There is no doubt that digital transformation is one of the most over-used and over-hyped business buzz words of the 21st century. At its core, digital transformation is fundamentally vital to adapt to a changing market – and many businesses are struggling to drive the desired outcomes they set out to achieve.
I have engaged with a host of executives and business owners over the past few years since launching Arktic Fox, and when I reflect on the journey so far, one of the most common problems I see is that many organisations are actively seeking assistance to “digitally transform” but are instead:
Putting lipstick on the pig – many organisations don’t want to do what it takes to truly evolve, but want to be seen as evolving by making some small visible changes OR
Struggling to understand what digital transformation is and believe it is nothing more than implementing a new piece of technology.
While there are a host of reasons that digital transformations are stalling, leadership and culture are often at the centre of a lack of material progress.
1. The price of getting it wrong
The market isn’t helping digital transformation efforts progress. The rivers of gold aligned with digital transformation mean that every service and software organisation is seeking to gain a slice of the action. Whilst some are highly valuable, others are simply a re-brand of an existing offering to tap into the vulnerability of leaders desperate to bring about change and to be seen to be driving the digital transformation agenda. For organisations, the cost of getting it wrong is material – and I am not talking about the loss of investment dollars – the real loss is the dis-engagement it drives with teams. When it comes to digital transformation you have only a couple of attempts to get it right before team members build a level of dis-belief in the organisations ability to change; and if you think that doesn’t matter, think again, as it is the people on the ground who drive the change. Without belief and a sense that you are heading in the right direction, they will work against the change, not with it.
2. Ignoring foundations
Once organisations decide to transform, they want to move quickly and focus on how to deliver tangible outcomes early and often. Whilst having tangible outcomes is important to build belief, it shouldn’t be at the expense of investing in the areas that most need it including the less glamorous foundations and back-end. Old thinking, archaic processes, legacy technology, and disparate data will all get in the way of material progress. It is not a matter of IF, it is a matter of when. A lack of understanding of what will block progress, and a demand on teams to simply deliver, will force teams to build work around delivering quickly but not sustainably. While workarounds work in the short term, they inevitably catch up with you and can create further sunk investments which need to be re-worked on top of addressing the core foundational issues. Understanding the material obstacles early and making targeted investments will enable businesses to accelerate their efforts in the medium to long term.
3. Alignment and focus
When transformation takes hold, chaos tends to transcend on the organisation as every team starts to interpret what the transformation means for their area. Rather than having a common direction that teams are working towards, teams splinter off and create their own plans for what they believe is important. This results in 10 – 12 different siloed directions – none of which converge or support a common path. Teams start to drive their respective agenda into the business and tension forms between teams driven by the lack of alignment. Leaders play a very key role here in ensuring that teams are working towards a clear and aligned direction, and that the top organisational priorities are communicated and seek to bring teams together to address core needs as opposed to setting teams up to compete for resources and attention. Without that alignment, teams spend most of their time lobbying and navigating politics as opposed to getting on with delivering the key outcomes that the organisation needs to address, which becomes exhausting for all those involved.
For organisations intending to drive real change and be able to accelerate their ambitions over time, it is incumbent on all leaders to:
Partner effectively with peers to create clarity for the organisation. This doesn’t mean you need all the answers, but it does mean you need to be able to help the organisation understand where you are headed and what some of the key priorities are to get there.
Actively challenge the team to understand and diagnose the today state. Assumptions can lead to investment in the wrong areas. So can opinions formed solely on the basis of ones prior experience. Understanding the current state across technology, process, data and culture can enable you to surface key issues early and ensure appropriate steps are being put in place to build strong foundations, which will enable success and reduce work-arounds.
Invest in people. Above all else, a strong focus on people is paramount. Businesses who obsess more about their people than technology will more likely win the transformation battle.