The Pivot

Whitsons learned that firsthand. When the company began the DOM journey, its initial thinking was to distribute school food service processing at the ground level. Each elementary school would take its own inventories and place its own meal orders electronically on a tablet, says CFO Beth Bunster.

A small-scale test proved otherwise. There was some resistance from school food service personnel who weren't used to doing daily electronic input. It wasn't realistic either to assume they could do it because many of these people were older and not necessarily adapters of technology.

It was like the square peg in the round hole. As a result, Whitsons, with its agility mindset, shelved the ground-level approach and found a different way to get the needed information into the system the same day.

Concept versus Application

Though the test sample netted solid results for Whitsons, even when something works on a small scale in a controlled environment, that doesn't always mean smooth or successful adaptation company-wide.

Again, consider Whitsons. Early on conceptually almost everyone in the company liked the idea of streamlining processes and combining siloed systems into a platform ecosystem. But, says CEO Paul Whitcomb, different departments had different perspectives and different, sometimes competing, struggles ensued.

The nutrition group at corporate, for example, wanted complete control over its part of the process to ensure compliance with the extensive rules and regulations associated with institutional food and food delivery. But realistically that's not always possible in the field where unexpected variables abound. One day a vendor might not show up at a school, forcing implementation of a backup plan, or perhaps someone vomited in the school cafeteria, prompting its closure. Those unplanned events can upset schedules and preplanning and require a quick pivot instead. That pivot calls for ground-level, not corporate, decision-making.

On-the-Ground Wisdom

That ground-level feedback is essential, not only with the journey to digital maturity, but in the context of developing a company culture primed for innovation and growth. After all, the experience is what matters today.

“The people who do the work are the ones who know what's best,” says Ari Asher, of Global Furniture Group. “You just need to listen and make people believe that when you say things can get better, you mean it. Bring your ideas and let's talk about them; let's identify what we need to fix, and we will fix it together. It's not about talking; it's about doing; it's about deliverables, and it's about timelines, responsibility, and accountability. It's a team job. No one can do it on his own.”

In the Right Direction

The company had to get its system up and running now and didn't have the luxury of starting over as a first step. So, as a temporary solution, ACS minimally reengineered the system for the Cloud.

Then, the company set out to identify the real problems and design ACS 2.0—a modernized, updated, and upgraded system that could incrementally fold parts of the legacy system into the new system and help the company move forward.

Like many companies, a big part of ACS's problems stemmed from a lack of interest or expertise in IT. As a carpet installation company, management always assumed it didn't need an information technology department or specialist on staff. They figured, why spend much money on IT, and they definitely didn't have a long-term vision for the use of digital. At the time, the company was still using an outdated and unsupported operating system.

Typical Troubles

All that is typical of many smaller companies no matter the business or the industry. These businesses marginalize IT instead of recognizing its importance in building their companies to operate smoothly today and into the future. Only when a company understands the importance of IT can it learn to leverage its existing operations—explore/exploit—and move forward on the digital journey.

And as also is typical at most companies no matter their size, the various digital systems that ACS did have—like finance, inventory management, and invoicing—didn't talk to one another. They were purchased piecemeal and cobbled together.

Suddenly, amid the pandemic and forced to work remotely with its broken system, this company—as is typical with many others—realized it had to become digitally savvy to survive. It was a wake-up to the realization of disrupt or be disrupted. ACS had to identify its strengths and weaknesses, what worked and what didn't, and what it needed today and tomorrow to be successful—an assessment of As Is and To Be in terms of the business and technology.

Pathway Forward

ACS could then begin to develop a road map for the future. That step-by-step implementation guide mapped out incremental, achievable, and measurable goals on the digital journey. The assessment also is an opportunity for the company to look ahead and consider the (im)possibilities. That includes building in services and conveniences internally and externally to surpass the competition and disrupt the industry.

The small company was willing to take the lead. Now it's showing the big box stores how the job can and should be done. And, it's growing exponentially in the process. The company is doing all that with much of its legacy system, though it's been modernized.

The Right Staff

ACS started its journey by hiring the right person in the right seat so its system modernization would not fail. That meant bringing in a chief digital officer, a specialist in IT and business who understands both the technology and the business aspects of operations. That person in turn knows what's trying to be accomplished and how, and can work to bring together ideas and people and develop a common IT vision for the company's future.

