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The Gunter Group Podcast
From Legacy to Innovation: Digital Transformation Essentials with Matt Bader
Too many companies are stuck doing business with customers using methods that are long expired. Because of the rapid rate of technological change and influence on everyday interactions, customers have come to expect more of companies with their digital experiences. Digital Transformation is “An intentional, coordinated, and consistent effort to move an organization from its current state to an aspirational future state by digitally innovating their customer experience and business model to achieve strategic outcomes.” It’s not a matter of “IF”, but “WHEN” and “HOW”. In this episode we discuss organizational maturity, transformation readiness, and key points along the Digital Transformation journey.
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Welcome to Thoughtful Action, Tangible Results, Bettering Your Business, a podcast from the Gunter Group. Here, we believe that every business decision has the power to spark transformative business change. We're not just about theories. We deep dive into strategic issues that impact organizations. Thank you for joining us today as we explore critical topics in the business world. Our goal, to arm you with actionable steps to deliver real business results.
SPEAKER_02:I'm Nate Ferguson, senior consultant with the Gunter Group. And with me today is Matt Bader, partner and digital transformation expert at the Gunter Group. Thanks for joining us today to hear about our perspective, approach and insights into digital transformation. Matt, welcome to the show. Thanks, Nate. Thanks for having me. Matt, we're glad that you're here. But before we dive into our topic, can you tell us a bit about yourself and why we're here talking about digital transformation?
SPEAKER_01:Yep. So I guess to start, maybe I'll go, I'll go way back to the early days. Because it does tie to kind of my career path and where I ended up today. So originally, like my first passion as I think about like my quote unquote professional career was really in the pursuit of athletics. So I was passionate about hockey. I played ice hockey growing up and from a very early age knew that's what I wanted to do and pursue into college and potentially beyond. Long story short, I pursued that path. I enjoyed a lot of successes and failures and ultimately ended up getting recruited to play at the Air Force Academy. And so, you know, of through the pursuit of sport ended up, uh, in a military institution where, you know, I was really focused both, uh, intentionally and by the environment that I was placed into, uh, on leading and just challenging and ambiguous environments. Uh, and that's really where I started to pursue that, uh, that, that discipline a little bit more intentionally through the path that hockey had taken me on, uh, enjoyed, uh, playing hockey there for four years, pursuing my education i served as a two-time captain of that team uh but then eventually that that path of hockey uh pivoted right because i eventually had to serve a military commitment after graduation so that first chapter of my life uh you know really investing my passion pursuing athletics building leadership and teamwork through those experiences pivoted to uh to a military environment so i served as an officer for five and a half years in the air force uh I spent some time as a contracting officer on the East Coast and did a little time in the Middle East before my wife and I eventually decided that it was time to kind of transition from the military and settle down and start a family. So we moved back to the Portland area and met Mike Gunter about the time that he was founding the Gunter Group. So I was one of the first employees, have been doing management consulting, which is kind of my latest chapter in my professional journey. ever since. And, you know, why I'm here talking about transformation and more specifically digital, you know, I've done a lot of things at the Gunter Group or TGG over the last 13 years. But kind of my sweet spot, and frankly, the sweet spot of much of our firm is really helping organizations work through their most critical initiatives. And a lot of those are when change is hard, right? And how do you get an organization to both mobilize around the fact that they need to change or want to change? How do you bring an entire organization through a new way of working? So we refer to transformation, a lot within the firm, and a lot of our clients, frankly, engage us for support on big transformation efforts. And, you know, I think everyone sees over the last number of years that digital transformation has been very prominent in the minds of of leaders for a number of reasons that I think we'll talk about today.
SPEAKER_02:Yeah, that's great. Thanks for sharing a bit about your background, how you got here, and a bit about our firm. We've got a few really critical topics to dive into today. So first, we're going to share a little bit about TGG's perspective and definition of digital transformation, including its importance to your business, assessing the readiness, and where to start. Next, we'll discuss some key questions paired with practical recommendations, like how to use our digital transformation starter kit. So Matt, let's get started. Our first question is what is so important about digital transformation?
