The promise-and the agony of digital transformation for legacy companies

There was a time, not so long ago that the notion of the Internet was as foreign to businesses as living on Mars is to us currently. However, slowly but surely, companies began seeing not only the practical application of the technology, but its critical necessity for a competitive edge and survival. And, the rest, as they say is history that changed the world forever.

This type of global altering shift in societies used to take place every few decades or more, but in today’s environment of radical speed and the growing frequency of innovation in every imaginable field companies are left scrambling to keep up with what comes next.

One such shift on the horizon is undoubtedly the need for legacy companies to transition toward a new digital structure. Better known as digital transformation, the once arcane term is quickly becoming synonymous with business survival and gaining a competitive edge. Sounds familiar?

However, unlike the Internet which required businesses to create a website and overtime master the science of online marketing and Search Engine Optimization, digital transformation’s price of admission and timeline is much steeper than its predecessor. Adding insult to injury, not everyone interprets the digital transformation journey the same. Some companies view digital transformation as leveraging the growing arsenal of digital tools available to access customers and deliver products and services from their core business. Others, however, are leveraging the changing nature of the market to incorporate new ways of working, enhance the customer experience and redefine their sector entirely through business model innovation.

Two facts seem clear. The first is that digital transformation holds the promise of making companies nimbler, faster, data and customer-driven and able to deliver services and products at scale in a dynamic and hybrid environment (virtual and physical). In other words, the companies who successfully leverage the full breadth of digital transformation will emerge as the Intelligent Organizations of the future.

The second fact is that digital transformation is extremely hard to do for most legacy companies. The success rate of those who have crossed the “chasm” is dismal at best with 1 out of 8 getting transformation right.  According to Forbes Magazine, close to 84% of the major Fortune 500 companies fail at digital transformation. And, this rate of failure is creating both frustration and skepticism on the part of executives tasked with changing their organization for the future.

Digital Transformation (DX), like the Industrial Revolution brings with it new tools, new ideas and new ways of doing things. However, unlike its predecessor the compression of time required to get it right diminishes with each passing year. Nimble competitors and giant behemoths like Amazon are innovating at breakneck speed and moving into a variety of sectors like an invading swarm. It’s okay to be frustrated and even stumped by digital transformation, but what companies can no longer do is stand still.

So how do companies tackle this critical jump in an evolutionary market? Start with the basic infrastructure and drivers of digital transformation:

Digital Transformation is first and foremost about people

The biggest stumble and misconception that companies make about DX is to assume that it is all about the technology and the platforms. Implementing technology, although daunting is most likely the easiest part of your DX  journey. The most challenging barrier is by far the mindset of your people who may be resistant to change. Leadership can scream at their top of their lungs about needing to change, but if employees, and especially management doesn’t buy-in, there is 90% chance that the initiative will fail. Therefore, the first step of any DX journey is to be clear about the reasons for change; engage the leadership behind the vision and the tactical steps, and finally communicate the destination to everyone and allowing all voices to give feedback. At the heart of all DX is change management.

Let DX prove itself in the trenches

Most legacy companies once they embark on the DX path  begin scaling immediately and attempt to bring everyone along at the same time. This is a surefire way to lose that battle. At best you may end up with a few departments being successful while others struggle to find their way. At worse you can have a complete failure of the change process and lose people’s faith and trust in any future initiatives. The best DX initiatives begin in one department or two and take their time to showcase the data and  results. Once people begin to see the benefits of the new processes, then they will avail themselves to the new approach willingly and without much convincing. As they say show don’t tell. People will buy in the process once they see with their own eyes how it benefits them and their team in the long run.

Culture rules all DX strategies

Organizational culture is where the best laid plans come to die. No mater how well thought out your DX  strategy, it will eventually meet with your organizational culture face-to-face and nine times out of ten will lose if the latter is too rigid or siloed to change. Most legacy companies develop strong norms and cultural mores over time that become the very identity of the organization. Leaders and employees alike closely identify themselves with the way things are done and will often resist even unconsciously any deviation from the norm. At this juncture, it is important to understand that you cannot just simply do away with cultural expectations, but simply learn which sacred cows to do away with first and then gradually remove others as the DX strategy takes hold. It is very important to understand that culture plays a pivotal role in a successful change management process and misreading it or underestimating its importance will cost you the success you seek.

 Master the basic ingredients

There are some basic rules to implementing a DX strategy successfully. Although many companies define DX differently, it is important to understand what it is and what it is not. DX is not just about technology or platforms.  DX incorporates innovation, data,  clients as well as employees.  There is a simple equation that can help you understand where your focus should be in a DX strategy:

(Accelerator) (Operational DNA)  (Data) (CX /EX)

T(IP)2 = Technology + Innovation + Insights + People



The T(IP)2  Equation is a simple way of focusing on the critical aspects of the digital transformation journey. These drivers are present in all organizations undertaking this process but learning how to bring them into balance and executing on them successfully is where most organizations fail. By gaining a clear understanding of how each element works to bring about a successful DX outcome is critical for success.

Digital Transformation is the future for every organization eventually and learning how to implement it successfully should be the number one objective of every organization today.  DX is the natural progression of the evolutionary market, but only those who learn to adapt to its requirements successfully will inherit its bounty. Begin the journey, and fail successfully on your way to growth.

Are you thinking about how to get started with Digital Transformation (DX) to help you with growth?

 Find out how Gilead Sanders can help you create and execute on your Digital Transformation (DX) strategy by contacting us for a free consultation.