McKinsey’s 2018 article, “Unlocking Success in Digital Transformations” paints a bleak picture for the success of digital transformation. They indicated that, while more traditional transformations have shown a success rate of less than 30%, digital transformations also appear to be difficult. Only 23% of respondents indicated that their organization’s digital transformation has successfully improved performance. And only 16% of these same respondents indicated these changes were also sustainable.
Why is this? Surely, one of the factors is due to companies coming of age in a digital environment. 2018 MIT research indicates the following breakdown (across industries) of company’s digital maturity levels:
- 25% Early
- 44% Developing
- 30% Mature
In our work with clients, the key organizational challenges that exist which impact the company’s ability to compete in a digital environment include:
- Getting people to take risks (e.g. experiment)
- The drumbeat of constant change and/or ambiguity
- Talent gaps
- Consistent top-down and bottom-up communication
- Lack of information sharing (e.g. information that matters)
- Selecting and/or implementing the right technology
How do you improve your odds and avoid being part of McKinsey’s high failure rate? We believe the future of digital transformation is (still) people. People make the difference - combining technology and processes to realize digital returns.
Because of the troubling survey results, we felt we needed to share our digital transformation secrets with you. In subsequent articles, we will provide additional detail.
Here are a few ideas to start:
- Leadership. Must visibly support the digital transformation and ensure alignment and collaboration throughout the organization. Executive leadership needs to continue to evolve in the digital environment to create conditions which enable success. Leaders need to provide vision and purpose, creating the conditions for people to experiment, and empowering people to think differently.
- Value Potential. Your company must estimate the value potential of the plausible returns of the digital investments. Once the digital costs and benefits have been properly understood and vetted, mechanisms must be in place to track progress (ideally on a weekly basis), and to share and promote lessons learned.
- Talent Readiness. The company understands talent shortages, develops digital talent, and partners where necessary. Employees are not satisfied with the learning opportunities they are receiving today, and the lack of digital opportunities increases attrition risk. Our experience indicates that Developing and Mature companies focus on developing employees (versus focusing on contractors or external relationships), often employing on the job training.
- Adoption. The company must embrace experimentation by developing innovative use cases to drive top line and bottom line results and actively measures adoption across the enterprise. Accountability, responsibility, and results are all woven in and integrated into successful digital projects.
We believe that companies that combine the right digital processes and technologies and utilize the correct people strategies and levers will successfully maximize value from digital investments. Maximizing digital Return on Interest (ROI) leads to exceptional cost savings and the ability to roll out differentiated products and services. Ultimately, the end goal is to drive new growth. By focusing on your people – your performance multiplier - your businesses can achieve this and thrive.
Proudfoot’s digital approach enables management to identify the right digital change, lead their people, and manage processes and systems to achieve the necessary transformation.
We would love to help you with your journey.
Contact Us to find out how we can help.