Digital transformation is a hot topic in the media. Many news sites and consulting firms have published their takes on the opportunities and threats associated with it. A Google search will direct you to numerous articles with instructive titles like “5 Winning Ways,” “Six Stages,” “Nine Elements,” and “Top 10 Trends” of digital change. There is even a link to a specialized Executive MBA in Digital Transformation.
Digital transformation is defined as an organization’s use of digital technologies (e.g. mobile, cloud, social, big data, robotics) to improve how it operates to achieve its goals. It typically alters a company’s business and operating models, including how the organization creates value through products and services, processes are designed, and employees, suppliers, customers and consumers communicate and transact.
Ford Motor Company is an example of a digitally transforming organization. Responding to socio-economic, environmental, and consumer trends, it is evolving from being an automaker to a car and mobility services business. As Mark Fields, President and CEO explains, “We have to recognize what is going on in the world around us, embrace consumers’ desire for connectivity and mobility, and use the data available to us and new enabling technology to better anticipate and foresee their needs.”
An account manager for a digital platform provider told me that installing digital technology is rarely an issue. The problem is the low levels of adoption by employees after it has been implemented. The new functionality (or the system itself) is not used as intended, which reduces the benefits realized from the initiative. This is not a new challenge for change managers.
Bigazzi, a UK-based consulting company, reports similar findings: "The main obstacles [to digital transformation] relate to company culture, organizational complexity, and the lack of processes that enable employees to engage, collaborate and innovate." These potential barriers are not unique to digital transformation; they apply to any large-scale organizational change.
Digital transformation doesn’t pose anything new for change managers. It is a type of change just like a merger, restructure or efficiency drive. The specifics of the future destination may include different elements or have different levels of importance, but the process to define it and approaches to help people take on new ways of working (mindsets, actions and behaviours) to get there are the same.
One element that appears essential to digital transformation is trust among stakeholder groups (networks or “ecosystems”). As Klaus Schwabs, author of The Fourth Industrial Revolution counsels, “You are about to define a new level of trust between yourself and your employees, between yourself and your customers, between yourself and your key stakeholders and shareholders, and... between you and your partners.”
Earning greater trust implies changes to how leaders and their teams think about their stakeholders, how they engage with them, and how they behave when doing so. As Accenture’s Technology Vision 2017 report suggests, “To become a true partner, companies will need to shift their thinking, and replace the immediate sales goals of the past with goals that customers and employees have themselves.”
Digital transformation, like all other large change initiatives, requires sound change management strategy and implementation for the defined outcomes and benefits to be realized. Boston Consulting Group and the MIT Center for Information Systems Research (CISR) conducted a two-year research study of designing digital organizations. Its analysis suggests three requirements to design a digital business:
- Develop a visionary business strategy
- Identify gaps in the current operating model and identify needed changes to them – roles, processes, ways of working, stakeholder networks
- Create a team accountable for implementing the changes
This looks like solid change management to me.