11th May 2021
People are the source of your biggest problems with digitalisation — but they are also the key to solving them.
Businesses that never focused on technology before now accept the urgency of prioritising digitalisation. Organisations everywhere are accelerating the pace of digital transformation, and widening the scope of their digitalisation efforts. Yet a study by Forbes Insights reveals that a whopping 75% of executives have yet to see real benefits from digital disruption.
The kind of change that digital disruption entails is not easy, with companies facing a variety of known issues, legacy challenges and a rapidly shifting technology landscape. However, the main barrier stopping many companies from achieving their digital potential is not technical — it’s human.
The most challenging barriers to successful digitalisation at any organisation stem from innately human tendencies — such as resistance to change, the inclination to remain within a capability comfort zone and the struggle to manage stakeholder expectations and outcomes. Digital transformation is an exercise in change management.
Reluctance to change
Change is the one certainty in life, but it’s something that many organisations struggle with. According to McKinsey, employee resistance and inadequate management support are the main reasons why 70 percent of change programs don’t meet their goals.
Particularly in larger organisations, where departments are more likely to be siloed and cultures have become entrenched, new ways of doing things can be viewed with suspicion. Of course, any technology decisions that bring significant change must be assessed for possible risks, but no organisation can thrive by standing still.
The key to the success of digital transformation is organisational adaptability. To keep pace with the change that digital transformation drives, organisations need to be nimble — and cultural change is crucial creating that agility and adaptability. In fact, in a study of 40 digital transformations, companies that prioritised culture were five times more likely to achieve breakthrough results than those that overlooked culture.
Changing an organisation’s culture involves actively engaging with customers and partners to develop new solutions, rather than relying on what always works. It means information is actively communicated across the organisation by consistently reinforcing the message through all channels available. Teams are cross-departmental and collaborative, with team members empowered to make decisions within their sphere of expertise. When leaders highlight the importance of all employees to the organisation’s success, shifting an organisation’s culture to one that drives digital transformation is a much smoother process.
As the growth of digitalisation expands the gap between the skills available and the skills required, the World Economic Forum predicts that more than 1 billion people will need to be reskilled by 2030. Tech skills in areas such as Big Data, the Internet of Things and AI are among the most sought-after, but soft skills are even more important. Learning a new language is easier than developing the ability to adapt quickly to new situations, for example.
Talent shortages combined with a failure to invest in existing talent mean that companies often lack the mix of skills that they need to go digital. Furthermore, they frequently underestimate the skills and expertise required to execute an effective digital transformation. Successful companies focus on transformation leadership positions, appointing the best people with the greatest potential to lead the transformation.
These companies carefully review the roles and skills they need and either upskill existing staff or source roles externally. They also ensure that talent is managed actively, so that strong performers are rewarded.
Team members need to develop new skills and competencies, and certain functions may need to be outsourced. However, depending on external support for every new initiative is not a satisfactory solution for any organisation hoping to build a platform for reliable, ongoing success.
When embarking on digital transformation, it is difficult to ensure that everyone is aligned on objectives and outcomes. A lack of communication or mixed messages from leadership can leave people with completely different ideas of what is happening and how it will affect them. Leadership and alignment are the two biggest success factors in any project, and this is particularly true in any digital transformation.
Technological transformation is disruptive; it’s supposed to be. It shakes up existing processes and work practices and makes for more streamlined products and services that meet customers’ needs better. But if it’s not communicated the right way, it can cause unnecessary mayhem. There needs to be a common frame of reference for the organisation’s digital transformation strategy to bring stakeholders from business and IT teams together in a shared mission. Mission, vision and ambition are key to the cultural transformation that needs to accompany a digital transformation.
If people cause your digitalisation initiatives’ most intractable problems, they also provide the answers. By involving all stakeholders from concept to delivery and beyond, successful digital projects can avoid many of the human challenges that may arise.
Ensure a common understanding
At NearForm, we believe that every engagement should start with a diagnostic phase, a thorough look at the problem statement. This results in a clear, actionable understanding of the problem the end product needs to solve. Using our proven discovery engagement process, we work with our partners from the outset to develop a proper understanding of the project’s objectives and measurable outcomes. This kind of collaboration and communication needs to be in place from the start of the process to ensure that everyone is on the same page.
A shared sense of purpose instills a sense of ownership among all the stakeholders. By including everyone in the process from the start, it is easier to influence people of the value of the project and their contribution to it. With clear expectations and targets, everyone can work toward a common goal. As well as inspiring people with a shared vision for success, this also creates metrics that organisations can use to assess their progress.
Introduce change gradually
People may be suspicious of new ways of doing things that don’t seem to improve on existing methods. To encourage people to accept change, it is important to prioritise early success. By introducing new technology via a lighthouse project, for example, everyone can see positive results quickly.
Leaders need to be seen to embrace and encourage change to seed acceptance across the organisation. This may involve a cultural shift, which requires persistence and buy-in from the top down in order to succeed.
If change is introduced gradually and involves all stakeholders, the benefits should become clear. However, it is important to temper unrealistic expectations and offer avenues for genuine concerns to be heard and addressed.
Develop internal talent
The rapid rollout of digital initiatives and the relentless pace of technological advances make skills gaps a genuine concern for firms intent on digitalisation. One approach to bridging the gap is outsourcing the skills you need for a particular project. This can be a viable option for occasional projects, but it can create an overdependence on external support in the longer term.
A more practical alternative is to focus on capability building to equip internal enterprise teams with relevant skills around development, project management and workflows for the initiative you have in mind.
Given the worldwide scramble for talent, it is unrealistic to expect to be able to hire people with the skills and experience you need as you need them. To ensure your digital progress is not hindered by a lack of talent, it is important to develop the people you have.
Encourage buy-in throughout the process
A significant barrier to the success of technological transformation is siloed behaviour and workstreams. A cross-team mentality means that everyone works on strategic technology decisions to ensure silos don’t form. This kind of collaboration across units helps to ensure buy-in across all stakeholders.
Open communication and seamless flows of information break down barriers and encourage a culture of trust and shared responsibility for the achievement of specific objectives — and, ultimately, the long-term success of the organisation as a whole.