In Parts 1 and 2 we looked at how quickly large corporations and particularly SME’s adopt the right technology that is relevant to their business and adapt to the changing macro-environment with a robust business and digital strategy is key to their survival.

Digital Transformation (DT/DX) is about talent, not technology

In the final part of the series, looks at how Digital Transformation (DT/DX) is about talent, not technology. Having the right digital skills in-house to select, implement and roll out this technological transformation is fundamental. Companies can buy any technology, and their ability to adapt to a digital future depends on developing the next generation of skilled employees, closing the gap between talent supply and the demand and future-proofing potential of the organisation and its employees.

Looking at the statistics

In an article by Forbes 2018 of the $1.3 trillion that was spent on DT/DX, it was estimated that $900 billion went to waste.1 Why do most DT/DX efforts fail and only some succeed?

Fundamentally, most digital technology provides possibilities for efficiency gains and customer intimacy. if the employees of the organisation lack the right mindset to adapt change and internal practices are flawed, DT/DX will simply magnify those flaws.

5 key lessons for DT/DX to succeed in your organisation

Five key lessons have helped the Hive (team) at Project Reality in our previous experiences to succeed in leading organisations we have worked for through digital transformations that have ultimately thrived.

Lesson 1: Know your business strategy before you invest in any technology

An organisation may choose to focus their attention in three key areas for example speed, innovation and digitalisation. After concrete goals are established the company can decide on what digital tools to adopt, there is no single technology that will deliver speed or innovation, the best combination of tool for an organisation will vary from one to the other.

Lesson 2: Leverage your internal staff

Organisations that seek transformation (digital and otherwise) tend to bring in external consultants who tend to apply a one size fits all approach for best practice.

An organisations approach to transformation should be to leverage its internal intellectual capital because they have intimate knowledge of the products and/or services, systems and processes and that work and what doesn’t, in their daily operations.

Often new technology can fail to improve organisational productivity, not because of fundamental flaws in the technology, but because intimate insider knowledge and know-how have been overlooked.

Innovation is commonly described as creative destruction (first coined by Austrian economist Joseph Schumpeter in 1942),2 but the creative aspect of innovation is entirely dependent on people. The main implication is that when leaders think about investing in technology, they should first think about investing in the people who can make that technology useful.

Lesson 3: Recognise employees’ fear of being replaced

When employees perceive that DT/DX could threaten their jobs they may resist changing consciously or unconsciously. If the DT is ineffective, ultimately senior management will abandon their efforts and staff will be of the mind that their jobs will be safe.

Technology is always about doing more with less, yet that combination is effective only if you pair technology with the right human skills. Leaders must recognise those fears and emphasise that DT/DX process is an opportunity to leverage human adaptability to reskill and upskill the staff’s expertise to suit the marketplace of the future.

Lesson 4: Design customer experience from the outside in.

For example, when a well-known bank was looking to improve its user experience, payment solutions and purchases through its credit-card portal for customers. The UI/UX web design team put together the new website, using the existing wording.

The bank then called on a research company to invite members of the public to test the website and system and provide feedback on things that Barclaycard needed to improve on, plus make recommendations.

A scrum team was formed which combined the know-how of various internal staff in the different departments such as digital marketing, UI/UX web designers, developers and IT teams to have a brainstorm strategy meeting around the feedback gleaned from 200+ customers then allowed the team to build the input of transformation around the in-depth input from the customers.

Lesson 5: Foster the start-up culture internally

If the goal of DT/DX is to improve customer experience, satisfaction and intimacy, then any effort must be proceeded by a diagnostic phase with in-depth input from customers.

In a start-up or SME, for instance, they are known for their agile decision making, rapid prototyping and flat structures, with the process of DT/DX being uncertain, changes need to be made provisionally and adjusted.

This need for agility and prototyping is even more pronounced than it might be in other change-management initiatives because many digital technologies can be customised and leveraged.

Leaders must choose the best solution for an organisation which will have to be rolled out in stages and will require experimentation, so with a flat structure mistakes can be detected and corrected quickly (synonymous with SME’s), than with a traditional company with a hierarchical structure.

What this series has uncovered is that Digital Transformation must be people-led and technology-supported. Human beings are the common denominator for its implementation to be successful mid to long term. A people-led approach must come leaders of the companies, and the first thing on their agenda is to get buy-in from all the stakeholders (internal consultations) of the business, so there is no resistance to change.

Also leveraging the intellectual property internally is where the real transformation lies because staff have intimate insider knowledge and know-how of the products, services, systems, etc so at an embryonic stage they will be able to see the flaws in systems, etc that the company currently has and propose what kind of technology to adapt to streamline processes for the business and augment its delivery to its target market.

Today, consumers are in control of their interactions with businesses.

The business must really understand the customer experience and behaviour, their journeys and the business impact.

By implementing fully informed changes to the business, it communicates to customers and employees they’re being heard and builds trust, which is a valuable business commodity. Having the trust of your customers and employees generates support and understanding towards the implementation of your digital transformation.

References:

1. Forbes.com (Mar 13, 2018, 07:00am EDT by Steven Zobell Forbes Councils Member Forbes Technology Council COUNCIL POST, Paid Program, Innovation). Why Digital Transformations Fail: Closing The $900 Billion Hole In Enterprise Strategy [online]. Forbes.com [Viewed 17th December 2020]. Available from: https://www.forbes.com/sites/forbestechcouncil/2018/03/13/why-digital-transformations-fail-closing-the-900-billion-hole-in-enterprise-strategy/?sh=1ca60d697b8b

2. Investopedia (Updated Nov 20, 2019 by Carol M. Kopp). Creative Destruction: What is Creative Destruction [online]. Investopedia [Viewed 17th December 2020]. Available from: https://bit.ly/3qnMHLj