Without that commonality of vision, a company wastes valuable time and energy trying to modernize its operations and systems. The result is something few people, if any, use. Or worse, the company could keep flailing without a viable and dependable system and eventually fail.

The right people in the right seat in the right structure includes the right staffing. Your people must be willing to change; we've talked about that throughout this book. We've also discussed how many older generations aren't as tech-savvy or have as technology-oriented a perspective as their younger counterparts. That's not a criticism of older generations. It's instead about individual relevance and frames of reference. Unfortunately, there's no secret formula how to convert the naysayers.

To those people who continue to reject the DOM transformation, Whitsons' Whitcomb points out that digital isn't a fad as much as an evolution. This isn't something that is going to slow down. Reality is that without embracing digital, companies face a slow decline that they don't realize until it's too late.

Remember Nokia? The once-thriving cell phone maker is a great example of what happens when a company ignores innovation and change until it's too late. The company went from selling hundreds of millions of cell phones annually to irrelevance in the market.¹

Not Always an Individual Choice

When someone is forced outside their comfort zone, expect some degree of confusion. That's not necessarily the fault of the individual either. Beyond the challenge of dealing with something new, end users often find out by accident that things have changed. You visit a supplier's website only to find out there's an entirely new ordering system. Or, employees know the transfer to the new system is happening over the weekend, but when they arrive Monday morning, it's office chaos because no one can find anything.

Companies regularly fail to introduce change with the end user in mind. Nobody spends enough time and money training and incentivizing others to learn the new system. Again, that applies to employees as well as customers. We've all experienced personally or heard the grumblings about the new system and not enough or no training. It's trial by error or on-the-job training, neither of which is adequate.

Acceptance—and therefore training—is a huge part of introducing anything new. One great way to do that is to utilize champions. These are individuals who thrive on change and can quickly embrace what's new, learn about it, and then teach others.

Cross-training also is helpful. When people see the new process or system in action end to end they often are more accepting because with the big picture, it becomes easier to recognize and understand the benefits.

Accepting change also should be built into a company's culture. That way when it happens, it's not a big deal and people accept it more easily. We noted earlier how Marc Adee built that into the new culture at Crum & Forster.

But keep in mind that consumers like easy and convenient, and when a change delivers both, often it is more quickly acceptable to users.

80/20 Approach

Quest Food Management successfully ushered in dramatic digital change with the help of what its CEO Nicholas Saccaro calls the 80/20 rule. Instead of requiring his people to overnight fully embrace all aspects of the business platform model, he and his teams asked their people, “What are 20% of the features of any of these new technology tools that will allow you to be 80% better at your job?”

Saccaro took that approach, he says, because in the face of the pandemic, overnight, schools closed and things changed. People were afraid to go to work; they were afraid for their health and for their children's health. Adding to those fears, many of his people weren't technology-savvy.

“We really tried to dial back from a usage-of-the-tool standpoint because adoption was slowly growing,” says Saccaro. “We said, ‘Instead of worrying about being an expert in all areas of the platform, we want you to focus on the two most important parts of this platform that are really going to drive the efficiency of your operations and your ability to plan well for the next however many months.’”

That streamlining of the learning curve combined with very focused and ramped-up levels of digital, video training, and other ongoing interactions with managers and employees made a difference. The company even adopted a platform that enabled them to text every employee in the organization for messaging from the organization, what's going on, training, and more.

“Within two to three months we probably got to a place where utilizing these tools became more second nature than feeling like it was a big disruption from what our prior lives looked like,” says Saccaro. “It really is pretty remarkable how quickly our folks adapted, particularly considering we were coming from the Stone Age in a lot of ways.”

Incentivize Acceptance

Bringing in change managers also can help businesses encourage adoption of change. These managers work with human resource departments to create incentives to encourage staffers who are change adverse or confused by changes to adopt whatever is new. Without that type of encouragement and adoption people will claim the new system is too complex—even though it's much easier—and often revert back to the older, cumbersome ways.

It's also important to incentivize and work with customers to make sure they understand any new changes or systems. Too often customers gripe that a company sends them a new system but doesn't provide adequate training. That training should be figured into the cost of doing business, especially today in our highly competitive marketplaces.

Strategic Fit

Too many organizations overly focus on technology features and functions at the expense of strategic fit, says Ian Worden, who has worked with a number of companies on their digital journeys.