SPEAKER_01:Well, I think the first thing is we should really align on what digital transformation means and how do we at TGG think about it and how do we try and talk about that with our client base. So TGG's definition, I'm just going to read this briefly, is an intentional, coordinated, and consistent effort to move an organization from its current state to an aspirational future state by digitally innovating their customer experience And the business model to achieve strategic outcomes. So I know that's, that's a lot to take in. But I think for me, there's a couple core elements associated with that definition that are super important. So first and foremost, one, you have to define an aspirational future state for your business, and you have to continually and intentionally be moving towards that, that future state. So it's kind of that continuous improvement mindset, right? What is the aspirational vision of what we want this organization to be? And then how do we continually move towards that goal over time? I think the second component is really that you're leveraging digital technologies and innovation, not just for technology's sake, but to improve the customer experience, right? What are the customer outcomes for your organization? And then how do those also improve the business outcomes for your organization and the strategic outcomes that you've set for your team?
SPEAKER_02:Yeah. And with that definition, I can't help but think of the digital transformation imperative. And so now that we understand what it is, help us
SPEAKER_01:understand why is it so important then? Why is it, you know, one of the most commonly discussed terms in business these days, but also one of the most misunderstood, right? And I think what we're seeing is, you know, the pace of change for business and for organizations, the agility that people have to have to best serve their customers, to respond to different market forces, that pace of change is rapid these days. And, you know, the technological innovation, the digital innovation that we're seeing, the tools, the things that are available to every organization and accessible to every organization of every shape, size and scale is pretty incredible. And so what you're seeing is that is influencing customers expectations across industries, across business segments. A great example would be, you know, the experience that you have on Spotify influencing how you think about your Alaska Airlines boarding experience, right? You know, we're serving clients across industries. It's not just the technology native organizations anymore that have to be thinking digitally. It's the insurance companies of the world, right? It's the government agencies of the world. You know, we've supported local city governments in digitizing You know, they're permitting experience, right? These are some of the most blue collar folks, inspectors and construction workers now expecting a digital experience from their local city government. So that's an example, maybe in practice of how we think about the digital transformation imperative. If you are a leader, if you have responsibility for a function, an organization, a set of teams, and you're serving somebody, which is every business, every nonprofit, every government entity, then you should be thinking about digital transformation in some form or fashion.
SPEAKER_02:Yeah, with all these factors from customer expectations, their needs, their wants, as well as the pace of change with what our competitors are going on or market dynamics, sounds like a lot of complicating factors. And so I think one of the great things that we've come up with is this digital transformation starter kit. So just talk a little bit about that before we move on to the next question.
SPEAKER_01:Yeah. So, you know, assuming that you buy into what we're saying, which is the digital transformation imperative is real, you should be thinking about how digital innovation impacts your organization. You know, we tried to step back and be like, well, if I was a leader, how would I make sense of this imperative? How would I start to think about within my area of responsibility or my scope of influence? transforming my organization digitally, both for my customers, but also for the business outcomes that I'm trying to drive or the strategic outcomes I'm trying to drive for my organization. So we created a starter kit that really tries to give some high level context with data, like how is the world changing? Why is digital transformation imperative. And then we tried to set the stage for how you should be thinking about about both assessing where your organization is at and making progress to make it better over time. So I'm sure we'll dig into that more throughout this conversation. But we tried to make it an informative but easy and practical read. And at the end, we also included some real tools that you can use from the second you finish the read to both align your organization on what you're trying to do and assess where you're at and where you're going.
SPEAKER_02:Yeah. And if folks are feeling a bit overwhelmed with how this might apply to their world and their business or their function, if they're a leader or they're thinking about strategy. This is something that can be an exciting thing for an organization. It's not just changing the customer's experience and maybe the way that you did business, but it can have some real impacts on the organization. So tell us a little bit. I can tell there's some excitement in your voice, having lived through this a couple of times and have been thinking about this for quite a while as a leader here at TGG. So what excites you about that?
SPEAKER_01:I think the thing that excites me the most about where we're at with digital transformation and how ubiquitous it's becoming across different industries and organizations and teams and is just the potential that it represents both for customers and customers and for organizations to improve their own business. I think those that know me well, it's like I do have a creative bent to the way that I engage with the world, whether that be music or things like that. And I think there's a creativity that's inherent in the potential that lives with digital transformation that's really exciting. You don't have to be the world's leading expert on digital or technologies. You don't need to be the CEO of a fortune 100 company to affect really, really positive change for your customers and your organization. And there is, I think what we're seeing with our clients, and certainly how we're trying to influence those organizations positively is There is a way of executing against digital transformation initiatives over time that really empower the organization to get creative at the team level to solve problems in a really, really exciting way.
