Digital transformation is top of mind for many organizations, large and small, these days. However, knowing exactly what digital transformation means to a company and its leaders can be fuzzy at times. The complexity of the needed transformation can be daunting, and the path to realization of a digital transformation strategy can be filled with false starts and resistance.
So, what is digital transformation? At the core, it’s the transformation of a business, including its processes, systems, and people, with a focus on applying diverse, innovative technologies to business operations. The goal is seemingly simple: leverage technology to achieve better business impact and continuous business optimization.
While this might sound like a natural progression for business today, many digital transformations fail. There are a number of factors that could lead digital transformations initiatives to fail. In this blog, we’ll talk about some of the most common reasons.
1. There is a lack of leadership alignment on the digital transformation strategy.
Initial approvals of a strategy and related resources are often interpreted as full alignment around the strategy at the executive level. However, this isn’t always what the approval is meant to represent. Alignment often diminishes over time, and organizations sometimes fail to recognize that misalignment until it has a negative impact on strategy execution.
TIP: Set up recurring alignment check-in with leadership throughout your transformation planning and execution designed to let leaders speak openly about their perspectives, level of alignment, and how to gain or maintain alignment going forward.
2. The business case for the transformation is not accepted by key stakeholders.
Similar to a lack of buy-in regarding strategy alignment, if key stakeholders don’t agree on the value of the business case for the digital transformation, those stakeholders will likely resist some changes necessary to execute the transformation down the road.
TIP: Ensure that you know what’s important to your key stakeholders and present your business case in a way that shows the value the stakeholders will get from this transformation.
3. The organization doesn’t have the right people on its transformation team.
A digital transformation requires very specific expertise, like deep technology or change management expertise. Repurposing existing resources may seem like a good idea, but you will likely not be able to support this type of complex transformation successfully.
TIP: Spend the time up front to carefully identify the skills and capabilities you will need for the transformation, and don’t launch until the essential resources are in place.
4. Expectations are unclear on how leaders should lead and support the transformation.
Digital transformation might be viewed as something owned by a particular department or function in an organization. For example, it might be expected that transformations are lead by the Chief Technology Officer and the Chief Transformation Officer. Instead, for a transformation to be successful, all leaders at all levels need to possess change leadership skills. They also need to know what specific leadership practices are expected from them to support the execution of the strategy day to day
TIP: Leverage leaders at all levels to help insure digital transformation is a success.
5. Employees are unclear about their transformation expectations.
Often, employees don’t receive sufficient communication early on in the transformation process and throughout execution. They need to be told what to expect from the change, how it will benefit them, how their day-to-day work will change, what to do about barriers, and what to expect from their direct leaders. If this information isn’t communicated at the right time of the transformation, buy-in will likely suffer.
TIP: Communicate the ‘what’, ‘why’, ‘how’, and ‘what’s next’ to employees early on and throughout the transformation.
6. There is a lack of reinforcement for positive change.
In any transformation, employees and their leaders are ultimately asked to do something differently from what they’ve done before to support the strategy execution. One of the biggest barriers to successful execution is the lack of built-in reinforcement strategies for employees and leaders when they do what they’ve been asked to do. Thus, without reward or incentive, it’s hard to motivate teams to change.
TIP: When planning digital transformations, spend time planning how you will reinforce people for adoption at all levels in the most efficient, impactful and sustainable way.
7. The organization is too rigidly focused on short- to mid-term plans.
Getting to a solid strategy on which key stakeholders align is critical. But once the strategy is set, it’s important to realize that it shouldn’t be set in stone. Data coming from both external and internal sources may indicate the need to change the trajectory of a current path. Organizations need to demonstrate constancy of purpose, yet also be agile enough to adjust strategies based on sound data.
TIP: Create ongoing opportunities for key stakeholders to review all available internal and external data points to ensure the strategy still fits the purpose and moving in the right direction.
Is digital transformation on your organization’s agenda or already underway? As you start the process or even if you’re in an advanced stage of the transformation, consider the points above. When you’re aware of common pitfalls and reasons for failure, you’re better equipped to avoid them by proactively planning and addressing them.
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