Succeeding with Digital Transformation: It’s a People Challenge

Photo by Markus Spiske on Unsplash

Nine times out of ten, when the executive team announces that the organisation needs to digitally transform in response to new challenges and opportunities, what the organisation tends to hear is, “We are going to take our existing ways of working and make them digital.” In other words, what exists is going to be made faster/better/cheaper with digital technology.

If you were to approach digital transformation in this way, you are using the past as a reference point for the future. When that future is changing rapidly in complex, uncertain, and ambiguous ways, you set yourself up for failure. When this approach is then also combined with a belief that digital transformation is something the IT department will do for you, the chance of achieving any semblance of strategic success by any critical time horizon instantly becomes slimmer than none.

Vision

One reason so many digital transformation strategies are setup to fail from the outset is, because there tends to be no clear and meaningful vision that people throughout the organisation can use as a shared North Star. A vision of becoming an data-driven company that happens to fly aircraft, develop medicines, or make beer is not only too abstract to be practically useful, it is also not compelling as it doesn’t resonate with the company’s reason d’être.

When digital transformation strategies like this are forced to commence, the objectives tend to become undeniable truths:

• Reduce costs
• Improve margins
• Reduce time to market
• Get closer to customers
• Become more sustainable

In my experience working with a wide variety of client organisations, the time is usually not taken to translate these high level objectives into specific statements that describe the desired end state in tangible terms and that are related to particular pain points or opportunities. Under pressure to make progress, the jump is typically quickly made from undeniable truth to the selection and development of technical solutions.

Obstacles to unlocking value with technology

Technical solutions, regardless if they are digital or physical, only create value when they are used. Getting to that stage, at scale, is a challenge many digital transformations encounter. Intended users will give a variety of reasons for not using the technical solutions provided:

• Not having enough time and resources to implement the necessary changes
• Having to deal with more pressing operational issues first
• The technology is not yet 100% reliable
• It is not suitable for their unique situation

What digital transformations run into at this stage, which can last for years, is culture: the way how things are done around here.

Culture

Culture is shaped by the beliefs, values, and goals that guide daily life of a group of people. The more people are exposed to the cultural behaviours that are relevant for and characteristic of the group, the more those behaviours become part of people’s cultural identity.

What this means for digital transformations is that they are viewed by people through their group’s cultural lens. When viewed through that lens, digital transformations need to pass two hurdles:

1. Does this fit with what we already believe? If no, reject.
2. If yes: Does it work and, more importantly, does it work for us? If no, reject.

People challenge

An example of this my colleagues and I experienced a few years ago when working with a major pharmaceutical company. The company had invested a small fortune in their digital transformation strategy, purchasing and developing many state of the art data and analytics capabilities. Some of these advanced technical solutions had proven to be able to make a 10X difference in the efficiency and speed with which more effective medicines could be brought to market. They were focused on the core of the company’s purpose. Yet their adoption and use remained stubbornly at 13% of the intended user population.

The reason for the low uptake of the advanced technologies had nothing to do with the ability of the intended users to understand the need for becoming more data driven or how to use the technology. It had to do with their cultural identity.

At this company, experts progressed up the corporate ladder by becoming a better, more highly recognised expert. When they were confronted with the digital transformation strategy, they understood why it was necessary but they also perceived it as a threat. From their perspective, the ‘algorithm’ would be able to do whatever they did as experts infinitely faster, better, and cheaper. If they were to allow that to happen, they believed it would significantly harm their reputation, their position, and their remuneration. Going big on data and digital would go against what they believed and valued, so they rejected it. Whenever necessary, they would talk the talk, but they wouldn’t walk the talk if they could get away with it.

Break through the hurdles

To break through the cultural identity hurdles that stymie so many digital transformation strategies, you need to change how groups feel about something they believe to be true. That is, you need to challenge the premise that shapes their beliefs and perceptions. You do that by means of a risk-free experience in which people can explore for themselves why the transformation matters, what it means for them, and, importantly, how it enables them to become a better version of themselves.

This experience can come in the shape of a custom-made immersive, role-based business simulation, which we created for the pharmaceutical company, an engrossing story told by an inspiring speaker, a well-written book, or a remarkable video.

By means of an immersive business simulation, based on their own organisation and context, the experts at the pharmaceutical company experienced that data and digital tools were not a threat, but a means to enhance their expertise and reputation. When this shift in perception and mindset had occurred, adoption rates went up quickly.

Not only that, existing ways of working were redesigned for greater impact. Rather than a technology push, which is how the company had initially approached the digital transformation, it became a business pull. Having experienced a possible future, the experts became intrinsically motivated to engage relevant stakeholders to redesign processes and challenge constraints to realise the desired benefits that data and technology could help to unlock.

Ground digital transformations in cultural identities to accelerate impact

When you ground a digital transformation in cultural identities, ensuring that these are closely tethered to the organisation’s purpose and reason d’être, and give people the opportunity to experience and explore how it enables them, and the company, to become a better version of themselves, progress is made significantly faster than any appeal to logic ever can.

It also requires less effort, time, and resources to realise the digital transformation, because the approach intrinsically motivates people to make it their own. There will still be resistance to change from some quarters, but it won’t last as long as usual due to peer pressure and excitement. Working in digitally enhanced ways and making data-driven decisions becomes:

1. Obvious
2. Attractive
3. Easy
4. Satisfying

That means, you will be leading a digital transformation in accordance with the four Laws of Behaviour Change, rather than against them.