Digital Transformation: Q&A with David Stephens

Throughout his career, David Stephens has served in a wide range of C-suite and senior advisory positions, and has developed a reputation for “moving businesses into the future.” During his time multiple high-performing organizations, including hibu, Ascend Learning, Wolters Kluwer, Thomson, and McKinsey, he honed his ability to lead successful digital transformations across a broad set of contexts. Leveraging his experience and knowledge of digital growth drivers, offshoring, and outsourcing solutions, David has achieved success leading turnarounds and business transformations at an international scale.

We were able to catch up with Mr. Stephens and hear his thoughts on digital transformation.

Q: What are key areas businesses can focus on when it comes to digital transformation and why is digital transformation critical to business today?

A: There are many facets of digital transformation to consider, but I’d like to focus on four key areas where companies have an opportunity to improve. The first of these areas is products and services, and I’ll use publishing companies as an example. 20 years ago, publishing companies sold paper products and books. Today, due to digitalization within the industry, they sell online services, data, software, and even predictive analytics. The industry is able to offer new products, new services, and higher value to customers, and successful companies are able to enhance whatever they are selling, by employing new and innovative digital capabilities.

In addition to reshaping an organization’s product and service offerings, an effective digital strategy can aid in attracting and retaining customers. This commonly emerges in the form of digital sales and marketing. Again, if you wind back the clock 20 or 30 years, advertising took the form of newspapers, telephone calls, and occasionally some broadcast media. In the new economy, everyone, regardless of size or scope, is able to sell and market digitally. Today’s landscape is comprised of Google searches and advertising through a host of social media outlets and channels. Digital offers us new ways to connect with customers, which can be more effective while costing less.

The third key transformation area is customer service and experience, I’ll use the example of interactive voice response (IVR). In recent history, customers called a business and were often prompted to navigate through a complicated menu, listening to various options available to them, and pressing a series of numbers before hopefully being directed to the right person. Today, there are sophisticated IVR technologies that employ artificial intelligence to listen to and understand a customer’s needs. In some cases, callers don’t even recognize that they are speaking to a machine. Using digital makes connecting with and speaking to customers, understanding their questions and needs, and providing truly meaningful and fulfilling service, cost-effective and efficient.

Finally, I’ll touch on production and manufacturing. This is simply whatever it is a business is creating and delivering to its customers. Digital enables organizations to capture and analyze large volumes of data, helping to drive efficiencies, such as reduced inventory levels. This ultimately leady to ongoing cost optimization and improved reliability. Mining and consuming data by leveraging digital capabilities enables meaningful advances in efficiency and agility.

Q: Whose commitment and participation within an organization is important to successful digital transformation?

A: Many people believe digital transformation is all about technology. They try to place responsibility with IT or another technology group, but ultimately fail to realize the benefits of a digital strategy. Digital transformation is not, in and of itself, technology. It is enabled by technology.

So, although it is cliché to say that it has to be driven from the top down, it does. A digital strategy has to be owned at the board and CEO levels and there needs to be company-wide buy-in. Often, digital is embraced in one department, and that department may make some degree of progress, but it isn’t optimal. Competitors will come along, deploy digital across the entire organization, and leave that company behind. The best businesses deploy digital technology broadly and fully, and create a culture where everyone lives, breathes, and thinks digital.

Q: Is digital transformation a destination or a journey?

A: It is absolutely a journey. You can think of it the same way that growth is a journey and improving profitability is a journey. When you believe you have digitally optimized everything, you will find that competitors will have done more, or there will be a new technology, or new social media channels, or new customer needs. There is always the opportunity and the need to push further.

It really is a treadmill that will never stop. So, if you hear a business say, ‘I have digitally transformed and I am done,’ they might do well today, but tomorrow, they will find themselves behind their competition. It is okay to set internal milestones, to break it down into digestible and achievable chunks, and then have a brief celebration, but you have got to hop back on the treadmill again tomorrow.

Q: What would you identify as the biggest obstacle to enterprises who want to go through a digital transformation? How do you recommend addressing these obstacles?

Inertia is the biggest barrier to digital transformation. Frequently I hear, ‘this is the way we do things, this has worked well in the past, and we don’t want to change.’ This cultural aversion to taking action and accepting change inhibits success.

Businesses can do a number of things to overcome these obstacles:

• Hiring young, new talent with different ways of communicating can help drive the change. Organizations can leverage this fresh perspective to develop social media efforts, for example.

• Sometimes, digital transformation involves cannibalizing what you have done in the past, such as accepting that it may be easier to help customers with remote rather than on-site support.

• Start listening to employees below middle management. Time and again, bright young people with new ideas are blocked by managers who think the old way is the best and only way.

• Absolutely listen to customers. Talk to your customers and understand what they really like and don’t like about the way you do business.

• Be a leader. Innovation never stops, new technologies and capabilities never stop, so get ahead of the game. Don’t allow your business to be a follower.

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