The concept of digital transformation is not new, but it is becoming more relevant as enterprises and startups look for ways to evolve their businesses. Digital transformation is moving to the forefront of everyone’s minds — and for good reason. From incorporating a faster and more efficient fleet-tracking technology to application delivery, digital transformation has become a permeating voice in talking about taking businesses to the next level by fast-tracking their time to market, reducing optimisation costs, and creating a fluid business model.
Why is Digital Transformation Worth Talking About?
When examining an enterprise structure from a bottom-up perspective, it is easy to see that happy consumers are the foundation of any winning empire. Over the years, consumer appetite for service has grown so exponentially that only a few industrial titans such as Amazon, Google, and Apple can satisfy it.
Especially for urban consumers, the thought of waiting too long or travelling too far for a product is extremely off-putting. In a Google Consumer Survey conducted by Arise, the maximum wait time tolerated by consumers on the phone in 2014 went from 13-minutes to an astounding 2-minutes or less before they terminate the call. This attitude isn’t going away — and in all honesty, why should it?
When it comes to changing how a company functions every day, both leaders and employees are bound to face challenges. However, in the wake of digital transformation, change is necessary. If employees don’t keep up, they will be left behind and chances are digital transformation will fail. As mentioned in our previous post, 4 Pillars of A Successful Digital Transformation Framework, CMOs, CIOs, CTOs, and CEOs all have a role in leading the digital transformation. It is their responsibility to sell the transformation to employees. So, what can leaders do to ensure their employees are able to keep up?
1) Create a Dialogue
No transformation can be successful without communication. Employees tend to be resistant to change when it is forced upon them. With this in mind, it is key to create a dialogue with employees and keep the floor open to discussion. Leaders should actively ask employees what they’d like to see in terms of digital improvements.
Several executive members need to be champions of digital change to foster company-wide adaptation. After all, change is a team game. The open dialogue should start from the top and involve every level of employee. The CIO should take a major leadership role in forging digital-based alliances across the entire enterprise. The CIO also needs to effectively bridge the gap between the actual implementation of technology and the workplace culture and demands. Even after the transformation process is underway, c-suite executives must keep lines of communication open, constantly asking employees for feedback. All the while showing employees that they’re also committed to offering their own feedback and showing employees that they are also adapting to the implemented digital changes. In the initial stages of change, company-wide communication is of utmost importance.
2) Invest in Training
Employees first and foremost need to understand the “why” behind the digital change. “Let people understand the reasons for the change, and make sure they have a clear picture of what will improve when they get there,” says Dr Daniel Cable, professor and chair of organisational behaviour, at London Business School.
Still, just an understanding and a bold vision aren’t enough to thrive as a digital organisation. On the contrary, organisations that are winning the digital transformation race put a lot of effort into fostering a culture of change. This involves viewing setbacks and obstacles as integral to success and quickly dealing with failure to improve.
Further, these companies invest in new capabilities and make sure employees develop the skills to keep up with a fast-paced and dynamic environment. It is critical to implement a thorough training program for employees, to learn about the direct and indirect changes will bring. This leads to a mastery of relevant skills and reduces frustrations during times of trouble. All employees, no matter which level they’re at or department they’re from should be required and encouraged to go through the immersive training program to drive adoption.
3) Allow Experimentation
For many employees, digital transformation involves moving out of the comfort zone. A culture where experimentation is allowed and even encouraged is comforting to those who are new to the digital game. Employees can then freely experiment without fearing the consequences of mistakes. Secondly, employees that can experiment often discover new and faster ways of doing everyday tasks, increasing efficiency and likely productivity.
4) Encourage Collaboration
Online and offline communication can easily be unified keeping employees connected through their own devices. This truly creates the “anywhere, anytime” access to company documents and tools that have become so commonplace in our daily lives.
Digital connections often help break down generational gaps and bring employees of different ages together. New digital communication fosters collaboration in departments and across the organisation. Ultimately, the digital transformation should feel less like “technology” and more like intuitive ways to complete tasks at hand.
5) Improve Employee Involvement
Embracing digital transformation is more easily achieved through increased employee engagement. With digital advances, employees can reach consumers easily and directly, while most likely staying ahead of the competition.
Consider the example of company Connected Home, a unit set up by British utility company Centrica to build “smart home” appliances. Their team was built to work like a startup, with a focus on user research, feedback and a commitment to lean operations. This approach helped Connected Home’s Hive “smart thermostat” device become a market leader in just a few years. Gaining these sorts of insights that would push a company to the top required a major shift in organisational norms, allowing employees to be brought closer to consumers.
Often, older employees struggle with digital transformations, but their insight and experience are invaluable. By improving internal employee engagement too, employees can feel more valued and fulfilled, making them more open to change.
Engagement drives adoption, but digital transformation too can drive engagement. In fact, 72% of respondents to a recent survey reported that flexible work schedules positively affect levels of employee engagement. And, in the digital age, flexibility is easier than ever to implement. Employees can work remotely, use their own devices, and utilise digital tools to interact impactfully with consumers and each other. They are more likely to appreciate the tangible benefits of digital transformations and adapt to the same.
Ultimately, digital transformation isn’t just about technology. The way a company structures itself, encourages and fulfils its employees, invests in training and fosters a workplace culture that is amenable to quick change all play an important role in successful transformation.
Transformations are hard and digital ones are harder
Years of research on transformations has shown that the success rate for these efforts is consistently low: less than 30% succeed.
This year’s results suggest that digital transformations are even more difficult. Only 16% of respondents say their organisations’ digital transformations have successfully improved performance and also equipped them to sustain changes in the long term. An additional 7% say that performance improved but that those improvements were not sustained.
Even digitally savvy industries, such as high tech, media, and telecom, are struggling. Among these industries, the success rate does not exceed 26%. But in more traditional industries, such as oil and gas, automotive, infrastructure, and pharmaceuticals, digital transformations are even more challenging: success rates fall between 4 and 11%.
Success rates also vary by company size. At organisations with fewer than 100 employees, respondents are 2.7 times more likely to report a successful digital transformation than are those from organisations with more than 50,000 employees.