Late last year, U.S. travelers witnessed the consequences of IT infrastructure and application stagnation. From December 21 through December 26, Southwest Airlines cancelled more than 70% of its flights, amounting to more than 2,500 cancellations. Amid peak holiday travel, Southwest's infrastructure point-to-point traveling system and legacy software, which teetered the lines of functionality for years, finally came crashing down. The company reported a loss of $220 million in the final three months of 2022 and estimates another $350 million impact in its first quarter of 2023—not to mention the loss of thousands of customers.
What can we learn from Southwest’s customer experience breakdown? First and foremost, innovation within infrastructure is essential in today's fast-paced market. Second, companies with legacy systems unwilling to adapt and modernize are subject to delivering unsatisfactory customer experience. Digital transformation is necessary for enterprises looking to implement agile processes to cement operational adaptability, increase time to market and delight customers.
However, digital transformation is no small task; just because a company decides it's time to evolve digitally doesn't mean it can successfully. According to a study from Pew Research Center, experts say the “New Normal” in 2025 will be far more tech-driven, presenting challenges for individuals and businesses as they try to get up to speed. The time to start the digital transformation process was yesterday.
Most business leaders are great at pointing out the problems and opportunities within their digital infrastructure but lack the knowledge and expertise to successfully implement changes. The role of the Chief Transformation Officer (CTO) is growing rapidly within businesses as progressive establishments look to bring in experts to help with their digital journeys. Other organizations have reached out to digital transformation consulting firms for guidance. Unfortunately, some digital transformation consulting firms lack experience and only offer canned solutions that don't mold to the unique needs of each business infrastructure.
Businesses are working in a down economy and are looking to digitally transform with tightened budgets, potentially hindering them from hiring a CTO or bringing in a consulting partner. For those organizations, there are still actions to take. Business leaders looking to lead successful digital transformation initiatives with novice transformation backgrounds should focus on these three steps:
1. Develop an organizational mindset open to growth and change
Successful digital transformation goes beyond tangible technologies. Before implementing any software, it's critical for companies to clearly define the intended outcomes of their transformation plan. Too often, businesses hastily take rip-and-replace approaches, replacing old technology with the latest tool on the market, without considering what success looks like.
These projects can leave companies in transformation limbo, not knowing when or how transformation goals are met. By setting clear digital transformation goals, organizations not only create an attainable outcome, but can better communicate the who, what, where, when, and why of the transformation to employees—the key to transformation success.
For any transformation to succeed, employers must cultivate a growth mindset within their work culture. Organisations on the precipice of digital change most likely have operational processes that have become habits of employees. These outdated habits often create a rigid mindset within employees. A fixed mindset negates creative expression because it creates a false sense of limitation in employees’ minds.
They believe they can't evolve to new technologies and often reject digital transformation efforts. That is why it is essential for businesses to first establish a culture with a growth mindset that encourages innovation, forward-thinking and experimentation. In doing so, thinking outside the box and taking on new challenges becomes second nature for employees. With a growth mindset, employees are equipped with the psychological toolkit and motivation to drive digital transformation efforts.
2. Learn the best way to measure success for the company
Measurements could and should be an ongoing discussion. While establishing digital transformation goals is essential to creating baselines and measurables, digital transformation is a continuous business process. Businesses should always ask two questions:
How will we know we've successfully executed our digital business strategy?
Where will we need to go next, and when will we know when to go?
By setting clear goals and asking how you can achieve those goals, employers can create smaller short-term goals within long-term goals. This, one, allows leaders to successfully measure progress and ensure digital journeys remain on track and, two, helps motivate employees and increase executive buy-in by making growth and achievements easily recognizable.
Executives who continuously ask themselves "where next, and when" will ensure that business transformation is never stagnant and digital goals are never too high or low to affect future opportunities. Executives will keep digital evolution on a constant upward trajectory by creating measurable, continuous, short and long-term digital transformation goals.
3. Discover the right tools to drive operations forward
Mechanics are what a company and its employees need to consider to make the desired outcomes of digital transformation a reality. Mechanics are the way work is organized, managed and executed with the help of different tools and project management systems. When it comes to digital transformation for businesses lacking expertise, a concept in learning theory known as scaffolding is a preferred and effective approach. Unlike rip-and-replace methods, scaffolding encourages teams to start simple and progress in complexity over time.
This approach is excellent for novice digital transformation executioners because it accommodates employee learning curves, trial and error with different technologies and a potential shift in transformation goals. The right mechanics for an organization are determined by continuous questioning and re-evaluation. Regular audits of operational processes are necessary to fully optimize new technology and identify opportunities to adjust processes around the technology for enhanced speed, flexibility and customer experience.
For businesses looking to implement effective digital change, but that lack the knowledge, expertise or budget, digital transformation is attainable with these three steps: establish a growth mindset within the company culture by encouraging forward thinking; set clear goals and define measurables to gauge progress; and implement a scaffolding approach to digital transformation efforts. Leaders already have the tools they need today to cultivate psychological and mechanical enablement to stay on the cutting edge of innovation—before their infrastructure stagnates and it’s too late.