About 70% of digital transformations fail.
It’s one of the most commonly known statistics in the world of transformation, but yet it’s been the case for years. Time and again, enterprises large and small attempt to digitally transform only to end up wasting time, effort and money on initiatives that go nowhere.
So why does this keep happening? Most businesses look at digital transformation as a transformation that requires investment in ‘digital’ things. But it’s so much more than just technological innovation, and here’s why.
Why only focusing on technology could lead to failure
There’s no denying that technology is extremely powerful, and a real enabler for businesses to achieve that next-level efficiency or growth. But technology is a hammer in a builder’s hands – anyone can pick up a hammer, sure, but it takes skill, practice and strategy to get the most out of it.
A business that only focuses on the technology part of digital transformation risks lacking the resources it needs to get the best from its tools.
- Imagine this: Think of that same builder picking up a new piece of machinery without knowing how to use it safely; asking someone to play chess without teaching them the rules; or asking a student to run an MRI machine without teaching them how or why. Will any of these succeed?
To successfully digitally transform, organisations must consider transforming as a whole business. That means putting in place multiple areas of transformation to determine how to implement the right tools in the right place at the right time, to get the best results.
So what are the elements of digital transformation?
- Strategy: This is transformation’s guide – the justification for doing things a certain way, aligned to the overall business strategy. It ensures the results achieved are correct for the organisation.
- Processes: To implement change, there must be guidelines that govern it – who, what, why, when, where and how. These guidelines are your processes, and if they don’t evolve alongside the business then people will slowly, but surely, revert back to the old ways and inefficiencies will continue to build within the business.
- People: People run the business, they are your implementers and will make or break change. Equipping them with the right skills within the right culture will help them push your transformation towards success, instead of fighting it at every turn.
- Technology: Technology is what enables the evolution of businesses. Whether it’s cloud technology, IoT, AI, or the next amazing new technology breakthrough that’s created, technology equals empowerment – but it needs the other building blocks in place to function at its best.
Four tips for a successful digital transformation
1. Change must come from the top
We talked about strategy earlier. Strategy guides transformation and makes sure that each step taken on the road to change is taken for the right reason: that it will help the business achieve its goals.
In order to ensure that this occurs, change must come from the top – from the people who set the strategy, guide it, nurture it, and set the example for others to follow.
So what do you need to do?
Get your leadership team involved in setting the transformation roadmap. Communicate with them at each step of the way as to the benefits of change, and utilise their expertise in aligning change to the wider business strategy.
Leaders provide vision, inspiration and direction, from upper to middle management and all the way down to individual supervisors. If they are responsible for the direction of change and set an example of how to act and what to do, others will follow.
2. Your culture will need to evolve to include change
People in business tend to act as their company culture dictates – those rules, written and unwritten, that tell them what is and is not acceptable, how to do certain tasks, how to act around the workplace. So, if change isn’t ingrained into this culture, it may fade over time as people resort to their old, more comfortable ways (change is hard!).
So what do you need to do?
In order to successfully digitally transform, some employees will need to learn to think and work differently, and their culture must support this change of habit.
This may mean going back to the drawing board and rethinking the company’s core, or it may be much simpler. Leaders must take a holistic approach and review everything, to see where the possibilities are, the quick wins, the long-term goals, and everything in between. Some questions to ask:
- Do your documented processes include new changes in either ways of working or tools to use?
- Do you have undocumented processes (generally accepted ways of doing something that haven’t been written down)? If so, try to write these down so you can check that they align with the new strategy.
- Does your onboarding and training policy include the transformed processes?
- Now think about your culture. How people talk to each other, their ways of working, social activities, do these things support change or will they hinder it? You may need to rethink right down to this social level, and consider implementing new initiatives to encourage people to transform here too.
3. Take your people with you
At this point you might be worried that some of your employees aren’t equipped to change with the company. They might be worried too – change can be confronting, especially when it involves so many new things.
But, you may find that investing in your people – taking them with you – could lead to huge gains for the company.
So what do you need to do?
New talent may be required to plug key roles in your new business, especially tech roles where there’s a huge skills deficit here in Australia. But for the most part, with training and attention you can bring your people with you.
Often it’s more cost-effective to train people rather than find new staff – hiring costs a lot of money each time; existing staff already know the business, know your customers, and may just need a bit of help to get up to speed.
This is an opportunity to also differentiate yourself as an employer. Offer upskilling opportunities and career pathways that are relevant to the modern world, and suddenly you can advertise this as a perk of working for your company.
Invest in your people, and they will want to invest in you.
4. Your new tools must be surrounded by good processes
We’ve touched on this already but it can’t be reinforced enough – technology without a good process behind it will be used in an ad hoc, ineffective manner. This is costly, and may not maximise the investment.
Mature processes dictate everything there is to know about achieving an output, and how to repeat this output time and again to the same degree of quality. No transformation is complete without a deep understanding of process maturity within the business.
So what do you need to do?
As you look to implement new technology aligned to the business strategy, and upskill your people to ensure they flourish in this new world, you must ensure your processes are similarly updated (or created, if they don’t exist). This task includes:
- Assessing your company, top to bottom, and all of its processes. You must be able to find and understand every individual process, whether written or unwritten, to get a complete picture of what is happening in your organisation and who is responsible.
- From here, you can update these processes to support the change. Consider the fives Ws and H that we mentioned earlier (who, what, where, when, why, how) – are they all still relevant?
- Liaise with key stakeholders across the business to ensure you include the expertise of those who actually implement these processes.
- Create a plan to repeat this process regularly over time. After all, technology keeps evolving – that means you’re going to need to be able to keep evolving too.
Ready to make a start but not sure where? Let us help you
At Ko-Lab8, we believe that digital transformation is a rocket – we’re the rocket fuel.
To learn more about how we might be able to help your organisation, contact us today.