Is Your Digital Transformation Headed for Trouble?
Seventy percent of digital transformations fall short of their objectives, often with profound consequences according to Boston Consulting Group. Digital leaders achieve earnings growth that is 1.8 times higher than digital laggards. Investors say that 50% of companies should invest more aggressively in digital capabilities and technologies. Yet with so much riding on the success of digital transformation, only 30% succeed.
No matter how experienced a leader you are, delivering fundamental change at scale and at the pace necessary to keep up with the market is difficult to execute. What if you could see if your digital transformation was headed for trouble before it failed? What if you could ensure that your initiative was in the 30% of successes, rather than the 70% of failures?
While nothing can guarantee success, there are a few signs to look out for that will help flip the odds.
You’re Trying to Avoid Discomfort
According to research by the Everest Group, around 68% of enterprises that started digital transformation initiatives have not achieved their expected results. Why? More than half point to resistance to change as a key obstacle.
No one likes change, but digital transformation can’t happen without it. And with change comes its cousins, thrash and disruption. It’s like when you start a new workout routine. At first, everything hurts and you wonder why you started. Then suddenly one day, all the hard exercises seem easy and what used to be your workout is your warmup. To quote my trainer, what doesn’t challenge you doesn’t change you.
Unfortunately, most of us get comfortable at work and we begin to resist both challenge and change. A few months ago, we were discussing employee experience. I used the example of a professional development approval process that was intended to retain employees, but actually ended up alienating them because the experience — which was cobbled together from already existing forms and processes — was so terrible. Changing the process, while making life easier for our employee, would likely irritate HR and Finance because they’re used to their existing systems. But to ultimately improve the experience, that discomfort must happen.
Frontline workers are crucial to digital transformation. They must adapt to new software, new workflows and new ways of working. If they’re showing resistance to change, be sure you’re communicating the reasons for change, and how it will benefit your team — and your customers.
Related Article: Communicating Change: Overcoming Resistance Through Empathy
You Aren’t Leading as a Group
Communication may be key to overcoming resistance to change, but it can be easy to forget a key ally in the battle: your middle management. We all understand the importance of getting the CEO and other top executives to commit to supporting the significant change that’s required for successful digital transformation. Yet for change to truly take hold, you must also involve your senior managers, department heads and other organizational leaders.
Without involving your often-forgotten middle managers, you’re running the risk of significant resistance. Middle managers are especially prone to defending functional silos as a source of power, and often see silo-busting digital transformation initiatives as an attempt to take away their influence.
At a minimum, you should:
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- Involve key middle managers in developing the transformation plan. People fear what they don’t know, and that goes even more for middle managers who are anxious about losing their power and influence. By including key middle managers as part of the process, you help them to see how change will benefit them — and make it easier for them to support the change to their teams.
- Engage your middle managers in communicating key messages and timelines to their teams. To reduce resistance to change, your wider organization needs to understand the why, the what and the how. You can’t just broadcast the reasons for change once at an all-hands meeting and assume your work is done. Using your middle managers, you can tailor communication to each team, focusing on what they care about and need to know, and emphasize how the change will benefit them.
- Have a plan to reward champions and sideline blockers. I love John Kotter and Holger Rathberger’s parable “The Ice is Melting” with the key character of NoNo. But what do you do when you’re faced with a NoNo on your own team? You can’t ignore them and hope they go away. Instead you need a plan to make NoNos irrelevant, and spotlight champions of change. Whether you choose the carrot or the stick, be ready to make hard — and sometimes unpopular — choices. After all, doing things 'the way it’s always been done' has gotten you to this point!
Don’t forget to link your leaders’ performance objectives and compensation to transformation success. When you put your money where your mouth is, you drive home the importance of your digital transformation initiative.
Related Article: Why Change Needs to Be Managed in the Digital Workplace
You’re Prioritizing New Technology Instead of the Customer’s Needs
Marc Benioff, chairman and co-CEO of Salesforce, has pointed out that every digital transformation should begin and end with the customer. Yet when it comes to digital transformation, it’s easy to focus on shiny new technology rather than the customer journey.
Why? Well, for one, it’s easier. Improving the customer journey requires disrupting long-held responsibilities and divisions, and upending 'the way it’s always been done.' It means you have to think across departments and divisions and beyond technology to focus on making life easier for the customer, rather than you.
How can you get started? Consider a journey mapping workshop. You’ll need one day for collaboration, in a quiet space without distractions. Invite five to seven participants who know the customer, like producing new ideas, and have different perspectives.
Once you’re together, map each phase of the journey with sticky notes. Don’t try to improve it at this point — you just want to get a picture of what’s happening right now. If you’re doing it right, while you’re putting the sticky notes on the wall, you’ll likely get a lot of statements like “wait, why do they have to enter the same information three times?” Hold those thoughts for the next phase, when you walk through the customer journey and look for opportunities based on what is lacking, inefficient or could be improved.
You’ll likely be surprised at what can be improved without investing in new technology. It might simply be a matter of improving handoffs between systems, enhancing front-end design or pre-filling forms with information you already have in a database. Whatever it is, you want to put yourself in the customer’s shoes to make sure their experience is the best it can be — and then see if you need new technology to make that happen.
Recognizing the warning signs of failure is vital to keeping your digital transformation on track. If your internal team doesn’t view digital transformation as crucial, doesn’t understand the benefit to the customer and isn’t leading with the same voice, you’ll have the early signs of disaster. And by taking a critical look at your digital transformation, you can make sure you’re headed in the right direction.
About the Author
Melissa Henley is Senior Director of Customer Experience at KeyShot, the global leader of product design rendering software. Customers are at the heart of all Melissa does, and her passion is around connecting people to content that can have a genuine positive impact on their lives.