Only 3% of the leaders say they saw lasting change in their firm due to Digital Transformation. In 2018 organisations invested a trillion dollars on digital transformation. The spend is expected to be 1.2 trillion dollars in 2019. Why would only 3% firms see lasting change and only 14% firms see economic benefit after making such huge investments. Executives do realise the importance of getting digital right, yet the results seem to be dismal.
Why is it important to get Digital right?
Digital today is a way of life. No product is made, no person moves today, nothing is analysed or communicated without some form of digital technology being integrated into it. With the massive convenience and reach, digital brings with it obsolescence and impermanence. Changes brought about by digital technology alters business models fundamentally and the chances of slow movers slipping into obsolescence and irrelevance is very high. Even if a firm appears to be doing extremely well, they have no choice but to adapt to the digital mindset and way of working. A digital mindset allows the firm to constantly learn and unlearn. An organization which gets digital right is better poised to survive in the future.
Digital Transformation is not a point in time activity
Disney is a good example (among others) of an organisation that got Digital Transformation right. Atleast, they have a few results to show, all owing to Digital Transformation initiatives – Increasing sales by 20%, 3000 more visitors per day and labour scheduling reduced by 20%. Disney’s three pronged recipe for success is : a clear digital vision, an analytics culture and an ongoing investment in digital.
The emphasis on ‘ongoing’ among others is what sets Disney apart from many other firms like Lego, Nike, Procter & Gamble which attempted the same.
Lego closed its ‘Digital Designer’ program. Nike cut back on its digital department, dropping an activity monitor called ‘Nike + Fuelband’. Ford invested heavily in digital endeavours only to realise that quality and costs in other departments of daily operations have an impact too. Even Procter & Gamble, a company that wanted to be ‘the most digital organisation in the world’ had to drop out of the race, when faced with the economic realities of its digital expenditure.
Preparing for an ‘ever- ongoing’ transformation
Digital technologies are bringing in changes at a rapid pace. This rate of change does not give firms the luxury of time and resources to restructure themselves and respond to the market. Earlier firms would have 3-4 years before they needed to massively change their way of working. This 3-4 year period gave them the luxury of time allowing people to get used to the changed technology, structure or way of working at their own pace and slowly adapt to a new mindset.
Today with no single finish line in sight, getting through ‘a massive change’ is no longer the goal. It is becoming imperative that organisations develop the ‘capacity to change’. Firms will need to actively plan for and help their employees build resilience and build a mindset of continuous change.
Evolving the organization’s capacity to change:
Firms can help employees build resilience and the capacity to change by:
- Helping employees see that as they get through ‘this particular change’, what they are learning is ‘how to change’.
For instance, when employees learn a new process, skill or even to use any collaboration technology, make it evident, that they have not learnt just this new tech/process. Rather they have learnt ‘how to learn’ and can now use this knowledge with confidence to adopt anything new that might come their way.
- Second, actively help employees adopt a new mindset of ‘continuous change’. For starters, firms can do this by not thinking of Digital Transformation as an IT project which has to go live! There is a tendency to associate Digital with IT. This traditional mindset gets employees to think of their work in ‘projects’. Projects which have a scope of work ,a defined start and end point.
‘Transformation’ is not as specific as ‘Implementation’. Transformation does not end with a go-live or the launch of an initiative. Transformation is complete when the people, the culture and the processes of the organization adopt it as a way of working and at the same time are also are looking ahead to learn the new (and unlearn).
The first blueprint for Digital transformation which a firm prepares must include ways and means of helping employees build this mindset of continuous change and being constant learners.
- Third, firms can help build the organisational capacity to change by giving employees a sense of stability and purpose as the employee’s navigate (often) stressful times of the learning curve
Digital Transformation is fundamentally human
Digital Transformation is not a project which needs to be implemented. It is a new mindset to be adopted by everyone in the firm. It needs to be worked on for the long haul. Building a new mindset requires new experiences and reflection on those experiences. Transformation and change is a human experience . Digital Transformation is about technology but change has to be orchestrated, adopted and worked on by humans! Which is why it is critical to view Digital Transformation through the lens of people who will work on it.
Image credits Hans-Peter Gauster on Unsplash