According to a recent McKinsey study, less than 30% of survey respondents investing in digital transformation initiatives succeed in achieving their targeted business outcomes. The McKinsey study goes on to report that companies who clearly define goals, KPIs, new processes and business strategies are three times more likely to achieve digital transformation success.
Why are so many businesses struggling to achieve business transformation benefits when vendors, analysts, and experts consistently describe the impact on business growth in positive, glowing terms? One of the biggest challenges is presented by the term “digital transformation” itself. What does it really mean? Although corporate leadership may envision an initiative that boosts productivity and lowers costs, the term can sound intimidating to many individual employees. When they hear “digital transformation,” many imagine an army of robots marching in and taking over their jobs. There is no unified agreement on what is meant by the term, and when business transformation concepts are nebulous, their chances of attaining the desired success are reduced.
By focusing only on digital transformation technologies, we lost the people on the way
To date, few organizations have been able to communicate digital transformation concepts to their employees in a coherent fashion. Why? Because over time we’ve removed the human aspect from the “digital transformation” term. Instead, we’ve frightened people with language that represents a situation that they can no longer control, when, in fact, the opposite should be true. True business transformation succeeds when employees, rather than technologies, are empowered to make a difference in their workplace.
Converting “digital transformation” into a people-led evolutionary journey
A more pragmatic approach to inspiring constructive change within an organization is to create a language that engages and emphasizes people and not technology. The new language should describe the anticipated changes as an ongoing human journey, rather than as a finite technology deployment project. In that way, the mindset of the employees is guided in a way that enables everyone to recognize transformation as part of the everyday corporate fabric. A company like Amazon, for example, did not stop changing the day their website outperformed its brick-and-mortar bookstore competitors in sales volume. Because of their continuous customer obsession supported by technology, the company is still evolving and disrupting established business norms across many aspects of the global economy because of their continuous customer obsession supported by technology.
Most businesses transform because of changes to their external environment or due to the shifting needs and requirements of their customers. Technology plays a part in the big picture, but the human factor is the overriding element that determines enduring business failure or success. Journeys are taken by humans and not by technologies. Transformation involves fear, understanding, collaboration, and then operational change.
When misleading or obscure language is used to articulate change, the wrong impression can be created. Consider, for example, the use of the term “climate change” instead of “climate crisis.” Climate “change” fails to describe the urgency of the situation. In fact, the term implies that climate “change” can be quite gentle. We might even enjoy it if winter days feel warmer. It lulls us into a false sense of security. But when the term climate “crisis” is used, it becomes very clear that drastic actions must be taken to stabilize the level of disruption and calamity.
Similarly, the “digital transformation” language that we use around technology promotes the wrong impression and creates a destabilizing effect. It presents an unattainable goal that makes people withdraw and freeze in their tracks. When the people are immobile, the business freezes. Modifying the language makes the business transformation journey more accessible to the people who will fuel the transformation. Avoiding the beaten track of using vague and complicated words to describe an initiative goes a long way to improving the odds of ongoing transformational success.
People more easily understand business benefits
Many people within the organization may not understand the digital transformation language, but they clearly understand when ideas are communicated as business benefits instead of as technologies. For instance, what happens if you approach a person and ask them “Would you like to buy some artificial intelligence?” or “Would you like to buy some blockchain?” Most people don’t recognize what these terms imply and how they can be used to achieve a business advantage. However, if you ask, “Would it help your business if you could analyze your business data instantaneously, and make real-time decisions regarding your customers, competitors, market conditions and supply chain?” The answer would likely be “Yes. I’d like to buy one of those, please.”
Focus on business benefits
to help employees embrace
Transforming the mindset of people within organizations is not easy work. The first steps towards evolving transformation goals are taken by establishing the right level of communication—and that involves simple and straightforward language. Clear language allows employees within the organization to embrace a common culture that accepts change as an ongoing journey. When you change the language, you can change expectations, and changing expectations is a great way to ensure you reach your desired outcome.
For more information about digital transformation
For more information on how to jumpstart your business transformation journey, contact Schneider Electric Business Transformation Consultant Rik De Smet.