesses they seek to join are, of course, heavily populated with Silicon Valley-based tech companies, but this process is much more widely adopted than that.
On our doorstep in Manchester, there are many businesses for whom digital products and platforms are critical to their customer offering. Examples include the BBC, Autotrader, Money Supermarket, LateRooms, etc.
You might also be thinking these are all huge, well-funded organisations who have the freedom and financial support to be 'customer-first' and digitally savvy. But there are also hundreds, maybe thousands of tech start-ups and UK businesses who could join the list, who have a product mindset out of necessity to stay solvent, and fully understand the link between customer satisfaction (for product adoption) and business value.
So, whether you call it digital transformation or organisational effectiveness, it's a shift to the right that we need to focus on‚ and Product Thinking is how we can achieve that.
