Unveiling Your Organization's Digital Transformation Index

Often, when embarking on a project, especially for companies venturing into digital transformation or innovation for the first time, they ask us to assess their digital presence.

Honestly, it's a huge responsibility as a detailed diagnosis requires a deep understanding and interaction with the analyzed company.

However, in recent years, various systems and surveys promising a digital assessment based on a scale have emerged, making it seem trivial.

We're not questioning these systems; each has its merits. But we emphasize that digitalization goes beyond a numerical value.

To truly understand a company's digital status, it's essential:

A. Evaluation involves a diverse group, not just top management or IT/marketing. All departments and employees at all levels must participate.

B. Assessment should consider both current and desired future states, across different areas.

So, how do we do it? We trust the McKinsey Transformation Index (MTI) because:

a. It's globally recognized and adaptable to different company types.

b. It allows for dual focus on current and desired states.

c. It's free to analyze.

And this methodology is easy to explain, develop, and provides a very visual and understandable representation of the results.

This methodology that we use is called the MTI - McKinsey Transformation Index and analyzes 10 variables of the organization:

Variable #1: Performance - Under this variable, an analysis is carried out on how the organization's results are, if they meet the established expectations, without differentiating itself in the sector/market.

This is relevant because in any process of change, if we start from a situation with unstable company results, the process is much more likely to fail or constantly pivot. Likewise, based on these results, we can envision what type of transformation is feasible and what resources will be possible.

Variable #2: State of the organization - There is no transformation or digitalization process (it is a change process in itself) that can be carried out without a team that accompanies it, understands it, and sees its potential. For this, it is key to have a clear overview of the level of knowledge by areas, the level of motivation, alignment, and their capacity to work autonomously.

Variable #3: Talent and skills - With this variable, we delve into how talent is managed, if talent is comfortable and loyal, if we are a magnet for talent attraction or, on the contrary, we tend to have rotation and low attractiveness of talent that makes a difference.

We must understand that if we stick with comfortable talent, what will end up happening is that we will be an organization that generates "repetition" but not "evolution".

Variable #4: Customer experience - Customers (internal/external) are the reason for the existence of organizations. So, facing a transformation process, it is key to understand what type of relational model we have with them. Before launching to implement digital interaction channels and systems, it is essential to know where we are currently and, above all, what we want to offer and if as an organization we are capable of maintaining it.

Variable #5: Social and Environmental - Although it may seem like a topic unrelated to the level of digitalization, it is an aspect that is gaining more weight in organizations and that consumers value.

ESG beyond a responsibility is becoming a brand positioning lever. And yes, it is also affected by the digital transformation actions we develop because they have an impact - resources, energy consumption, employability,...

These first 5 variables give us a view of the current scenario of the company, and its good health is basic to face the desired scenario.

We are going to define the desired scenario through the following 5 variables:

Variable #6: Operational model - Through this analysis, we focus on whether we have processes, internal work methodologies, and how they are. Are we facing an agile scenario, with fluid communication, or do we have silos of knowledge, bureaucracy, very vertical structures,...?

Transformation processes require vision and decision, so it is important that there is and is identified who is responsible, but at the same time it is very important to have multi-functional teams and above all that there is a lot of communication and didactics.

All this, under an agile, flexible work paradigm, with the minimum paradigms that block us from being able to analyze different scenarios and approaches.

Variable #7: New business development - How do we approach new market opportunities? Are we a company that has a clear focus on innovation? Has our "core business" remained unchanged for years? Through this variable, we will analyze to what extent the organization analyzes markets, analyzes opportunities, is able to quantify them, and relates to its environment.

This will give us a vision of what openness and predisposition the company has to evolution and how it would be prepared for it in case it is forced inorganically.

Variable #8: Strategic decisions - It is analyzed how those critical decisions for the organization are made. That is, if there is a procedure, a criterion, a series of people involved in it.

This is relevant because in many organizations decisions are made by a very small group of people,

without a detailed analysis and without applying standardized procedures.

And obviously, when we talk about transforming, as we say "it implies breaking/altering much of what is established" and if the processes for this are not well established, the process becomes a real mess.

Variable #9: Advanced Analytics - It is one of the key points in any transformation/innovation process. The capacity and culture that we have for measuring and interpreting our actions.

At this point, knowledge is deepened on how data, its contextualization, and interpretation are part of the organization's culture. It is valued whether the organization is "data-driven" or "feeling-driven".

It is relevant to have this vision to understand how initiatives will be valued when implemented and require continuous adjustment.

It goes without saying that in the 21st century, those organizations that still operate under a "feeling-driven" mode will be at a clear disadvantage in optimizing their actions.

Variable #10: Digitalization and technology - Here we analyze the "hard" part of what we understand by technology. We analyze the tools that are available, how the decision is made in their implementation? And above all, how are they being used?

This is relevant because, as it is said before "before starting to run, you have to know how to walk" and it is difficult to address certain evolutionary processes without having internalized certain previous stages.

That is, it can be a limiting factor or an enabler of future projects.

Well, with these 10 variables, broken down into two blocks of 5, we will have a vision of the level of digitalization and predisposition to transformation of the organization.

As we have indicated, the first 5 variables show us our current situation - our day-to-day, and the second show us how open to change we are.

Thus, organizations with a low indicator in the first 5 variables - the recommendation before addressing change is to put internal order because otherwise, they will not be able to address a process of evolution consistently.

In the event that the second variables come out very high - it is a good indicator of predisposition to evolution, but beware! If we do it as we said, without the bases well established, it will be a highly chaotic process with low chances of success.

In this sense, the advisable thing is a balanced stage between present and future - the "poles" are never good, but evidently each case must be analyzed specifically taking into account the peculiarities of the organization and its environment.

If you are interested in knowing more about this methodology and how it can help you in the digitalization and transformation processes in your organizations, from The Brain Mixers, we will be happy to offer you a free introductory session. Just get in touch with us and we will be happy to explain more.

The important thing, as we say, is not the "number", but understanding how it is reached, what implications it has, if it is a homogeneous or polarized assessment, and above all how to remedy the weaknesses and maximize the value of the differentials.