Digital Transformation has become quite the industry buzzword. It’s become a goal for most organizations to achieve, yet more than half of these attempts are unsuccessful. What is it that prevents a successful digital transformation? If you’re not one of the companies that has already failed or is on the verge of failure; keep reading to ensure you too, don’t become part of that rapidly growing statistic.
“Successful transformation depends on intention, clear focus, consensus, and well-stewarded change. Digital transformation is no different.”
- Tim Siemens, Chief Technology Officer
Virtually every organization today is on some kind of digital transformation journey. Some are getting it right, but many are not. Industry research tells us that the failure rate for digital transformation projects is north of 50 percent, with many experts citing failure rates of over 80 percent. What’s becoming very clear is that we’ve become really, really good at failing. We know what we need to do to transform, and I believe we know what we need to do to succeed, but we choose not to do it.
It’s not that we plan to fail; it’s that a plan is not enough. We fail to see the context outside of the plan that will either support or constrain digital transformation.
What exactly can lead to digital transformation failure? Four things:
Don’t assign clear sponsorship.
Leave consensus out of it.
Let the change manage itself.
Be bad at the basics.
Failure Step 1: Don’t Assign Clear Sponsorship
Any big failure in digital transformation begins with a lack of sponsorship.
If the Chief Executive Officer doesn’t demonstrate ownership over the transformation, why would the executive team?
If the executive team doesn’t demonstrate support for the transformation, why would any other members of the organization?
If no one believes the transformation is supported at all, then why change?
The role of the sponsor is to mobilize support, remove barriers, and define the urgency necessary to drive performance and results from the digital transformation. The sponsor is the accountable person who holds others responsible for delivering the necessary results to achieve true transformation and associated benefits.
“Transformation requires clear and intentional sponsorship that is actively defending and encouraging the creation and adoption of the change.”
- Kris Hiebert, Director Digital Business Transformation
If failure is not an option, assigning a single sponsor is key (but not enough!). In the case of digital transformation, the sponsor should be at the executive table and able to influence and direct organizational resources and priorities to ensure proper support for the digital transformation over a sustained period. Often this will be the Chief Executive Officer; however, if delegated to another executive member it is important to ensure that this individual has the authority to execute on their mandate, otherwise decision making will be slow and the sponsor ineffective.
Failure Step 2: Leave Consensus out of it
“Transformational success requires alignment throughout an organization and that starts at the top with the executive team. Without clear direction from a united executive team, transformation will not occur, and the organization will regress to its former norm.” – Scott Harra, Executive Vice President
Accountability to transform rests with the entire executive team. Lack of consensus on what the transformation means, who is accountable for what aspects of it, and what the desired future state is will easily assure confusion, conflict, and lack of intentioned action. An exceptionally strong sponsor will mildly mitigate such a situation; however, the most effective sponsors will ensure that this situation does not occur.
The challenge facing the executive team is that many lack the tools and approaches necessary to navigate the difficult conversations necessary to create consensus and agreement. For example, how does the CIO create understanding and urgency with her executive peers that technology can be more than email and mobile apps, that it can be a core capability of the organization in a future where digital products will be what consumers demand? Literature is available far and wide; however, it’s going to take more than an executive team self-help book to get unified.
To avoid failure, the executive team often needs to take time out and learn how to work together effectively with alignment in both intention and action. This requires understanding what outcomes each function is accountable for delivering today, and what breakthroughs the executive team must work together to achieve in the future. No transformation or business will succeed without a leadership team that works together to achieve the results that all agree are necessary and important to the evolution of the organization.
Failure Step 3: Let the Change Manage Itself
Digital transformations are complex and place significant stress on the organization as internal functions, and external products and services are realigned to posture the organization to endure arrived and emerging changes in the industry, customer demands, and technologies.
The best way to assure failure is to let the change manage itself by not developing a constant awareness of the change, providing little alignment between the transformation and the benefits it provides contributors, not equipping contributors with the tools needed to transform, and lastly by not reinforcing and encouraging the repetition of behaviors that support progress on the transformation journey.
“Transformation without change management provides the greatest assurance that change will not occur and that the old way of doing things will continue to preserve things as they are, not as they should be.”
- Beverly Thompson, Senior Consultant Change Management
Managed change ensures that there is a clear and tactical plan to bring all stakeholders on the transformation journey. When executed (and only when executed!) does it create awareness of the transformation, how each member of the organization contributes to it, and what tools and support are needed to make those contributions impactful. Managing change is the best means by which to create a desire in stakeholders to actually change and support the transformation.
Failure Step 4: Be bad at the Basics
The routine work that the organization undertakes to produce outputs of value to stakeholders is perhaps one of the most significant enablers and constraints on digital transformation. For the organization to produce original works and create value outside of itself, it must be well organized and configured to perform repeatable actions with reliability and quality.
The mistaken assumption is often made that strategy is a more valuable activity over the day-to-day routines to the organization.
Poorly executed routine activities that are inefficient, unreliable, and lack standardization are a soft foundation upon which to build a transformation journey. Failure is assured as the effort and energy required to transform are hungrily eaten by the insatiable appetite of how things are done today.
“From the executive to front-line contributors, being good at the basics frees organizational effort and energy so that focus is on the digital transformation, making breakthroughs reachable and believable.”
– Karl Schwab, Senior Consultant Digital Business Transformation
To be good at the basics, it is key to understand what outcomes are most important to support the organization’s purpose and value. Once those outcomes are defined, connecting the routine processes executed to support those outcomes and establishing metrics for their measurements provides a means through which the organization can agree on what is important, and what is done to deliver on those important outcomes.
In this scenario, under-performance is transparent and know, enabling outcome owners to take action in addresses the constraints and causes of under-performance. In a rapid period, the organization becomes better able to be good at the basics and can focus on the breakthroughs required for digital transformation.
We know what we need to do to be successful in digital transformation; however, we often find ourselves doing the opposite of what we know needs to be done. Lack of sponsorship, the absence of consensus at the executive, unmanaged change, and being bad at the basics are all key contributors to transformational failure.
Successful transformation will demand that these factors be addressed, and an executive team tackling them will quickly find that true transformation is difficult, complicated, and uncomfortable. Thankfully, what is also true, is that an executive team who demonstrates strong sponsorship and consensus will be well equipped to navigate the many difficult decisions and situations that will arise.
This will provide confidence to stakeholders that the transformation is supported and an important priority for the organization, creating momentum and support on the organization’s digital transformation journey.
Online Business Systems and Mass Ingenuity have created a partnership to address these challenges – and more.Through the combination of Mass Ingenuity’s Results Management System and Online’s over three decades in Digital Transformation; executive teams are rapidly facilitated towards creating a unified intention on transformation and are equipped with the tools necessary. Together, we will ensure the basics are well taken care of so that the organization can focus on achieving a successful and sustained transformation outcome.