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  • Ian McCain

70% of Digital Transformation initiatives fail to meet their business goals?


 

Digital Transformation has become quite the buzzword lately, and for good reason. Conceptually it stands as a beacon of progress and highlights an organizational commitment to modernization and efficiency, and yet a significant number of studies (McKinsey, BCG, Bain & Company) highlight that 67% - 90% of these initiatives fall short of their intended goals.

Gulp... 67%-90% fail?!?! That isn’t some tiny anecdotal sliver on the pie chart, it’s the majority of the pie. So, this begs the question. Why? Why do most Digital Transformation efforts have the same odds of success as a midway carnival game? Why would a process designed to improve visibility, efficiency and capabilities maintain such a significantly high failure rate for many organizations?


It may seem like a paradox, but it is one we can decipher, and it all relates to the most critical piece of the puzzle, People.

 

The Pitfall of Tool-Centric Approaches

First and foremost, we must establish that success in Digital Transformation hinges on more than just selecting advanced tools; it requires a thorough understanding of the human element, an organization's corporate culture, and a meticulous evaluation of specific business processes.


In the pursuit of Digital Transformation, organizations will often place a disproportionate emphasis on selecting cutting-edge tools. While technological innovation is crucial, the misstep that occurs most often is the assumption that selecting the "perfect product" will solve all the process inefficiencies and woes. Many organizations view the feature list and functional capabilities of a product and imagine that this new system will simply be plugged into a business’ operations with the ease of connecting a new USB mouse into a PC – and that things will just start working.


This mindset ignores a rather obvious fact, people aren’t computers. We don't all use the same standardized mental operating system. Failing to account for this very real nuance, means that organizations will often not adopt the holistic perspective necessary for a successful transformation. Choosing tools without considering the human factor in the processes is the key ingredient in a recipe for failure.

 

Human Dynamics: The Cornerstone of Success

The success of Digital Transformation pivots on the human element. Businesses are made up of people and we are all inherently resistant to change. To quote Garth from Wayne’s World “we fear change.” No person, in any job role, is naturally excited to embrace a fundamental disruption to how they perform their work.


Change is scary at an individual level, and can have a compounding effect when introduced at organizational scale. Coupling our natural reluctance to change with inadequate training creates a lack of stakeholder buy-in and frequently leads to less-than-ideal results for any Digital Transformation effort.  By neglecting the human element and failing to consider the benefits of comprehensive training, businesses often create a disconnect between technology adoption and employee engagement.


For Digital Transformation to be successful, organizations must address the human dynamics at play, and recognize that success is not just about tools, but about how these tools integrate into the daily work lives of individual users. Creating awareness through slow and consistent education will help break down the barriers of resistance and help transition reluctant end users into internal advocates who can clearly picture themselves working within the transformed environment.  


Tailoring Evaluations to Unique Business Processes

Digital Transformation is a rather broad catch-all term and there is no “off-the-shelf” one-size-fits-all solution for businesses. Every company operates with its own unique set of processes, workflows, and cultural dynamics. Failing to conduct meticulous process-specific evaluations of departmental functions and tasks can lead to the adoption of less-than-ideal tools that do not align with the unique goals of the organization, or ideal tools that simply do not mesh with the practical reality of current operations.  


It is imperative to identify pain points, bottlenecks, and inefficiencies within existing processes before selecting technology. During this process it is also important to understand the desires of the stakeholders that are impacted. This process evaluation helps to identify what can and should be achieved and helps organizations to better architect the appropriate internal change management and messaging needed to gain stakeholder buy-in.

 

Shifting the Paradigm: A Holistic Approach

To overcome the challenges of Digital Transformation, businesses must pivot toward a holistic approach tailored to their specific needs. This means understanding what aspects of operations will be impacted by Digital Transformation and what quantifiable goals can be established to measure its success.


Start by Aligning digital initiatives with the overarching goals of the business and identify the impact of these changes to existing work processes. Then evaluate how company culture should be considered when planning how to implement these initiatives. Establishing a clear vision and communicating that story to the broader organization ensures that technology serves as an enabler for the company's mission.

 

Human-Centric Design for Stakeholders and Staff:

Prioritize stakeholder and employee experiences, involving them from the outset. Equip them with the skills and knowledge needed to embrace Digital Transformation efforts to help shift their default mindset from “resistant to change”  to “excited for the future.” Involving process owners and the "boots on the ground" staff will provide needed context for inefficiencies and foster employee engagement on improvement. Taking this human-centric design has been vital to the success of our Digital Transformation customers. It is the difference between point in the direction your row-boat needs to be going, and having every person in the boat rowing in sync with each other.

 

Process Optimization in Workflows:

Conduct in-depth evaluations of existing business processes. I have worked with many organizations over the years and I find that the evaluation of existing processes is a significant opportunity dig in and explore not just the mechanics of how a process works but why {insert business process} is done a certain way. Often, this "Why" questioning path will uncover numerous operational processes actively being utilized that have no clear origin and can be potential paths for improvement. Sometimes, it will uncover process steps that are being performed in maintenance of an obsolete purpose, which is actually adding additional work steps for end users with no benefit.


As you review the your internal processes make note of the elements where the big "W" why to the process is identified as “that’s just how we have always done it” or “that’s how it was done when I started.”  This will often help identify areas for potential improvement, automation, and optimization and further help to inform your goals and technology choices.

 

The Importance of Change Management:

The most successful Digital Transformations are often incremental in nature. They start by addressing a specific departmental or process need, and throughout the digital transformation process, will expand into more areas of functionality.


To be clear, Digital Transformation is an ongoing journey of improvement, it is not a specific destination. Embracing this incremental strategy and incorporating it into the culture of the organization allows for more effective integration of feedback from stakeholders and helps to further reduce the potential resistance from all stakeholders allowing for the development of a robust change management strategy which can foster a culture of continuous improvement.

 

In conclusion, the challenges in Digital Transformation underscore the need for a paradigm shift. Success lies not only in adopting advanced tools but in the interconnected relationship between technology, people, and processes. Businesses that take the employee experience into consideration and embrace this holistic approach will not only navigate the challenges of Digital Transformation but will emerge as leaders in an era defined by innovation, employee and customer satisfaction, and sustainable growth.

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