Digital transformation is not a matter of if, it is clear that it has become essential. A 2017 Harvard Business Review article points out: “Since 2000, 52 percent of companies in the Fortune 500 have either gone bankrupt, been acquired, or ceased to exist as a result of digital disruption.” [i] It further points to research that estimates that three-quarters of 2017’s S&P 500 will fall off that list within a decade.
Clearly businesses are trying to transform. But trying and succeeding are two different things. Many find the pace of projects designed to make them more digitally adept and agile to be excruciatingly slow. Transformation often seems stuck in a tar pit of unending decision-making and obstacles. Visions of dramatic results fall frustratingly out of reach and the end of the process keeps stretching farther into the future.
Why doesn’t all this marvelous technology fall conveniently into place? It’s not because of the technology. It often fails because of things fundamental to our organizations. As we have helped organizations undertake digital transformation, we have found six key obstacles that commonly impede the process. We’ll summarize them here and examine each in greater depth in future blog posts.
How aligned is your leadership team on their vision? Digital transformation is a critical component in your organization’s future. As such, it’s not something to delegate as simply another company initiative.
For digital transformation to work, it must be understood and championed by the entire leadership team. It must be shaped and molded through collaboration across the entire C-suite – with representation from across the entire organization – so leaders have a clear definition of what transformation means for their company before they even think of delegating its implementation.
2. Mindset and behavior
How willing is your workforce to change their mindset and behavior to make full use of the benefits of digital transformation? Do they understand their role in it? Do they have an incentive to change?
Digital projects cannot deliver positive results when the workforce does not adopt them. For example, if employees do not want to learn and use an advanced analytics solution that provides data that could help them prevent potential problems or make better-informed decisions, the investment provides no business benefit. Overcoming this barrier requires not only training employees on the technology, but also helping them see how the technology makes them more valuable employees to achieve the desired business outcomes.
3. Skills and capabilities
How digitally literate is your organization? How willing are they to engage in lifelong learning? Digital literacy involves more than knowing how to use the latest device or software, more than being aware of emerging technologies. Digitally literate people might not necessarily know how to code, but they can translate their familiarity with one digital application to another. More importantly, they can recognize and embrace the potential value that digital tools can bring to their work effort and be open to new ways of doing things.
A willingness to engage in lifelong learning is crucial to maintaining an effective, futureproofed workforce. A 2016 World Economic Forum report[ii] predicted that at least one-third of skill sets that would be considered essential in four years would be new skill sets required by emerging technologies. This need for constantly expanding skill sets is with us to stay.
4. Employee experience
How engaged are your employees in digital transformation? Unfortunately, the term employee experience has become so tied up with its connection as a pure HR exercise, that many people don’t think beyond that connection. But getting your employees to feel engaged in your digital transformation and their work will directly impact the level and speed of adoption that your organization attains. It also delivers clear business results, as is shown by its direct impact on customer experience.[iii]
5. Processes and governance
Do you have clear goals and metrics to measure progress in your digital transformation? Is your methodology truly agile, or agile in name only? If structures and processes are not designed to support transformation, it can easily slow to a crawl.
For example, are approval processes and investment criteria sufficiently agile enough to avoid slowing down transformation at every step? Is digital transformation funded and prioritized as a true business transformation, or is it treated like a side project, perhaps even positioned as little more than a line item within an already stretched IT budget? If digital transformation is not pursued as a true business transformation, it will never fully achieve its goal.
6. Organization and ecosystems
How are you approaching the enormous scope of digital transformation? Your goal is to transform your company down to its roots. What plan do you have in place to achieve that without disrupting everyday business along the way?
One approach is to set aside a defined part of the organization to focus on innovation. It can serve as an incubator within the company and offer a test environment in which to perfect transformative approaches. With dedicated people and budgets, it can act in a more agile manner to respond to customer needs and take controlled risks. This can be a first step toward digital transformation, with its transformations rolling out gradually across the organization in a carefully planned manner that keeps it from becoming a silo.
Digital transformation is essential in today’s increasingly digital world, but it can slow down when it encounters obstacles in leadership, employee mindset and behavior, or employee skill sets. It can also slow down from a failure to engage employees in the transformation, from processes and governance that fail to support transformation, or from a lack of effective planning regarding how to engage in transformation while avoiding unnecessary disruption.
We’ll examine each of these six obstacles in more detail in the coming weeks. Join us as we explore these transformation-killing obstacles – and proven ways to identify and overcome them.
To find out how you can accelerate your organization’s Digital Transformation,
contact us for a free consultation with nepf.
- Leadership: The critical role of Leadership in accelerating Digital Transformation
- Mindset & Behaviors: How Leaders can develop Workforce Mindset and Behaviors that accelerate Digital Transformation
- Skills & Capabilities (1): Skills and Capabilities to Thrive in a Digital World
- Skills & Capabilities (2): Effective Learning Strategies for a Digital World
- Employee Experience: A fresh look at Employee Experience: Accelerating business results from investments in Digital
- Process & Governance: Essential Process and Governance actions to unlock greater business value from Digital Transformation
- Organization & Eco-System (1): Enabling Innovation without disrupting the Core Business
[i] Digital Transformation Is Racing Ahead and No Industry Is Immune, Harvard Business Review, July 19, 2017, Available: https://hbr.org/sponsored/2017/07/digital-transformation-is-racing-ahead-and-no-industry-is-immune-2
[ii] The Future of Jobs, World Economic Forum, January 2016, Available: https://www.weforum.org/reports/the-future-of-jobs
[iii] Blake Morgan, The Un-Ignorable Link Between Employee Experience And Customer Experience, Forbes, February 23, 2018, Available: https://www.forbes.com/sites/blakemorgan/2018/02/23/the-un-ignorable-link-between-employee-experience-and-customer-experience/#2575245e48dc