July 25, 2019

Digital Transformation for COOs

Terri White

Topic:   Analytics

You can’t transform what you are if you don’t transform what you do.

In some ways, the Chief Operations Officer has the hardest part of any digital transformation. A CEO can tell people how they need to make the transition in broad terms; a CFO can show how financials are affected and where the company is on its path; they both direct the “what you are” aspect.

The COO, though? She directs the “what you do”.

The tumultuous details of operational processes, ongoing change management, and cultural alignment all fall under, or are affected by, her decisions and actions. Using her usual tools of people, process, and technology, she needs to forge the engine that drives the company to its new goals.

Not easy.

And it’s made harder by the fact that she can’t just impose the needed processes and technologies on company employees. Any new processes are inherently dynamic, and COOs ignore that fact at their own peril.

A recent Forrester webcast about “getting practical” with digital transformation featured Allen Bonde, VP and Research Director. He said, “Many businesses are failing at large-scale big-bang transformation,” indicating that operations was part of the problem. “People have to focus more on moving transformation efforts to innovation efforts. And they need to figure out how to do this to improve everyday processes.”

Makes sense, right? As your company transforms from what it was to what you want it to be, you need constant innovation to make it do what you want it to do.

In fact, you probably need constant innovation just to know what you might want it to do.

This isn’t just a technological problem. While process automation is important, it’s even more important that the people and processes in the company are adapting to change — and not just the changes going on now, but the ongoing change and culture of change that you’re trying to create. People are at the heart of your company, so they have to be at the heart of your digital transformation.

This all falls well within the wheelhouse of a COO, and can make or break his efforts.

As Bonde says, “We see operational improvement really moving up the charts, as people look to not only invest in new technology but also look at ways to tune up their digital experience stack…. At the same time, they’ve got to make sure that they’re providing the cultural reinforcement that we have to build this for constant change.”

How can a COO do all of that? Here are some critical elements. If you’ve read my previous posts, you won’t be surprised to see that data and analytics are key elements of them all.

  • Getting visceral through storytelling. People aren’t data-driven so much as emotion-driven. They become data-driven, however, when the data tells them a story: gives them something to get excited about, gives them the “telling details” that show them how they’re being affected, and so on. I went into some detail about this in my skeptic’s perspective on digital transformation.
  • Benchmarking. Andrew Carnegie is said to have placed the total steel production for each line on a big board where everyone could see it. This sparked competition among the production lines in a simple way that kept everyone pushing forward to do their best. With digital transformation you need the same advantage (higher productivity), but also want to make sure employees are targeting the right metrics — even though the specific targets might change from day to day. Widely distributed or highly visible dashboards that include benchmarks can help keep employees aligned and productive.
  • Showing the product that you’re selling. Companies undergoing digital transformation generally are obtaining new data and packaging up existing data to create new products. When your employees see how the data is being packaged, used, and shared, they become more engaged with the company and feel more personally responsible for its products.
  • Showing the benefits to the customers. If you’re going to focus on creating a culture of change, your employees will want to know that it’s not change for its own sake. Showing customer metrics — satisfaction, social media sentiment, return rates, and so on — will help your employees get to know your customers better even when they don’t engage with them, and help them embrace the need for positive change when it comes. 

In a previous post, I talked about data and analytics being the heart of digital transformation. I said that you need more than a vague “I want to be a butterfly!” vision. To transition from chrysalis to butterfly, “Every cell and protein of that chrysalis [had to know] what the goal was, and understood every single individual action that needed to happen to achieve it. If any part of the transformation took longer than it was supposed to, or only half-achieved its goals, no butterfly would break free at the end.”

COOs guide every “cell and protein” of their transforming companies, while also guiding customers along the transformation journey (remember, digital transformation means customer transformation).

The data and analytics needed can be pretty intense. But when vision and execution come together, that’s where trusted data and actionable analytics are most critical — and where the COO makes his or her mark.