Achieving your vision of a Digital Transformation business requires not only the right set of tools but the right expertise & guidance to drive your processes for the best results.
Businesses that fail to fully understand the nature of the impact of digital transformation on their organisation, fail to achieve significant benefits. Around the world, organisations are finding it challenging to match the pace of digital transformation, especially the ones that are limited to traditional operational methods.
The organisations that are driving at the forefront of digital and adopting new operating models are recognised as leaders and are achieving significant improvements.
However, the simpler it sounds, the more challenging the execution is.
- More than 50% of digital transformation efforts failed to deliver completely in 2018. (Forrester)
- 70% of digital transformations fail, most often due to resistance from employees. (McKinsey)
- Only 16% of employees feel their organisation’s digital transformations have improved performance, their experience and are sustainable in the long term. (McKinsey)
Despite more than 50 years of history and numerous methodologies, operating models, advice and books, ICT projects keep failing. Organisations attempting to transform their business models using digital capabilities are suffering the same fate as their predecessors. Estimates from various sourcing indicate that even the introduction of agile techniques over 20 years ago, has had no meaningful impact on the overall failure rate.
My top list of things that can impact the success or failure of an initiative are:
Leadership Mindset
Not having the right digital mindset is often the first reason digital initiatives can fail. People can be averse to change, but leaders need to understand their role in helping bring about the mindset change required for successful transformations. Being a visible role model, in both culture and process, demonstrates your commitment. Simply standing up and saying you support an initiative isn’t enough, people need to see the embodiment of the change you are requesting of others.
Executive leaders also need to make choices, to focus on activities for a successful transformation. You will notice I didn’t say “make decisions”. Many leaders are very good at making decisions, but they struggle to make choices, there is a difference.
Another mindset that drives digital transformation failures is when the organisation views IT as a simple support function and cost centre. Embracing an opportunity mindset can unleash the power of Digital capabilities, enabling technology to become an engine for value generation.
Culture
An organisation’s culture can make or break a transformation initiative.
Culture change is at the heart of digital transformation, and cultures that are going to be more successful with digital transformation are those that embrace change, learning and collaboration.
Talent
Failing to acquire the appropriate talent to drive transformation initiatives is another major factor why digital transformation initiatives may fail. Having the right talent builds confidence in the transformation and reduces the likelihood of failure due to basic knowledge gaps.
Digital transformation is a major people change activity, requiring staff to learn new ways of working. Expecting people to learn those new ways, while working to implement them, is unrealistic.
Companies also often fail to bring in people who have a digital understanding and experience implementing such transformations, concentrating on project governance. This assumes that success can be guaranteed if you can control the initiatives better.
Anyone who thinks they will be successful with all the same people, without coaching and support, is kidding themselves and that’s especially applicable for truly non-digital organisations.
Clear Goals
Digital Transformation initiatives in name only, without setting any clear business goals, is another reason many organisations fail. Organisations who understand how their transformation is anchored to their business strategy, are better placed for success. Linking back to the key areas of focus and what they are trying to achieve from the business point of view, provides a sharp vision for the initiatives. There can be no separation between an organisation’s Digital goals and its business goals.
Not providing a clear line of sight back to the organisation’s business goals means your initiatives will become technology focussed stovepipes, with people going in lots of different directions; there will be no alignment, leading to failure, with a significant increase in operating costs.
Without clear goals organisations end up doing technology for the sake of technology, which has always been a bad idea.
Technology
The tendency today is to use agile principles and break work down into smaller digestible chunks. This is leading to many digital transformation projects, focusing solely on stovepipe technologies, losing the organisational interoperability dividend. Organisations that can take a holistic approach to technology, considering the entire stack, have been shown to deliver better outcomes at lower costs. It also ensures that security and privacy requirements are considered from the start.
understanding how solutions need to interact and how data can be shared for maximum benefit will mean they can be designed with that in mind, rather than retrofitted later, at higher costs.
Agile, fail fast attitude
The Agile, fail fast mantra often associated with digital transformation, when not executed well, can be detrimental to success. Adopting a fail-fast mentality, often means organisations do not provide enough room to succeed or for learnings to be adopted. Failing fast means being able to learn when you have gotten it wrong and adjusting your path accordingly.
The nature of agile is such however that its methods, focussing on transparency, short communications cycles and incremental delivery rarely fail to show some benefits over waterfall models. That creates the impression that the organisation is on track for success, but the true impact won’t be felt until much later
Instead, organisations should focus on a learning environment and how their initiatives will adjust considering that learning.
Next Steps
Our people and culture remain key to achieving digital success. Understanding the leadership and cultural attributes required to support your transformation will enable you to plan accordingly. If you don’t currently have them, organisations should identify sources and delivery models to set themselves up for success.
If you would like to talk more about the challenges to Digital Transformation or how I could help with your initiatives, please contact me via the link below.