There’s a lot of hype nowadays around initiatives to apply digital capabilities to improve efficiencies, increase customer value, and create new monetisation opportunities.
It’s big business actually. About a 1.3 Trillion USD book of business.
It’s called ‘Digital Transformation’.
Sadly, a lot of it is proving to be useless and ineffective - with one McKinsey Research Report indicating that 70% of these ‘digital transformation’ initiatives fail to achieve their stated goals.
Why is this so?
Fundamentally, it is because the bulk of the effort that goes into ‘transformation’ is almost always on the technology that promises to provide possibilities for things like efficiency gains and customer intimacy.
While technology itself is a critical component and enabler of any digital transformation narrative; if the people involved in it lack the mindset to change and adapt - and if the existing organisational practices and processes are flawed, any effort to digitally transform will simply magnify those flaws.
As practitioners in this space - and drawing from the experience of our own evolving digital transformation journey; we have learned four critical lessons that are now at the foundation of our own methodology and approach to transformation.
1. Digital Transformation must always be guided by business strategy.
We often encounter organisational leaders who have already decided on the tool or technology they want to sell within their organisations in the name of ‘transformation’.
While there may be merit to enhance performance, perhaps, or realize short-term value from existing relationships and investments; the difference between those who succeed and those who fail at transformation is simply that those who realize (and can measure) success are those who begin the journey leading with their broader business strategy.
2. Digital Transformation is most effectively realized when enabled from within your organization.
We often fall into the vortex of ‘best practice’ without thinking through the consequences of applying universal, one-size-fit-all concepts to processes and systems that have taken years to evolve within the context of our organisational structures and culture.
Our approach to transformation has learned to rely instead on insiders within the organizations we serve to guide the transformation narrative - where they provide direction on what works and what doesn’t in their world.
3. Digital Transformation must recognize and accommodate for the fear of the unknown.
The most common perception we are challenged with in our practice is the fear that any given ‘transformation’ objective threatens jobs. While far from the truth, this creates an environment where people engage with a resistance mindset from the get-go.
If an organization’s leadership and its internal communication channels fail to clearly articulate the value of the objectives, intent, and desired outcomes of the transformation initiative to its people; any effort invested in transformation is often, in our experience, rendered ineffective and destined to fail.
4. Digital Transformation must encourage a culture where failing is not reprimanded.
Perhaps the biggest lesson we’ve learned in our practice is that those organizations that refuse to embrace an agile mindset within the context of their organizational structures and decision-making abilities often set themselves up to fail regardless of the size or scope of the transformation initiative.
The process of digital transformation is inherently uncertain … changes need to be made provisionally and then adjusted, decisions need to be made quickly; and different groups of people - all with their own agenda, limitations, and desired outcomes - need to come together to test, validate, and contribute to the evolution of that process.
In organizations where mistakes aren’t tolerated and where agile concepts are alien, people generally refrain from contributing to the transformation initiative since they fear the consequences of mistakes and failure.
In conclusion, while technology is, perhaps, the most talked-about construct in most digital transformation narratives; in our experience as practitioners in this space, we have learned that organizational practices and processes - and even more importantly: the people involved in (and affected by) transformation initiatives - have a much larger impact and influence on the realized outcomes and make the difference between a failed attempt and successful transformation.
If you'd like to learn more about AMTRA's proprietary framework engine that looks at the capabilities of people, processes and technology across 8 critical areas, check out our Framework Frank video. The output is a recipe book, which includes detailed step by step guidance to get you from your current state to your desired end state.
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Written by Rahim Dawood, AMTRA's Vice President of Technology who oversees the development and implementation of strategic IT initiatives and best practices for clients. Connect with him on LinkedIn https://www.linkedin.com/in/rahimdawood/.