Many companies are investing in “digital transformation” projects to help them meet modern-day business challenges — but digital transformation is not necessarily the solution to succeed in today’s changing environment.
More than 80 percent of these projects fail because companies don’t have the right people to deliver on them, or the right process to help these people succeed. You need new people or retraining, but also revised processes, to make it work.
Another reason these projects fail has to do with articulating the “why” behind the transformation. If your employees aren’t engaged, they may not feel the urgency to push the leaders’ changes through. To create a successful transformation, you need a culture that supports change, but many companies are not built to sustain it.
There is no such thing as digital versus non-digital reality
The term “digital transformation” has been adopted without a concrete meaning to it. Consumers are not “digital” or “non-digital”; they don’t care about digital or non-digital touchpoints and services, they want access to products and services anywhere, anytime.
Employees are not digital, either. They adapt new skills and tools for succeeding in today’s market. The highest rated reason for employee retention is talent development programs. Learning is their priority, not digital work.
The best organizations aren’t “digital” or “non-digital” in nature but learn how to transform themselves — continually. General Electric used to manufacture jet engines and major appliances. Today they are IoT developers and sell data services. Starbucks used to just sell coffee. Now they offer financial services through mobile payments and credit cards. Netflix used to deliver movie DVDs. Now they are the largest content creator and provider in the West.
Real change comes about with constant transformation, not digital transformation. Remember that today’s technology is not tomorrow’s technology. We’re laser-focused on digital and mobile technologies now. But artificial intelligence and bio-engineering are the technologies of the future. Transformation must account for both.
What does constant transformation mean?
It means staying relevant — the ability of an organization to look outside of itself, assess what’s happening in the marketplace, and react properly. You need an “outside-in” relevancy, such as learning from users, co-creation, and using design-driven methodologies. You also need an inside-out relevancy, which includes retraining programs, talent development plans, and building “octopus” people who learn and grow. These people tend to be curious, cross-disciplinary, and nimble.
The organization also must change and adapt from the inside and the outside. A change mindset encourages trial and error, permits failure, and capitalizes on opportunities. Externally, you need iterative strategies. That means challenging your business strategy and adjusting it often. Successful companies reinvent themselves and pivot every few years. Amazon was an online bookseller but now it’s a superstore, a lender to small businesses, and a content creator. Uber, once just a black car service, is now inventing the future of mobility and selling data to service municipalities. There is no such thing as a strategic plan that’s just a few years out. A good strategic plan is an iterative one.
Above all, for constant transformation to work, you must be driven by a purpose. That requires defining and refining the reason “why” the company is doing what it’s doing. These are values that are shared internally — what does it take for employees to engage, and to contribute to the company’s vision? Transformation is very much about giving employees purpose and letting that drive what they do on a daily basis.
How do you do this? Follow the leader
Sandwich organizations have a better chance for success. Successful transformation projects have strong leadership that drives change while also empowering individual employees to connect with the leader’s vision. Between the leader and the employees are the organizational processes and culture, which act as facilitators for delivering on the vision.
Leadership works when you have a leader who is committed to moving forward. A style that is practical is felt more tangibly among the ranks. We found this to be the case when we worked with Pepper, Israel’s first digital bank owned by Bank Leumi. The project was successful because leadership adopted a bold startup-style approach that was committed to moving forward without waiting for bureaucratic decision-making processes and steering committees. This changed how the rest of us behaved. It gave us the authority to do our work the way we saw fit, and to have ownership over the project.
Give people the chance to do creative, independent work and they will always take it. Talent moves the company forward. Studies have shown that people who can be self-driven and help shape their own jobs are more engaged and perform better at work. Everyone needs a versatile knowledge base to succeed in our fast-changing world, which is why it’s important to recruit and develop octopus people who can constantly grow new tentacles and acquire new skills.
How do I do start the process?
Changing organizations is difficult and doesn’t happen overnight. But if you buy into the idea that the transformation is driven by individuals (leadership and employees), then you can adopt a minimum viable transformation (MVT) approach to start preparing yourself for constant change.
First, understand the future of your role or job, and ask yourself whether it will remain relevant. Is there a way to transform it? If you see competition for your job coming with AI and smart computers, try to engage that fear. If computers will do research and analysis, perhaps facilitating processes, applying knowledge, and creative thinking will be assets and skills you should develop to grow and stay relevant.
Then comes the hard part: adapting to change. Get used to working in changing environments and to using new tools. Try doing the same task but in a different way, work from home or with a new team member, or use a new piece of software or some other tool that trains you to adopt change.
Then define the why of what you’re doing. Are you driven by a purpose? Conduct quarterly personal reviews of the reasons why you’re doing what you’re doing, and understand your purpose and personal vision. This helps ensure that you are managing your own constant transformation.
Remember to execute your three-point plan
The reason a change management initiative fails is always linked to execution. The most important pain points live inside the organization. So remember these three things:
- Focus on constant transformation instead of digital transformation.
- Build a sandwich organization with octopus people.
- Start your own transformation with an MVP approach.