It’s one of the biggest “buzzwords” of recent years: Digital Transformation! It is still presented today as an intimidating, complex, and technical concept requiring very specialized expertise that only a handful of experts can master. Well, in my opinion, this is not necessarily true!
Digital transformation is, above all, the business of everyone within the company. To succeed, we must first arm ourselves with pragmatism and common sense!
Questions answered in this article:
What is digital transformation?
What are digital transformation technologies?
Why does digital transformation fail in many organizations?
But what is Digital Transformation?
In a nutshell, Digital Transformation refers to the changes made within an organization associated with the integration of digital technologies in all aspects of the structure.
An organization can be a company, an association, or a government institution.
The main goal should be to meet the demand of the new digital customer. It is a cross-disciplinary project within the company, whatever its size. It should involve all business aspects in all geographical locations, all generations, and all activities, including operations, marketing, finance.
In my courses, I even push the definition to its limit, and I talk about Digital Transformation within a family and for an individual as well. More about this in a future article.
Digital Transformation is by no means an objective in itself. Acquiring ad integrating new Digital technologies within the organization should never be the primary goal.
If you choose to digitize, it is to win in the marketplace!
Digitalizing is a considerable investment. Yes, the company is investing today to gain tomorrow in production volume, responsiveness, agility, waste management, employer brand, and much more!
Going digital is not just a way to stand out among the competition but also a way to survive in the market. When we speak about competition, we no longer talk about classic direct and indirect competitors. We also consider potential disruptors that are usually not your competitors and do not even belong to the same industry.
A good example is Uber; basically, an app competing with large well established taxi companies. Another good example is new financial platforms competing with banks in several financial services.
The perks of going digital can be deemed priceless. Companies that opt to go through this journey, and succeed in doing it, end up with outstanding results that beat their expectations.
In this interesting Medium article, you will learn even more about the advantages of going digital.
Technology is just the tool. Digital Transformation is the journey to a better, more productive, and innovative company.
As Jeff Fleischmanmentioned in Forbes : Transformation is not a singular, big-bang event.
It is a process that should never end!
Digital Transformation is NOT about technology
There is no single technology that will deliver all our expectations from Digital Transformation. Each organization needs to find the best combination of tools and technologies to fulfill its vision.
This combination may vary from one vision to another. That’s why working a people digital readiness within a company is essential. Having an excellent digital culture and being ready to test, understand and play with new technologies is a must-have before starting any Digital transformation process.
Remember, anyone can learn anything digital.
Digital transformation can encompass all kinds of technologies. These technologies may include, but are not limited to:
IoT (Internet of Things):
Any object involved within the production process can be connected and continuously deliver reliable and exploitable data.
Integration of the concept of real-time:
No need to wait for updates that will be made after a slow data collection.
Any member of the team can connect from any place and work flexibly.
All data will be collected, stored, analyzed, and interpreted.
The idea is, of course, to understand the current results delivered by the data and use them but also to make predictions and anticipate future results as well.
Still, even if a company succeeds in all those projects and learns how to use those technologies, there is so much more left to do regarding the User Experience, the products, and services.
In all cases, we should focus on the outcomes, not technology.
To archive the expected goals, people are essential. They can help Digital Transformation succeed. No! Let me correct that: They are critical to the Digital Transformation success.
They can also turn it into a terrible failure. According to Mckinsey 70% of digital transformation projects fail, most often due to resistance from employees.
I think that every Digital Transformation should start with transforming the company’s culture and people’s mindset beginning with top management.
Digital Transformation Risk
Every project faces difficulties and incurs some risk of failure; this is no news. It’s clear that due to the transversal aspect of Digital transformation, the risk is everywhere at every stage.
Many researchers found that less than one-third of Digital Transformation efforts succeed. This is a HUGE risk for any company to take.
Any reasonable individual will just drop out of a project with such high failure risks.
But let’s talk for a second about the risk of Non-Digital Transformation. Chances are they are higher and more fatal!
The real enemy of Digital Transformation!
We, humans, fear what they don’t understand, predict, and control! It’s just the way we are.
How can we assume that an employee that has been achieving specific tasks in a certain way for several years (sometimes decades) will easily accept changing the tools, the process, and sometimes all of it, without resistance?
This is a no-brainer.
How can C-level managers not consider the human factor as a critical factor in the transformation process?
Don’t get me wrong. I am not talking about simply training people on new software, new digital tools ad new processes.
I am talking about people’s readiness to accept and support change. I am talking about people’s understanding of the “Why” of the whole project.
I think the “Why” is extremely important!
If we do not take the time to explain why we are transforming and how this is vital for the company, many employees will think that this is a “smart” way to get rid of them and replace them with machines.
They will then resist the Digital Transformation project making it more challenging and raising the failure risk exponentially.
For instance, AI is one of the technologies employees fear the most when it comes to Digital Transformation. All over the internet, you can find blog posts and articles claiming that people can lose their jobs massively because of AI.
Resistance and fear from implementing AI are a perfect example of how companies can fear automatizing operations and how employees are afraid of AI and therefore defend their current jobs.
To see how massive is that, all you need to do is Google “AI and job loss“, the result pages will blow your mind!
Some fears are entirely legitimate, and let’s be honest about it: many jobs will disappear, there is no doubt about it.
The thing is that this mindset completely blocs the Digital Transformation process. That is why I think that Digital Transformation should be first about people’s mindset transformation.
I do think that working on people’s digital readiness should be a preliminary step to any Digital Transformation project.
Part of this process should be:
- Explaining why Digital transformation is NOT a choice but a necessity to survive. Also, present the risk of disruption if the company does not transform.
- Explain the evolution of today’s and future consumer behavior and expectations.
- Present examples of companies that disappeared because of them not being able to transform on time.
- Emphasize how this will help the company be more profitable and create new products/ services and jobs.
- Explain that this change happened before and YES, some jobs disappeared and so many new appeared.
- Insist that this change will be accompanied by training and coaching; so that people do not fear technical complexity and provide psychological support to succeed all together.
- Show how the employees’ contribution is vital to the digital transformation project and how top managers cannot do it alone.
- Leverage insiders first. People who have been around for years (sometimes for decades)have intimate knowledge about what works and what does not in their daily operations. Explain, educate, and welcome everyone on board.
I think that unspoken and unaddressed fears are among Digital transformation’s worst enemies. No surprise that worldwide we have such a high failure rate. Most people believe Digital Transformation projects are technological projects while it’s more of a business project with a high social component.
Telling the right, truthful story about the “Why” of Digital Transformation can significantly increase the chances of success. Also, facing people’s legitimate fears and not denying them is key to transforming the workforce from Digital Transformation-phobes to supporters.
So know your enemy and get the right tools to fight it right before starting the fight!