Why Digital Transformation Isn’t About Digital
Why do digital transformation efforts remain incredibly difficult to do successfully? Most don’t focus enough on nailing the “transformation” part.
Thousands of companies have faced, and continue to face, the prospect of remaining competitive or even solvent in the digital age.
As the technical landscape continues to evolve, the reasons to undertake such a transformation are legion. IT organizations understand the stakes: According to ZDNet, 83% of IT leaders fear they’ll get fired if their digital transformation efforts fail.
Chances are that if you clicked through to read this from an email or social media post, or even a Google search, you’ve been involved in or perhaps even lead a digital transformation effort in your organization. And the chances are even better that it failed or is about to.
Digital transformation failure is so common that it’s unsurprising. As far back as 2013, McKinsey noted that 70% of all digital transformation efforts would fail. There were well-documented reasons for this: (1) unrealistic expectations around scope and cost, (2) difficulty managing timelines, and (3) lack of compatibility with legacy systems.
In truth, the rate of failure may be even higher than anticipated back in 2013. Since 2017, multiple sources have reported the failure rate of digital initiatives at closer to 85%. In other words, the problem is getting worse, not better.
Technology Isn’t Enough
At XPLANE we’re being asked more and more frequently to help our clients undertake this enterprise-wide shift. And it is a major shift, requiring multiple parts of an organization to rethink their approach to how they get work done, how they collaborate across business units, and how they engage with their customers.
In our experience, many companies don’t see these as the problems they need to solve. They focus on upgrading their technology and systems, but fail to focus enough on the people who will use them.
“[D]igital is not just a thing that you can buy and plug into the organization. It is multi-faceted and diffuse, and doesn’t just involve technology…It requires mixing people, machines, and business processes…,” wrote Thomas H. Davenport and George Westerman, researchers at MIT’s Initiative on the Digital Economy in their March 2018 article “Why So Many High-Profile Digital Transformations Fail” in Harvard Business Review.
It’s All About the People
Google some of the most recent thought leadership on digital transformation, and you’ll find a host of opinions about the technical decisions and rules that must be made, and the new processes that must be recreated. All of which are true.
But in any wide-scale transformation, the key to successful adoption isn’t this kind of sweeping technical change. That’s what will change. The key to making the transformation work is all about how it is implemented. And that has everything to do with the people who are asked to implement it.
This is why we urge our clients to focus on the cultural shifts necessary for transformational change. Adoption won’t happen unless teams understand not only how their processes and skills must change, but also how their behaviors must grow and adapt. What will collaboration look like now? Will direct communication be more important or less important?
How to Frame the New Ways of Working
A tool we use often in the early stages of a transformation initiative is our Ways of Working framework. This tool gives teams a straightforward structure and a beginning set of questions to frame their explorations about how working together must evolve.
If you’re getting ready to undertake a transformation effort, or if you’re in the middle of one right now, use this framework to structure your early thinking about how to bring your organization along with the coming change.
That last word is important. Let’s be clear: Digital transformation is, by definition, organizational change. Treat it like one. Check out our Change DNA tools to help map out your plan of attack. And let us know how we can help you put together a change program that sticks.