The phrase “digital transformation” has been heavily discussed in recent years and is set to ramp up even further, with spending from businesses on digital initiatives set to top $1.3 trillion in 2018.
But the simple fact is that most companies aren’t doing it right.
If you’re a business that’s looking to implement technological change in your operations, it’s not a “digital transformation” you’re looking for but rather a “cultural transformation.”
Real, lasting digital change in your culture isn’t about thrusting iPhones into the hands of your sales team or equipping your marketing team with Microsoft Surface Pros. It’s about creating a digital mentality within your teams and branding a digital mindset onto everything your organization does.
You need to place people or, to put it another way, your users (because internally, your employees will be users, too) at the center of your transformation effort. What do they need to do their jobs better? What changes are going to benefit them?
Digital transformation needs to include a transformation within your company culture.
Create a Culture Fit for the Digital Age
If you’re serious about enacting genuine digital change in your organization, then you need to go further than just implementing new tech into your current processes.
Far too often, the “digital” in “digital transformation” is mistakenly believed to mean just “tech,” when in reality, it means much more.
According to a recent study from Boston Consulting Group, 90% of businesses that prioritize culture in their digital transformation drive see performance improvements compared to just 17% that don’t prioritize culture.
In addition, 80% of companies that focus on culture sustain their strong performance.
Being disruptive, inquisitive, and open to failure is the bedrock of a genuine culture of digital transformation, and they’re qualities that don’t come easily. To attain them, leaders from all levels of the business have to adopt a truly collaborative approach to change.
Assigning digital leaders from entry-level staff right up to the C-suite level helps foster dialogue and collaboration at an early stage, characteristics that are key to agile digital teams. Avoiding discrimination concerning staff seniority creates a fertile ground for new ideas, too, and will be much more effective than just the high-level leadership trying to force change.
Encouraging teams to experiment and being transparent that failure is accepted (and even encouraged) also helps combat feelings of fear and even encourages solutions you never even considered.
In effect, your program needs to adopt a product design mindset of challenging assumptions, iterating, and always keeping the end user in mind.
A digital transformation drive is a continuous, ongoing effort that is meant to be uncomfortable and must be iterated as you go.
Be Clear & Confident About Your Digital Transformation
Any digital transformation effort is going to be met with some level of resistance. This is inevitable.
The finance department is going to question whether it’s worth the money, your more traditional employees are going to ask whether it’s really necessary, and some employees might even be fearful about whether they’ll still have a job.
Clearly communicating the benefits of digital change and stressing that the new technology will augment rather than replace current job roles is vital to stemming the tide of resistance.
Risk aversion and cultural challenges are the two biggest obstacles to digital change, according to McKinsey’s “Culture for a Digital Age” report, which found that 33% of businesses identified culture and behavior as the central barrier to meeting their digital priorities.
For example, when Starbucks created a new executive role, the chief digital officer, it signaled that its “digital businesses are as essential to the company’s ongoing success as the coffee it sells.” It made tech a priority and a part of every employee’s culture.
This requires strong leadership and the same level of commitment that comes with operational change as well as recognition that you might not have all the answers.
Hiring talent from digitally led companies helps inject new thinking into your business and galvanize your workforce.
You can also work in tandem with an innovation partner who serves as an immediate and lasting injection of digital expertise, providing a model for how your own teams work and acting like a real agent of change in your wider business.
For innovation partnerships to work, however, it’s crucial that there is a good cultural fit between your company and your chosen partner. You’re wanting an injection of fresh ideas, but if you both work in vastly different ways or differ significantly on what digital transformation should look like, you’re wasting both time and money.
If you are confident and transparent about your digital transformation, however, the rest will fall into place.
Employee Knowledge Is Power
As we say at hedgehog lab: People are our greatest asset. People are your greatest asset, too, and they need to be involved in your transformation effort every step of the way.
Locked inside your employees’ heads are invaluable stores of insight and intelligence relating to your business that are just waiting to be mined.
They’re the experts in their own roles, so ask them what they need, how they might do their jobs more efficiently, and what they think is holding them back. Set some time aside and offer workshops to give employees the chance to think creatively about their job roles and how digital techniques might be able to augment them. Not only does it give them a forum to speak their mind, but it will also make them feel more invested in your digital transformation efforts.
It is inevitable that some employees will be resistant to change. A recent Microsoft study on digital transformation found that 49% of UK business leaders experienced employees expressing fear of change when digital initiatives are introduced.
The survey also found that 47% of UK businesses have no formal digital transformation plans in place, and just 23% include digital culture transformation as part of their digital transformation process.
You need to make your employees feel involved in the initiative and let them help shape how it will look. Leaders will always be the ones to instigate change, but harnessing a digital culture is a ground-up effort rather than top-down.
3 Tips For Making a Lasting Digital Transformation
A digital transformation that lasts is easier said than done, but it’s important to include input from employees, challenge assumptions, and ask for help.
1. Ask Your Employees for Ideas
Often, digital transformation takes the form of the Ten Commandments, passed down from up high, inscribed with the CEO or senior executive team’s pronouncements on technology.
It may sound obvious but it’s worth stating: This is an awful way to get employee buy-in for your digital push.
Involve your employees every step of the way; canvass their opinions before you start anything, create an engagement group to provide a platform for employee views, and keep canvassing their opinions throughout the process.
If things go awry, don’t be afraid to adapt your approach.
2. Continually Challenge Assumptions
Adopt a product mindset, and be prepared for constant evolution and iteration. Technology is continually transforming, and your business should be prepared to transform along with it.
After all, digital transformation isn’t some one-and-done project that’s ticked off before moving on to the next management fad. It’s an ongoing commitment to digital culture and the challenging of assumptions to ensure that your business is working as efficiently as it should be. Your employees should embody the product mindset, too.
3. Get Help
If you’re an organization that is used to doing things a certain way, then it’s OK to admit you need help.
Assistance comes in many forms, but it could be hiring a digital transformation expert or partnering with an organization that has a track record in transformation and innovation. That way, your business learns from the best and absorbs some of that vital digital expertise.
There’s no better way to learn than to learn by doing. Good innovation partners will certainly show you the way and won’t be afraid to push you toward difficult questions and awkward answers.
Create a Successful Digital Transformation
A successful digital transformation effort is about being bold and brave enough to face the fact that your organization needs to adapt, and quickly, to keep up with your rivals. It’s also about spending less time planning and more time doing.
It feels difficult and unnatural if you’re a mid- to large-sized organization that is used to doing business a certain way, but what better way to signal true transformation than to break out of the shackles of corporate inertia and boldly forge ahead with your digital program?
You have to embody the agile digital culture you want to instill in your teams, and you do that by moving quickly.
And if you don’t, your competitors surely will.
About the Author
Sarat Pediredla is the CEO and co-founder of global technology consultancy hedgehog lab. Specializing in emerging technologies, the business is ranked as the UK's number 1 app developer on Clutch and has over a decade's worth of expertise in helping brands to scale digital solutions and understand where their market is headed.