How to Break Down Barriers to Digital Transformation

Feb 22, 2016
8 Min Read
break down barriers to digital transformation

break down barriers to digital transformation

Roadmaps for digital transformation are beginning to emerge, but how does an organization decide which one to follow? Choose the wrong one, and it could cost millions of dollars and drive away top performers and the company’s best customers. Procrastinate on a decision, and it could have the same impact as the competition seizes the upper hand.

A recent report from McKinsey suggests there are many questions an organization should ask itself if it wants to get digital transformation right:

  1. Where is digital having the greatest impact on your business?
  2. How can you use digital to improve the customer experience from beginning to end?
  3. Is there visible support from the CEO and a clear mandate for cross-functional teams necessary to support digital transformation?
  4. Do you continually test and measure new concepts with customers?
  5. Is your budget responsive to progress instead of the standard three-to-five year business plan?
  6. Are digital experts asking tough questions about proposed ideas in an effort to uncover problems quickly?
  7. Are your people empowered to act quickly and bypass lengthy corporate processes?
  8. Is IT building a separate system that can provide nimble customer-facing capabilities?
  9. Is each initiative clearly aligned with the broad business strategy?

McKinsey notes that less than 15% of companies can quantify the return on investment of their digital initiatives, which makes it an expensive guessing game.

“Practices such as committed leadership, targeted communications, and appropriate incentives are crucial to successful transformations. Yet the principles and behaviors that drive the process are equally important,” write the report’s authors, Karel Dörner, principal in  the Munich office, and Jürgen Meffert, director in the Düsseldorf office.

Employees want transformation

Recent research from the 2015 Digital Business Global Executive Study and Research Project also points out that digital success isn’t just about technology, but also about retaining talent.

The study, by MIT Sloan Management Review and Deloitte, finds that what is unique about digital transformation is that “risk taking is becoming a cultural norm as more digitally advanced companies seek new levels of competitive advantage.”

“Equally important, employees across all age groups want to work for businesses that are deeply committed to digital progress,” the report finds. “Company leaders need to bear this in mind in order to attract and retain the best talent.”

But that doesn’t mean workers will follow a digital transformation without hesitation. Past failures show a landscape “littered with examples of companies focusing on technologies” without investing in changing mindsets and processes of building cultures that fostered change,” the report finds.

Companies may be surprised to discover that their workforce is ready and able to become more digitally savvy if given the opportunity and support from leadership. For example, the report found that 80% of respondents say they want to work for a digitally enabled company or digital leader – and that includes workers age 22 to 60. Many expressed dissatisfaction with their company’s digital efforts, and that dissatisfaction can lead to turnover.

David Krantz, CEO of YP, says that he believes people to be the most important part of the digital transformation equation.

“Because at the end of the day, a company is made up of people. And it’s the people who then create the products. It’s the people that talk to your customers. It’s the people in your company that really are your brand,” he says.

YP (formerly the Yellow Pages) has dozens of offices in the U.S., some with 25 to 30 employees. Krantz visited offices in places like Baton Rouge and Sacramento to meet with workers – some of whom admitted they’d never seen a senior executive in person, let alone the CEO.

“Just talking from the heart about what we’re trying to do, and really even more importantly, listening to them, and to what they’re experiencing with their customers, was a phenomenal learning experience for me,” he says.  “But it helps me then make better decisions about how to prioritize the work that we do around products, or processes, or employee programs.”

Culture is key

For those organizations that want to get sustained employee support of digital transformation, research shows it’s important to make it culturally relevant.

Specifically, Jane McConnell, a digital advisor and analyst, notes there are several things that can stall digital transformation change, many of them echoing the findings by MIT and Deloitte. Among them: slow decision making caused by internal politics; inability to prove the business value of digital; too much focus on technology; difficulties when going from theory to practice; and fear of losing control by management.

McConnell says research shows that companies whose culture supports digital transformation have:

  • A strong, shared sense of purpose that focuses on minimizing internal politics.
  • Freedom to experiment so people can prioritize, make decisions and rethink how they work.
  • Distributed decision-making to give workers at the “edges” of organization a voice in digital transformation.
  • A responsiveness to influences from the outside world and an understanding of the value digital can bring.

“Digital transformation is coming to us all, and understanding the relation with work cultures will help you optimize your change initiatives and actions,” she says.

Learn how Sage Payroll Services broke down the barriers to digital transformation.

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