Companies are eager and ready to invest in digital transformation strategies, but are they achieving results? The numbers so far indicate that the answer may be a resounding “no.”
Several studies report that up to 80% of transformation efforts fail to achieve their intended goals. Another study polled senior executives and found that 50% feel their company is not successfully executing digital strategies. What’s causing this?
Most organizations do a good job at defining and preparing a digital strategy, analyzing the technology solutions, and selecting the infrastructure and technologies to support the transformation.
Where companies tend to fall short of achieving their digital transformation goals is not realizing that the transformation requires “a new way of working” across the organization. This means:
- Leaders must lead differently
- Behavior change is required at all levels
- Organizational culture must attract, retain, and up-skill the right talent
- Functions must build trust and see the value of partnering across the organization
True digital transformation requires an intense focus on executing the digital strategy and creating a culture that encourages, supports, and reinforces the “new way of working.”
Strategy Execution as a Driver of Digital Transformation
Our research and experience in working with companies across industries has uncovered that there are four key elements for successful digital strategy execution: direction, competence, opportunity, and motivation.
Without direction, competence, and opportunity, leaders and employees can’t execute the digital strategy. Without motivation, they won’t execute the digital strategy.
Is your organization’s digital strategy execution achieving results? If not, ask yourself if your organization provides:
- Direction – so everyone understands what new ways of working are needed and why
- Competence – the knowledge and skills to work in the new way
- Opportunity – the resources and tools needed to work differently
- Motivation – encouragement and reinforcement to individuals for working in new ways
Culture as a Driver of Digital Transformation
Culture can make or break your digital strategy. At ALULA, we define culture as patterns of behavior that have been either reinforced or discouraged by people, systems, or processes over time. No two cultures are the same, and an organization’s digital culture can be best defined by the people within it.
Our research indicates there are six qualities of a digital culture. Three of these qualities are foundational and must be present throughout the transformation: innovation, collaboration, and agility. To accelerate your digital transformation, the following three qualities must also exist in the culture: customer centricity, courage, and data acumen.
How do you know if you have cultural issues that may be placing your digital transformation initiative at risk? Here are some of the most common cultural challenges:
- Leaders are not leading the change and ensuring employees are adapting
- Leaders lack experience and awareness of new technologies and are concerned or reluctant to make critical business decisions that rely on them
- Ownership of the transformation resides in IT rather than cross-functionally at the most senior levels
- Decision-making is cumbersome, and decisions are often made at too high of a level
- Employees are not making and taking ownership of decisions
- Fear of control: leaders fear losing control, fear data transparency, and fear how employees will use expanded technology capabilities
- Difficulties with attracting “digital natives” to more traditional company cultures and current talent that has difficulty imagining a digital world
- Many deeply embedded processes, policies, and approaches that are difficult to navigate and change
- Organizational change is slow and sometimes not sustained
- Initiatives are often cascaded down the organization, and employees don’t have understanding or involvement early enough
The Role of Behavior in Digital Transformation
Digital transformation completely changes the way an organization does business. The shift involves new technology, revised processes, and new management systems, to name a few changes.
Technology strategy is relatively straightforward, but executing the strategy and creating a digital culture is more difficult. Helping everyone in the organization, from the C-suite to the frontline, work in a new way requires every employee to think and act differently. This requires new behaviors.
If you are starting your digital transformation journey, or if your transformation is under way and falling short, invest the time and focus on planning the strategy execution and examining your culture. Digital transformation is complex and requires a tremendous amount of change, energy, and courage.
Don’t become another statistic of a strategy that did not get the business results needed. Spend the time up front and throughout the journey to get it right.
Take our complimentary 10-question Digital Transformation Readiness Assessment. You’ll learn in five minutes how prepared your organization is for digital transformation.