Did you know 70% of digital transformation programmes fail to deliver on expectations? That is a shockingly high amount, especially if you consider the root causes are often the same. Recently McKinsey published a survey report, highlighting the critical success factors in Digital Transformation programmes, of which we have selected three in this article.
Observation 1: Digital Transformation overshoots its target
An organisation has started an IT project. In preparation, they have thought about the goals they have, and they have drawn up some requirements. Subsequently the team has gone out to shop for solutions and invited vendors to do a presentation. They show the ideal world and the team is sold on it, they want that perfect solution.
The survey of McKinsey shows organisations are at risk of losing sight of their initial goals when they start executing. Digital Transformation becomes the goal and it drifts further away from the business outcomes the organisation was aiming to achieve. The result is that benefits are often not realised.
What can you do:
- Digital Transformation is a means, not a goal. Maintain focus on the overall business outcomes and communicate it clearly. Ensure these are tied into items such as efficiency, revenue growth or overall effectiveness, making them measurable for the overall bottom line.
- Evaluate which skills and tools will actually contribute to improving your organisation, stick to those items and keep things simple.
- Continuously evaluate whether these skills and tools are indeed the right one’s that help your organisation become more effective and efficient.
The core of any transformation are the organisational goals and targets, keep those at the forefront and use a digital transformation as a means to achieve them sooner.
Observation 2: The processes were insufficiently mapped, evaluated or changed
Great stuff! The new digital tools have been delivered and the whole organisation is now able to leverage new technology. After a while though, it turns our adoption remains minimal -or worse- people have created their own work-arounds. Ever wonder how that happened? The initial response from the team was great after all.
This is of course as close to our profession as you can get. Our advice is:
- Digitalising a sub-optimal process will always lead to below par IT solutions. Start with the process, map how work is done and use that as a foundation to drive improvement. That is something you need the whole organisation for, because….
- Departments, management and IT believes they know how the organisation executes on work. In practice, it turns out organisations know how the perfect case is completed, but are unaware of the exceptions that take place. Those exceptions are generally complex and extensive, making up a large portion of staff time. Planning for them is crucial to your digital transformation success.
- Processes form the bridge between your people and digital solutions. They clarify roles and sequences of actions, also highlighting what staff do outside of existing systems.
They also are the method to put the customer at the centre of your transformation. End-to-end processes show how you execute on enquiries, rather than work in siloed departments. As such you get an integral view of your organisation.
Observation 3: Culture never changed and employees felt excluded
Digitalisation focuses on delivering IT solutions and as such, the end responsibility often resides with the IT department. The gap this creates between the wider organisation and IT causes low adoption. Staff work the way they have always done, and a true culture shift never happened.
The immense opportunities technology offers us today requires equally large changes in the ways people work and a host of new internal and external collaborations. To make that happen, organisations need to look at impacting staff culture, customer centricity and self-service, response times and even the way customers look at you.
When ownership of the Digital Transformation resides solely with IT, organisations struggle to achieve the impact they need in those areas to fully leverage the capabilities of the new solutions they implemented. More often than not, culture is simply unchanged and people stick to their habits.
How to tackle it
- Get cross-functional teams together and analyse how you work, find opportunities to improve and highlight bottlenecks. Get the team to contribute and create involvement.
- Design your future state and explicitly define what is changing. The same team is part of that exercise, so everyone knows what is expected from them. Bottom-up approaches often lead to greater results thanks to widespread support in the organisation.
- Implement new technology to achieve the future state, so it matches how the teams will operate and forms an integral part of how you work. This is the biggest step towards adoption, as IT is now fully aligned with staff.
Changing an organisational culture is not something that happens overnight. It requires consistent and regular communication from management, explaining what is happening for which reason. Above all, studies have shown that changing the activities staff execute on has the biggest impact of all. Change how people work, and culture will follow suit. In the light of transforming your organisation, this means transforming work first drives higher adoption later.
Our 8 Digital Transformation Actions
Apart from the three observations, there is a myriad of other actions you can take that will help be part of the 30% that succeeds:
- Create a change story for your digital transformation to help people understand where you are going and how you will get there.
- Bridge the gap between IT and the business by creating cross-functional teams, embedding digital knowledge into each project you undertake.
- Executives and senior managers continuously motivate staff to adopt change and new ways of working, keeping the momentum going.
- Redefine roles and responsibilities to align with the end-to-end focus required to make digital transformation work.
- Involve those employees who are tasked with bridging your more traditional way of working with the new digital solutions.
- Actively promote a culture where employees can experiment and innovate. Support rapid-prototyping to become more agile and learn from mistakes.
- Executives and senior management need to break down silos and achieve collaboration across their organization, especially those who are impacted most/first by technological developments.
- Management should have and maintain urgency to achieve results and cascade that urgency down to their teams.
The Next Level
In this article we shared three of our observations and shared how McKinsey’s survey found transformation success if often not a tech question. Laser focus on business goals, customer centric processes (end-to-end) and involvement of staff are the common themes across the 30% of transformations that succeed. The great result is, when you follow the steps outlined here, you are much more likely to achieve the results you want and be part of that 30%.
Ready to move to the next step? Read about what tools you need to implement these findings.