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While digital transformation has been a vastly overused buzzword of late, it’s not just the latest fad. Organizations that are able to adapt to the changing times and adopt new-age technologies are able to remain competitive and relevant, and stay ahead of their peers. 45 percent of companies reporting a positive impact of digital transformation also reported higher net revenue growth (Digital Transformation Survey, 2020, Deloitte).
But digital transformation programs often fail. How can you ensure that yours doesn’t?
What is Digital Transformation?
Technology is constantly redefining our lives, giving us easy access to amazing tools and resources and creating limitless paths to shape the future. Digitization has shrunk the world and blurred boundaries across societies. Mobile and cloud computing, big data, the Internet of Things, Artificial Intelligence and Machine Learning are revolutionizing industries and generating innovative, smart business strategies. Online learning has become the new educational paradigm, allowing learners in remote corners of the world access to the most advanced learning concepts. Smart homes offer the ultimate in comfort and convenience, optimizing resources and helping to keep the planet green.
Digital transformation reimagines value creation for the end-users, connecting people, data, and processes to maintain a competitive advantage in the digital-first world. Adoption of digital technologies has become an imperative more than any other, redefining and reshaping every aspect of our lives. Through a successful value-creation strategy, businesses can improve processes and enhance productivity, create customer delight and employee engagement, and mitigate risks while optimizing resources.
The current pandemic has turned the world on its head, disrupting almost every aspect of our lives. One of the far-reaching consequences it has brought about is, as the Economist put it, “the infusion of data-enabled services into ever more aspects of life.” In the uncertain times caused by the pandemic, digital transformation has assumed even more strategic importance than ever before. To survive and thrive in the competitive marketplace, businesses must stay afloat in the waters of the new digital oceans. Going digital will help them build the resilience that the future demands.
But in reality, research indicates that 70 percent of large-scale transformations are known to fall by the wayside, without achieving their objectives. Why so? The most obvious shortcomings include poor employee engagement, lack of guidance and support from the leadership, disconnect between cross-functional teams, and a lack of accountability.
To accelerate digital transformation and ensure successful adoption across the enterprise, several factors are key:
Companies must take a people-first approach
Along with investments in technology, investing in the workforce is what will drive innovation and create sustainable change. Analysis shows that successful transformations are hinged on changing the company culture in tandem with the upgrades in technology. While technologies can be bought, successful implementation requires a sea change in the people’s mindset as well. Employees must be empowered to adapt to new ways of working. Technology should be paired with the right human skills, and even the most brilliant innovation will become redundant if the workforce is not equipped to use it.
There are two proven ways in which companies have driven successful employee engagement through the transformation. First, establishing and reinforcing new habits and ways of working through formal mechanisms such as continuous learning. And second, allowing employees to offer their opinions on how and where to adopt digitization. When they feel they are being heard, they are more likely to adapt to the change when it happens.
Hire savvy, far-sighted leaders
For any change to be successful, it has to be driven from the top down. Actions speak louder than words, and what the leadership does will significantly impact team performances. The mindset and values that are followed by the most senior leaders will be the main differentiator that enables the effectiveness of the organization’s transformation.
MIT Sloan’s Management Review research initiative titled.
The New Leadership Playbook for the Digital Age shows that only 12% of the respondents interviewed felt that their leaders had the right mind-set to lead their companies forward into transformation. Investing in top talent, and paying a bit more to hire savvy, far-sighted leaders can make all the difference. Impactful leaders who can connect on a deeper level with the workforce will be able to motivate them to outperform, taking any innovation in their stride.
Senior leaders who encourage employees to experiment, without being chastised for small failures, will be far more likely to create a successful blueprint for change. This involves being bold enough to take risks, and to challenge old, traditional ways of working. People in key roles who ensure that they collaborate well with others at all levels and are available for open discussions on challenges faced by the team, are more likely to report success.
Implement digital upgrades wherever possible
For employees to fall into new ways of working, the right digital tools and processes can go a long way to support success. Making the adoption of digital tools an organizational norm can facilitate rapid analysis of complex data, improved communication and ease of access to information, and create a network of cross-functional, self-organizing teams that are each accountable for their own tasks.
When organizations are able to modify their traditional operating procedures to integrate digital technologies, they are already well on the way to a successful transformation. Research by McKinsey shows that leading businesses are investing heavily in upgrading their technology, adopting innovations that will help them meet the challenges of the present and the future.
Build organizational capabilities for the future of work
It’s not just enough to install the digital upgrade and expect that it will be adopted seamlessly. How ready is the existing workforce to take on this change? The right upskilling and reskilling programs should be in place to ensure that the people who need to use the tools and technologies have the capabilities they need to adapt.
In the era of rapid technological change, skills become obsolete very quickly and the workforce should be able to continuously adapt to evolving conditions. Cultivating the right capabilities will create tangible benefits through value delivery for the company, its employees and its customers alike. These capabilities encompass not only technological skills but also social and emotional skills such as communication, empathy and resilience to change.
What is the roadmap for a successful transformation?
Every organization must define and manage its own roadmap towards a digital transformation effort, taking into account the many change initiation programs needed to realize success. It should first assess the digital maturity of the business today, and then define the future digital vision that is sought. Along the way, intermediate business goals and measurable metrics will ensure that process is achieved one step at a time.
A successful business transformation is one that is well-positioned to hold its own in the competitive marketplace, attracting more revenue and winning the hearts of customers.
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