Instead, digital journeys should be grounded in company strategies with the digital journey an enabler and extension of those strategies. Strategic alignment and the associated measures of success also should be clearly defined upfront. Otherwise, any ambiguity in company strategy can bleed into digital strategies and limit the power of what a business platform can accomplish, he adds.

Once technology vendors are at the table, there is a propensity for the digital solution to take on a life of its own. Teams become myopically enamored with the technology's bells and whistles and further lose sight of the alignment between company strategy and the value of the business platform.

Too often and in the end, teams declare victory on launching the business platform—standing up the platform in tech jargon—but soon are disappointed when they realize company strategy and the platform aren't aligned. Says Worden, “Hindsight has taught me that spending adequate time up-front to understand the company strategy and the expectations around how the digital platform will serve the strategy is critical. It is essential to understand what metrics are expected to go up or down as a result of the digital platform and establish the relationship between strategy and platform. A clear cause-and-effect understanding is necessary to ensure that the digital strategy and platform are developed in a manner that ensures the highest possible strategy/platform fit.”

HHS

Bobby Floyd, HHS CEO, agrees on the importance of spending time to identify the real problems up front. His company has had excellent success with the digital operating model. However, Floyd says he might do things slightly differently in hindsight.

“If I was talking to myself from five years ago, I think I might say spend more time on the front end, scoping the problem out, [determining] what is the root problem, and then piloting more. In the effort of trying to be fast, I think we've failed fast but should go a bit slower.”

The company spread its resources too thin to the detriment of some of its other problems, Floyd adds. “If we would have had a better up-front scope and pilot process, we probably would have pivoted and done something else.”

Floyd also suggests that it's important for companies to early on determine the elements of how to measure success in terms of bringing in new technologies. There will be changes along the way on the digital journey, but understand the parameters for success first.

Whitsons

Whitsons' Beth Bunster suggests reining in the creative process early. The creative process gets lots of people to open their minds to the possibilities and that's great, she says. But going down too many roads at once can dilute efforts and waste time and money with no end in sight.

If she and Whitsons had to go through digital transformation again, Bunster says she would “put a box around the creative process” before moving forward. Start out with the big picture and the vision, but then “skinny it down” and concentrate efforts on fewer fixes at once.

Something else Bunster says she learned about software is that when implementing an idea, a team tends to look at something and say, let's add this or this, and tries to morph the processes into the set box. “You have to be open to entirely new ways to do things. Open your mind and don't try to recreate exactly what you're doing now.”

Paul Whitcomb offers his own hindsight advice. “If I had to do it again…I think we would want to find a way to move [the transformation] at a much faster pace. Business changes and your needs evolve from when you started, so faster to market is better.”

Whitcomb also says that from an innovation standpoint, he would involve more people in the experimental trial phase. That way those individuals get involved early on and can become champions with any future rollout company-wide.

Crum & Forster

Gary McGeddy of Crum & Forster's Accident and Health division agrees on the importance of getting your people on board to foster success. But, he says, there's no perfect recipe to digital transformation success. “It's not like we're baking a pie where the recipe stipulates exact amounts of ingredients.”

Instead, especially with a traditional company like C&F that's multifaceted, there are lots of working parts. The transition isn't overnight or all at once, he adds.

Plus, he says, no matter what the goals or the industry, or the company, the biggest challenge is always the people. It's not the money or the investment or the time. “It's the resistance of Homo sapiens to change. They're insecure. They like the way things have been done. They resist change because they are insecure.”

On the other hand, McGeddy says, if he were setting out on the digital journey at a startup company, he would pay particular attention to hiring. “I wouldn't hire people with legacy mindsets. I would attract talent that was forward-thinking, that had the vision of the future, and who recognize where things need to go. But that's utopia.”

Global Gate Capital

Rudy Sayegh of Switzerland-based Global Gate Capital takes right hiring even further. He says the best thing his company did when it came to its digital journey was hire an outside agency to help build a road map. The agency helped identify the internal communications gaps and all the existing processes.

Beyond the assessment, Sayegh also encourages companies to bring in a champion to drive the innovation internally. And do it early in the process. Global Gate hired a chief operating officer so that it then had two designated teams—one to secure the assessment and another to interact with the company's business partners during the transformation.

The latter is especially important for a company with mostly young people used to adopting new technology. In that situation, the challenges are not about technology adoption, but rather mapping the technology with existing business processes.

Says Sayegh, “The best way to facilitate that acceptance is if we can clearly define the business process and then map out the new business process into the technology platforms so it's easier to adopt.”

