3 key lessons from businesses on the front lines of digital transformation

August 3, 2022, 12:00 PM UTC
PepsiCo chief growth officer Parth Raval.
Michael Faas—Fortune

It feels odd to talk about digital transformation in 2022, when smartphones and smartwatches are all around us, and talk of the “metaverse” is in the air.

But at many corporations, important processes and functions remain stuck in the past, detached from the data and connectivity tools that power modern business. The cost of these outmoded routines shows up in everything from internal inefficiencies to sluggish product development. 

And yet, replacing established patterns at the workplace with new technology is a thorny task that continues to challenge even the most well-run organizations. At Fortune’s Brainstorm Tech conference in Aspen in July, business leaders on the front lines of corporate digital transformation efforts shared hard-earned insights and notes from the field.  

Here are some of the key takeaways from the free-flowing, candid discussion moderated by Fortune senior writer Phil Wahba.

1. Make building blocks, not silos

Parth Raval, chief growth officer at PepsiCo, says that the company has completely reinvented its approach to creating and using new tech tools. 

“Historically when we would go develop a digital tool or solution, it would be very siloed; it would be the sales guys looking for a solution or the supply-chain team looking for something,” Raval says. 

About two years ago, PepsiCo created a “growth office” that brings together people with skills and perspectives from different parts of the company. The idea, he says, is to think about how the technology can fit into the business in an “end-to-end” fashion, providing an open framework that could be used in the future by other parts of the business.

MuleSoft CEO Brent Hayward echoes the sentiment, describing the importance of thinking beyond the “here and now” when embarking on the initial phase of a new technology project. 

“The most successful companies start with this mindset of ‘We have to design for the future of our organization; we need building blocks and capabilities to do that technically,’” Hayward says.

2. Make it easy to use

No matter how much better a new digital tool is, if it’s not easy or convenient to use, employees will continue to do things the old way. 

Much of the software that corporations build in-house is not designed with the end user in mind, says Bushel CEO Jake Joraanstad. Corporate tools are often plagued by lousy user interfaces and ill-conceived requirements. For example, Joraanstad says, some in-house software he’s seen requires that the employee be in the office, on a VPN and desktop computer, in order to use it.

At a time of pervasive mobile technology, that is a major flaw, Joraanstad says.

“It’s 2022, and we’re still not designing for a tool that will work on their iPad or their iPhone,” he says.

The result of such poorly designed software, Joraanstad says, is that in many companies only a tiny subset of employees end up using the new technology. 

“Why would you build it in the first place if less than 10% of the people are using the tool,” he says.

3. Understand employees’ fears and get their buy-in

There’s another word for “transformation,” says Sounding Board CEO Christine Tao—it’s called change.

“And change is inherently hard for people,” she says.

Putting in the effort to understand what the mindset is among different groups of employees, and what fears might be making them resistant to change, is crucial, Tao says. With a better understanding of employees’ motivations, fears, and priorities, managers can do a better job explaining the opportunities that the change will bring. 

At a large company like Johnson & Johnson, which has 144,000 employees, getting buy-in throughout the organization is vital, says its enterprise chief information officer, Jim Swanson. 

“If it’s just a tech group doing it, you’re never going to realize the revenue or business outcome that you’re looking for,” he says. 

The path to success lies in getting everyone on board. That means making the case to colleagues that things like data science and automation will lead to real business benefits, and that applying technology wisely can actually “reimagine your business models” rather than just “incrementally improve them.”

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