By AMIYA SATPATHY, Partner (India)
A manufacturing firm’s digital transformation programme was hitting a snag. Despite the effort and careful planning done to find the right digital solution, adoption was slow during roll out.
One of the primary reasons was with the senior leadership team. Some of them were reluctant to experiment with something new, and, as a result, were not participative in the digital transformation. It goes without saying that the lack of leadership involvement certainly sent the wrong message to the rest of the organisation.
This is an example of one of the most overlooked and undermanaged elements of digital transformation programmes – the “human factor”.
Without buy-in at all levels of a company, employees often resist change or fail to fully adopt new, digital ways of working. This results in many organisations not being able to reap the full benefits of their digital transformations.
To nip this in the bud, leaders must answer the following questions:
1. Do we fully understand the need for change?
Are your business challenges clearly identified?
Aside from classical strategic concerns, such as service and/or product offerings versus the competition, many business leaders struggle to clearly describe their digital strategy.
Without a digital strategy, digital transformations may not take shape, get procrastinated on, or if they do, end up poorly aligned with the organisation’s real needs.
Digital strategy formulation involves both external analysis and internal analysis, as well as serious consideration for tactical issues.
A starting point is to clearly outline the issues across all areas of the organisation in at least three dimensions:
External Analysis, which involves understanding:
- What evolving technologies are relevant and where are competitors on this landscape?
- How prepared is the organisation to receive new technologies? For example, is the required IT infrastructure (both hardware and software) in place?
- When would be the best timing for new digital ways of working to be introduced?
Internal Analysis, which involves the usage of existing technology:
- To what extent are process still manual in nature? For example, are requisitions still triggered manually?
- Is technology used to manage resources? For example, is planning still largely a manual/reactive process?
- How well do existing technologies work together? For example, are employees logging into and out of different systems, are reports generated manually in Excel by exporting and combining data sources?
- How well is technology used to manage performance? For example, do we have visibility on our sales force efficiency?
Tactical Analysis, which involves the tactical issues bogging down an organisation:
- How is the digital accountability within functions and across the whole organisation?
- How good are the digital competencies of employees?
- How is morale among employees? How willing are they to change?
2. Do we have a clear vision of our digital future?
How will the digital solutions solve the organisation’s challenges?
Once the analysis is complete, leadership must pursue a structured evaluation to arrive at what digital transformations are necessary to address genuine business needs.
Leadership must answer questions such as:
- How will the available digital technology solve the organisation’s problems?
- What are the expected Returns on Investment (ROI)? Is there visibility on the ROI?
- Are the digital solutions primarily used to prevent an unwanted outcome? How accurate and reliable will they be? When problems are being solved with the new digital solution, even simple ones, hope and confidence will follow. Fear and skepticism will be reduced.
Digitalisation benefits must be clearly articulated to everyone. Doing this will help your digitally averse people gain confidence in the digital transformation programme.
3. Who are your ‘digitally averse’ people?
Is it the whole organisation or just the senior management team? Is this problem particular to a department, such as manufacturing, sales, or finance?
Typically, any new idea divides people into one of these groups:
- Enthusiasts (15%)
- Undecided (70%)
- Skeptics (15%)
In an oil and gas company I worked with, although the technology team was convinced of the benefits of a digital transformation, the operations team were sceptics. By identifying the source of resistance, we were able to develop appropriate strategies to transform them from resisters to adopters. To turn this around, we over-communicated the benefits of the programme and shared proofs of concept and success stories.
4. Are you managing the change process?
Any organisation that has ever attempted a transformational journey would agree that the success of transformation was a function of both technical and tactical actions.
Organisations are generally geared to focus on the technical aspects and neglect the tactical ones, such as upfront communications and identifying and enforcing responsibilities and accountabilities in the new digital ways of working, starting with the leadership team.
With a digital strategy in hand, leadership plays a vital role in involving, promoting, inspiring and engaging everyone in the organisation.
Although leaders understand the importance of “solution acceptance”, many do not understand how to bring about a high level of acceptance. I often hear leaders say that to bring about acceptance, more training is required. In my opinion, this is only partially true. Many organisations spend millions training their employees, yet digital adoption rates can still be very poor. To truly bring about acceptance, organisations must think beyond just training. For example:
- Digital deployment involves having an action plan attributed to individuals (not teams) so that there is clear-cut accountability.
- Programmes should have evaluation mechanisms that quantify and track digital adoption. These should be published to highlight the leaders and laggards.
- The digital journey must also have continuous governance – senior leadership’s time and attention must be preserved all the way through to full adoption. When senior leaders fail to engage, programmes slow down and may even stop.
5. Are you celebrating success?
A successful digital journey should result in significant benefits. However, many organisations fail to celebrate – no feedback can be worse for morale than negative feedback, and of course, positive feedback is best.
A lack of celebration may impact morale and depress innovation. This may eventually push high contributors away and discourage fence-seaters from participating in future efforts.
Significant contributors to the change, or the users demonstrating phenomenal results, should receive due praise and thanks.
In one of my projects, the company decided to give 50% of the financial benefits back to the employees. This generous act resulted in phenomenal enthusiasm from the workforce and outstanding growth for the company in subsequent years.
Bringing about digital change requires careful planning and execution – involving and supporting the workforce throughout the journey. Digital transformation done well brings about financial and operational improvements, as well as increased employee morale – all ingredients for future success.
* We take client confidentiality seriously. While we have kept the brand anonymous, the results are real.