SPEAKER_02:Yeah, that's really cool. And it sounds like maybe there's a momentum factor here. Once you get started and you can get going. So share with us an example of one of those successes after having built some momentum, maybe taking the plunge, jumping off the deep end, whatever you want to say with maybe tackling something as daunting as digital transformation. But share an example of one of those positive experiences.
SPEAKER_01:Yeah, for sure. So, you know, maybe a good, simple example for folks to kind of trace this through in real tangible terms. You know, our organizations worked across a number of industries, but an example that comes to mind for me, you know, we've served, you know, clients in the education industry and, you know, obviously, you you know, prospective families looking for care for their kids are going to engage digitally with an organization, right? They're looking for information about the best place to get care for their particular child. And one of our clients, you know, had an experience that as a person starts to move from inquiring about, you know, care for their kid and into an enrollment, so, you know, transacting information through digital means to enroll their child in the service So, you know, in a real practical sense, let me engage with you as a business. There were some real like customer experience barriers, right? Simple things like moving to a digital portal that frankly didn't represent or look like the organization's front end experience when people are inquiring about care. So, you know, people getting confused. Am I even engaging with the same organization as the one that I inquired about? And obviously that has implications on just their overall experience and trust and consideration as a provider for care for their kids. So, you know, seeing that organization kind of reorganize, focus their teams around the digital experience And then how that experience translates to the actual physical care for, for their customers, kids, uh, it was incredible, right? So seeing it come from a pretty negative experience and then teams really focused on visioning what an ideal experience would look like, breaking that down into discrete features and releases that they could pilot and test with customers over time made a tremendous impact on the folks they're trying to serve. Now, the other side of the coin, back to our definition at the beginning, you know, there's the customer-facing goals, there's also the, the business goals of the organization. And, you know, the improvements in those experiences can, can really have real direct business implications on things like, you know, consideration and conversion and, and frankly, profitability for the organization. So, so that's where that like, kind of excitement and the creativity that, you know, the rubber meets the road back to the definition we talked about at the beginning. It's continuously improving that digital experience over time for both customers and the business.
SPEAKER_02:Yeah, absolutely. When you were sharing that example, that future state that you have to envision, right, means new work in new ways. And the reorganizing the teams and the different approach to innovation in that example that you shared really highlights that for me. So thanks for doing that. So thinking about some of the other clients we've worked with in digital transformation, what are some of the, one of the biggest hangups or misconceptions organizations have or experience with digital transformation? Where do they get stuck?
SPEAKER_01:Yeah, I think I would answer this question in a couple ways. I think like, you know, maybe a meta misconception, if you will. I'll start there. And then maybe I'll give you some more tangible examples of common misconceptions we see. But like the meta misconception is that just because you have a desire to do digital transformation, or you've put it on your strategic plan, or you've made, you know, a financial and a resource investment, from your organization into that. People think that the desire and the investment alone is enough to make them successful. And, you know, our research shows and research that we see, you know, online shows that roughly like 70% of digital transformation efforts fail to reach their original stated goals. And I think, you know, for some people that'll be surprising. I think for many people in consulting, it's actually not that surprising. It's fairly in line with big enterprise, you know, transformation efforts or change initiatives, right? This stuff is hard work, right? So the intention is good. It's a good first step, but it's not enough. And that's why, you know, at TGG, we think that folks fail because they don't put in the early work into what we call digital transformation readiness. They're not preparing the organization to undergo the a new way of working at scale, and they struggle, right? And they can make big investments and make little progress towards their original goals.
SPEAKER_02:Yeah, a different version of counting the costs and really checking if you have the intestinal fortitude, if you will, to undertake such a big and important sort of thing. And I think in the Digital Transformation Starter Kit, we get a little bit more detailed in talking about the common digital pitfalls. So check that out.
