Even though digital transformation is a priority at most companies, many of these initiatives fail to meet their objectives. In fact, over 80 percent of digital transformations are likely to be unsuccessful. It doesn’t have to be this way.
Constantly evolving digital technology has created a wealth of opportunity for businesses to connect with their customers, explore different business models, and constantly work to make internal processes more efficient. These are things every business wants, so why do so many transformation efforts fail?
Below are the “seven deadly sins” of digital transformation, and some tips for how to avoid committing them.
Gluttony: Biting off more change than you can chew
Digital transformations often involve big changes to an organization, but that doesn’t mean it’s time to change everything about how the company functions all at once. As with any change initiative, digital transformations require clearly defined business outcomes.
It can be tempting to throw in other major changes under the digital transformation umbrella. After all, having momentum behind such a sweeping undertaking is rare. That’s why it is important to establish clear metrics, widely understood throughout the organization and directly tied to the core business. When leadership aligns behind clear success measures, the organization can focus on the next step in the transformation without the distraction of other change initiatives shoe-horned in to the digital transformation.
Lust: Pursuing technology at the expense of everything else
Digital transformations are still change initiatives. The technology is an important piece of the puzzle, but like any other change initiative, the organization and its culture must be ready to adopt it. Organizational Change Management (OCM) is critical, especially for large institutional change. Some organizations still believe that OCM and other people-focused aspects of transformative projects are an afterthought, not to be taken seriously. If a company invests in a new technology, but lacks the skills within the organization to adopt and implement it as envisioned, that investment will not bear a return and the change initiative will fail every time.
Sloth: Allowing momentum behind the change to dissipate into the organization
One of the major reasons why so many digital transformation efforts fail is that only 27 percent of them are owned by the CEO. The CMO owns efforts 34 percent of the time, while at other organizations, the CIO or CDO takes ownership. To be successful, the CEO and their team should own digital transformation. Unfortunately, when these types of change efforts are owned by the head of a business unit rather than the top team, they often never gain the momentum required to take off because they are often seen as being driven by that business department, rather than being driven by the enterprise.
Pride: The enterprise is not on the same page
Digital transformation is holistic. It may seem at times as though one function or business line is the focal point of the change, but the effects ripple throughout the organization. It’s important to have a single enterprise plan, with everyone at the top in alignment regarding how their organization supports the effort. Ultimately, the entire corporate culture must embrace the digital transformation, and improve along the same vectors.
Greed: Making every employee change
While successful digital transformations consider OCM and culture aspects, they are not pure culture change initiatives. That’s why specific and measurable objectives are so important to the success of digital transformation projects. It may be tempting to try to fulfill sweeping ambitions by forcing everyone to become change agents, but doing so may not be the best strategy for achieving those objectives. Involving employees in digital transformation that don’t necessarily add value to the effort distracts from revenue generating business activity, and can sow confusion across the enterprise as well as doubt around the transformation.
Wrath: Don’t give up at the first sign of failure
Companies that embark on digital transformations must be willing to embrace failure in order to find success. While failure used to be a taboo subject, companies are starting to embrace failure as the shortest path to innovation. All digital transformations will have hiccups and snags. Abandoning the effort at the first sign of trouble ensures failure. Companies that can find problems, fix them quickly, and learn from their mistakes are more likely to succeed in the long run.
Envy: Every digital transformation is different
Digital transformations are major organizational changes. No two will be exactly alike. Just because a competitor can implement a new technology with a substantial ROI does not mean your company will be able to simply do the same by simply copying what they did. Benchmarking is important, but your digital transformation must work within your company’s culture. It must reflect your company’s value proposition for its customers both now and into the future.
So many organizations fail to meet their digital transformation objectives because they don’t define specific objectives and success measures, assess the readiness for change within the organization, ensure that the CEO is driving alignment across the top, and scope the transformation to ensure it remains manageable. As with any organizational change effort, company leadership must have a clear picture of the drivers behind the change and the results they wish to achieve.
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Daniel Newman is the Principal Analyst of Futurum Research and the CEO of Broadsuite Media Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise. From Big Data to IoT to Cloud Computing, Newman makes the connections between business, people and tech that are required for companies to benefit most from their technology projects, which leads to his ideas regularly being cited in CIO.Com, CIO Review and hundreds of other sites across the world. A 5x Best Selling Author including his most recent “Building Dragons: Digital Transformation in the Experience Economy,” Daniel is also a Forbes, Entrepreneur and Huffington Post Contributor. MBA and Graduate Adjunct Professor, Daniel Newman is a Chicago Native and his speaking takes him around the world each year as he shares his vision of the role technology will play in our future.