Breakwater Treatment & Wellness

Breakwater Treatment & Wellness, the New Jersey–based cannabis products and services company, is relatively new to the DOM journey. But it's definitely committed to it.

The company opted to go digital because, says its President Andrew Zaleski, “We were at the point that internally we had grown frustrated with where we were as a company digitally. We knew there was more we could do to safeguard and utilize technology, but we didn't have the time to research or know what made the most sense to spend time on.”

The company brought in a third party to help with the transition, and it wasn't an overnight process either. Change is a process—a journey that takes strides forwards and backwards. “You learn along the way and the journey doesn't stop,” say Zaleski.

His advice to others: “Each company and team is different. You need to be ready to dedicate time and energy to this process and, as with many things, there is never a good time. But you need to make time. Understand your team to prepare for who will be able to speak to each aspect of the business and processes. You can learn a lot from all levels of the company so be inclusive of those who are on the frontlines and those managing processes.”

It's exciting to see the possibilities in the future, says Zaleski.

Global Furniture Group

Like so many other executives whose companies are on the DOM journey, Ari Asher offers this advice: move faster. “If you move, you make mistakes, you course correct, and you continue.”

Some in the company, he says, were slower, initially, to accept that it needed to change and then to actually change. “But if it was completely up to me and I was the only decision-maker, then I would press even harder.”

“I also believe that the solutions lie within the problems in most cases. The solutions can be found within the teams, processes, the experience we already have…”

The Cash Excuse

Forget the excuse that a company can't afford to strive for digital maturity. “You have to embrace it,” says Whitsons' Whitcomb. “It's not a luxury, it's a requirement.”

And, yes, it's always going to be a financial push, he says. It was for his company, too. “The reality of it in this day and age, you really can't afford not do it because if you don't, you may not realize it [now], but your company is on the decline. Even if sales are climbing, as an organization you're going to be on the decline because you just won't be able to compete; you won't be able to move into the future.”

Top Buy-in

Also, high-level executives may sign off on a project but then choose to not get involved in its implementation. That's one of the reasons a decade ago the United Kingdom's initiative to bring shared services to higher education failed, according to Steve Butcher, the British education leader. A leader who simply says, “Go make it happen,” isn't enough.

At the time of the attempted change, the top leaders wanted it, but as the project was passed down to various levels in the university system it went nowhere slowly, adds Paul Hopkins, the IT specialist. And it was eventually scrapped.

At the other end of the spectrum, transformation has been extremely successful at the University of West London (UWL) because, as Adrian Ellison pointed out, the school's vice chancellor buys into the importance of IT and the quest for digital maturity.

Important Protections

That's especially important today with rampant ransomware and other malware. One coffee company, unsure about digital in its future, was forced to scramble after a ransomware attack ended up costing the company the $20,000 paid to its attackers.

The company had to pay up to protect its and its customers' data. Following the attack, the company decided to upgrade and modernize its system and now has multiple layers of protection as well as a strong firewall and a defined security policy that limits access.

Think of your data and your system like your home. You don't give your house key to everyone and you don't give system and data access to everyone. Conversely you don't go away for the weekend with your front door wide-open. Companies shouldn't do the same when it comes to their data and systems.

Privacy Complexities

Increasingly, companies and customers recognize that the ownership and security of data is an important part of the digital business model. That's not just in terms of who can access what data, but for what specific purpose, too. After all, among the advantages of a business platform ecosystem is the ability to analyze and leverage data in real time.

But, as mentioned earlier, even though many younger generation consumers relinquish their data all the time via social media, its usage and privacy issues remain a gray area. In the healthcare field, for example, a health plan or provider may have captured customer consent for data usage; however, how the data is manipulated as it relates to data ownership isn't always clear, says Worden. “There was a time when you could de-identify data, scramble, and mix it up to create data outcomes. Today, however, we are obligated to build new software solutions that utilize synthetic data. Then all data is perfect to your specs and that's not how data comes in.”

Some other things to consider when it comes to system and data security include:

• The importance of multi-factor authentication. It's essential, not only at the user level, but also at the system level. When a user is profiled in the system, what is their level of access and why? That should be spelled out in detail.
• Continuous system vulnerability. No matter any product or organization's assurances, no system is 100% secure. How is your company protected from ransomware?
• Backup protection. Almost every company has some type of system backup, but is yours enough? It should be thorough, frequent enough to meet your company's needs, and easily accessible.