SPEAKER_01:One thing I did want to just bring up, Nate, is like we referenced this starter kit. You should definitely go download it. You know, there's a ton of information in there that's and visuals. It's a nice pairing to the conversation we're having today. You know, so I described kind of that high level misconception. We talked about digital transformation readiness. We give you some more detailed structure on what does readiness mean. And and for us, we we've kind of put together a model for folks to use in this starter kit. So if you're a leader being like, well, is my organization ready? You know, are we ready to do something, you know, of this magnitude and scope and scale in the digital space? Or maybe you're stuck, right? Your organization has technically been doing a project or program called digital transformation, but you're not seeing the outcomes materialize and you don't know why. Check out the digital transformation readiness model that we have in there and framework that we have. So, you know, it's really breaking the organization down into a couple of key capabilities that we would typically see in a high performing digital organization. So, you know, I'll share these briefly, but, you know, we have a domain called strategy, right? One called organization, process, technology, customer and culture. And it really helps you frame up and think about, you how well the organization is prepared in those different areas to undertake a digital transformation effort. Absolutely. I think
SPEAKER_02:it's something that can help folks go from talking the talk to walking the walk. And so if you're interested in checking out the digital transformation starter kit, go to guntergroup.com and search digital transformation. It'll be linked there along with some other materials we've had with thoughts that we shared or other experiences around digital transformation. But that's the best way to get it. Thanks for highlighting all those details, Matt.
SPEAKER_01:Nate, the other half of your question, I think that maybe I didn't jump to more, you know, in more detail is just what are the common like misconceptions that we see across industries and across clients? And I kind of hit on the overarching umbrella or that meta misconception. But, you know, I can give some, frankly, just common misconceptions that I'm sure many folks listening to this conversation might be familiar with. Yeah, let's do it. Let's hear it. So, you know, there's obviously a list of common misconceptions in our digital transformation starter kit. You should check it out and see if there are any of these like that resonate with you and your current organization or what you've seen in a past life. I'll just highlight a couple just for the sake of the conversation. So one I alluded to at the beginning, which is just treating digital differently. as a project. So we see this a lot, right? Companies realize their digital experience and how they leverage digital innovation to further their business isn't where they want it to be. They're leaving opportunity on the table. They throw it on a strategic plan or a roadmap. They slap a dollar value and an accountable leader against it. And everyone in the organization looks at that person and their teams and says, OK, are we done? And this is something that we come across a lot. And it's a big mindset shift for some organizations. But the companies that we see or the organizations we see that really are doing digital the right way, they're They're treating it like continuous improvement initiative. It is a different way of working. It's a commitment to innovating digitally over time to serve the customers and the business in the right way. It's not a one and done project where you check the box and, you know, roll out the mission accomplished banner and call it good.
SPEAKER_02:Right. Maintenance mode won't cut it for this sort of thing. Right. It's a new way of embracing doing work. Maybe that means some new cultural things as well as some new practical things. So thanks for highlighting that one. Is there any others
SPEAKER_01:you want to share before we move on to the last portion of the discussion? came from a different organization and this is how we've always done it. They treat digital as. The point is that the technological tools that underlie it, which couldn't be farther from the truth. And that's really why we tried to hit that definition hard early in this conversation. It is ultimately about that commitment to improving customer outcomes and business outcomes continuously over time. Technology is part of the way that you get there, but it should not be the focus of.
SPEAKER_02:Yeah, it strikes me that this is a highly collaborative thing. It's not just for one group or one team, but can cut across large portions of the organization, partnerships with other groups that may not have had good relationships before or whatever else. So it's quite a broad thing.
SPEAKER_01:Yep. Yeah. And then, you know, another one that comes to mind is we call this corporate trench warfare, right? So, you know, often we come into organizations to try and help with digital initiatives. And the unfortunate reality that we've run into, you know, in many cases is you have business stakeholders and IT stakeholders sitting across the trench, pointing fingers, and frankly, blaming each other on the lack of progress that they're making towards their digital goals. goals or their business goals. And... I won't get too deep into explaining why we think that is. I think in some cases, it's more about a structural problem within the organization and just a philosophical divide in the way that people think about tackling that problem based on where they sit on the teams. And we've found you can be very successful in being thoughtful about how you structure teams to tackle digital problems. you can be very successful in bringing folks together through common experiences, trainings, common goals, and really cut down those barriers and get people focused on what's really important, which is driving the outcomes.
