Where businesses go wrong with digital transformation

Across all industries, digital transformation is not a choice but a necessity. But the brutal truth is that at the outset of a digital transformation programme, the odds are stacked against successful delivery.

Up to 84% of digital transformation projects fail to deliver their expected benefits equating to colossal missing ROI, as well as the collateral damage to business strategy, shareholder value and team morale.

Why do so many businesses struggle with digital transformation?

  • A lack of clear strategy: Digital transformation must be set in the context of a clear corporate strategy. But the role of transformation in driving strategy is often poorly defined.
  • Ungrounded, uninspiring leadershipStrong CEO and board-level commitment is required, alongside a clear vision and investment in building cross-functional support. But the transformation agenda is often siloed within specific business functions and framed in an unclear or uninspiring business vision.
  • Unwillingness to adapt: The transformation goal must be defined as the adoption of a new, digitally-enabled, business model and culture which itself is dynamic and continuously evolving. But the transformation goal is often defined as the implementation of a new system, process or operating model which is static and does not evolve.
  • Focusing on launch: Emphasis needs to be placed on supporting the critical post-launch adoption phase when all program benefits should be realised. But disproportionate focus ends up being placed on the development and delivery stages. Programme resources and knowledge dissipate rapidly when post-launch testing is complete.

Such factors are already well understood and can be managed, yet a huge proportion of businesses struggle to do so. Here’s the one vital thing that many organisations overlook: even in technology environments, it is human emotions that primarily drive decision-making and determine engagement with change initiatives.

To enable successful digital transformation, programme leaders must understand the human dynamics at play at a deep level. They must also be expert at channelling these dynamics in constructive ways.

Some leaders simply do not grasp the fundamental importance of such human issues. Others do appreciate the value of such human insights but cannot readily access them because they are reliant on conventional approaches to stakeholder research and company culture change.

Traditional research, such as asking employees or customers for feedback, often doesn’t take into account the fact that most decision-making is non-conscious. This makes it difficult to understand the reasons for behaviour – and people tend to make things up when asked to explain themselves. It’s also a normal response to being investigated, especially when the problem we are being questioned about could be us.

With all that in mind, here are four recommendations for digital transformation programme leaders.

1. Remember digital transformation is fundamentally a human process

Digital transformation can be defined as “the process of embedding organisational change, leveraging digital technologies and business models, to transform business performance and competitiveness.” Enabling and sustaining such transformational change requires strategic investment in people – building insight into their core needs, feelings and motivations and offering support which enables them to flourish in a more dynamic, digital environment.

2. Listen like your life depends on it

Long before digital transformation projects derail, the warning signs can be there to see. But often a company’s cultural context conspires to prevent the red flags from being seen and acted upon. Strive to create an environment where realism is rewarded, not blind optimism. Nurture a culture of empowerment which enables bottom-up solution-finding.

3. Don’t believe what your stakeholders tell you (at least, don’t take it on face value)

Extensive psychological research has demonstrated that it is human emotions and non-conscious brain processes that primarily determine human behaviour. So, if you really want to understand your stakeholders, you need to understand their deep (and often hidden) needs, feelings and motivations.

4. Get clear then stay connected

Be absolutely clear about what it is you’re trying to transform. Remain connected to that ambition throughout your digital transformation programme.