In only a few months, the global coronavirus pandemic accelerated change in the way businesses operated across all sectors and regions. According to McKinsey, digital adoption has taken a significant lead at both the organizational and industry levels. Companies have accelerated the development and launch of digital or digitally enabled products in their portfolio by up to seven years. In addition, this shift toward digital is expected to last as leadership teams continue to invest in these implementations.
As companies embrace the accelerated digitization of their customers, supply chain interactions, and internal operations, the significant impact of digital transformation on working models, roles, organization structures, and employee engagement should not be ignored.
Digital business transformation involves an organization-wide change and can be a massive undertaking for any organization. The successful execution of any transformation effort is characterized by changing fundamental beliefs and developing new behaviors in an organization, resulting in a long-term shift toward a new strategic direction. Based on what I’ve seen, failure to adequately address the various people-related factors is a key reason digital business transformations fail.
Without a doubt, the most challenging part of digital business transformation is the human side of change. Although transformation does involve technology implementation, along with training and development to enable people to effectively use the technology solutions, successful transformation involves much more. At the core of transformation is the attitude toward technology solutions. This not only means understanding the need for change and adoption but also defending and promoting its daily use. This, however, is a little harder to achieve and requires consistent effort.
Organizations respond to change in a similar way to the human body. When a virus or foreign element is introduced, the body’s immune system will attack and fight against it to protect the status quo. Similarly, an organization and its existing culture may fight against change and transformation. This is referred to as the amygdala response by Salim Ismail in his book Exponential Organizations.
There are several crucial components that companies can initiate to successfully implement digital business transformation:
1. Link digital transformation to a shared purpose and future vision.
It is easier to drive change within an organization when people understand the why behind it. Define a clear purpose and vision for the transformation. A clear purpose and shared belief will provide direction and rally people behind the transformation journey.
According to Ismail, this shared purpose is referred to as a massive transformation purpose (MTP), a clearly focused and aspirational purpose that can unite the organization and inspire actions toward change. The MTP helps create a vision for what the future of the organization looks like and how it delivers value. This could be translated to mindsets, behaviors, and ways of working that will help deliver the desired future vision.
2. Clearly define and reward desired actions and behaviors.
Change is easier to embrace when there is clarity on what needs to be done and how to do it. This means a clear definition of what behaviors and actions are required to realize the desired future of the organization, as well as how success will be measured and rewarded.
Leadership teams can lead this effort by modeling actions and behaviors that align with the transformation journey. A more formal approach would be to align performance objectives to these newly defined actions and behaviors. In addition, ensure that change is embodied throughout the organization structure, governance processes and operational environment. At the core of this effort is developing the right skills and capabilities within the organization to help achieve the transformation goals. Companies will need to support this process by ensuring employees have access to the necessary training and education to facilitate upskilling or reskilling.
3. Take small and consistent steps in the right direction.
There often is an underlying assumption that transformation involves big and bold action to be effective. In my experience, however, companies that focus on consistent efforts involving small modifications are more likely to be successful in their transformation journey. By breaking initiatives down into “bite-sized” actions that feel non-threatening and are easier to adapt, companies will be able to drive lasting outcomes, decrease resistance to change and create continuous momentum throughout the transformation journey.
4. Identify trusted internal influencers and ambassadors to drive the change.
A key part of digital business transformation is the stakeholder analysis — a thorough assessment of the roles, influencers, and decision-makers in the organization. This analysis, conducted during the early stages of transformation, helps to identify the people in the company who can drive the change process.
While decision-makers and role-based authority can create a mandate for change, influencers are far more effective when it comes to winning over employees and convincing them of the need to change. Influencers may not necessarily be in leadership roles and can be found at any level within the organization. They also tend to have a wide network and engage well across organizational siloes.
The human side delivers sustainable change and value.
The success of digital business transformation depends heavily on change and adoption. While technology implementation, operating models, and customer-centric initiatives are crucial for building a digitally transformed organization, it is the changing beliefs and new behaviors adopted within the organization that can make or break transformation. In essence, the human side of digital transformation will ensure that change is sustainable and the anticipated value is truly realized.
This article was first featured in Forbes on April 21, 2021.
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