SPEAKER_02:Yeah, those are super interesting insights. And I can imagine over the years, some of those were hard lessons to learn, you know, but I'm glad we've been able to distill them into this perspective to share with folks.
UNKNOWN:Yeah.
SPEAKER_02:Leading into the last question for this portion of the discussion, folks may be thinking about, gee, I understand what digital transformation is and a little bit of the ups and downs and what the opportunity is, and maybe that's exciting. And so what's your recommendation for folks who think that digital transformation may be something their organization needs to think about or rethink about, or someone's org who is stuck and is struggling with adapting with all of that? Where would you tell them to start?
SPEAKER_01:My biggest piece of advice to leaders who are thinking about affecting change through digital transformation is start within your span of control. Don't feel like you either have no control or influence on moving your organization forward. And don't be on the other end of the spectrum thinking that the entire weight of the organization is on your shoulders. You know, we discussed this briefly at the beginning, but, you know, every team, Every function, every division, every company within a suite of companies, they are serving customers. And it could be some combination of internal or external customers. How you leverage digital technologies to improve that experience and improve the outcomes for your organization, there is opportunity there. to affect change in a positive way there. And I would say start within your span of control. I would also recommend to download our starter kit. I know that's a little self-promotion, but I really do think that it gives you an excellent tool to get your head around how to think about digital transformation, how to think about readiness for the organization. And you can use it as a very practical tool to start aligning folks on your team, to conceptually bring leaders together on the same page with what needs to be done. And frankly, with that continuous improvement mindset, you can start to chip away. It doesn't have to be this massive enterprise initiative where you align everybody out the gate. You can make an influence change within your span of control.
SPEAKER_02:You're thinking back to something you said earlier about the Yeah. The answer is yesterday.
SPEAKER_01:No, I think, um, Yeah, I think the time is now. Like I said, if you focus on your span of control and you really get practical with how you're making progress for your customers and your business function, you can always start today. We've actually seen a lot of leaders do this regularly. obviously for their customers and their teams, but also to further their own careers, right? It's a way to expand the influence and the impact you can have within an organization. It's a way to collaborate with peers and other leaders across the organization. And frankly, it's the way to galvanize change, right? within organizations that sometimes can get stagnant, not by any intention, but through scope, scale, and growth that makes it more complex to move the needle for customers over time.
SPEAKER_02:Yeah, so it's not a matter of if, but when your organization and how you do adapt and engage with customers in this way and maybe think differently about the world. Thanks for walking us through all that, Matt. I appreciate the depth that you've gone into in some of these questions. To sort of summarize some of the key points that we covered or some of the takeaways, what are those three bullets to leave us with today?
SPEAKER_01:So put most simply, like digital transformation is an imperative. If you're not thinking about it, you should. So that's first and foremost, start to educate yourself on what it is and what it means for your organization and your teams. I think the second thing is invest in readiness for the organization. Too many organizations, teams, functions, leaders, leaders, You know, they're chasing the concept of digital transformation without putting in the work to ready the organization to do it successfully. These change initiatives are about people at the end of the day. And navigating people through change is hard. Put in the work to ready the organization to do a digital transformation effort. And last but not least, I think. You know, these things are always imperfect. They're hard. We've seen these types of efforts transpire over years at multiple organizations and multiple industries. Expect that it's going to be difficult. Expect that it's not going to play out in the exact way that you wish or hoped it would. But also expect that. The people and the teams that are aligned to the vision for what this could be are going to surprise you. They're going to deliver exciting new digital experiences for customers in ways that you could have never mapped out from the beginning. So embrace both sides of the coin. Embrace the imperfection of large enterprise transformation initiatives and focus on continuous improvement over time for both your customers and your business.
SPEAKER_02:Well, Matt, thanks for walking us through all that. I've had a great time introducing you to our audience and getting to know more about digital transformation. I hope this has been illuminating to our audience as much as it has been for me. And with that, from Matt Bader, I'm Nate Ferguson. Talk to you next time.
SPEAKER_00:This has been thoughtful action, tangible results presented by the Gunter Group. To discover how the Gunter Group can help your organization maximize its potential, visit guntergroup.com. Thanks for listening. And don't forget to subscribe on your favorite podcast platform to stay updated on our latest content.
