In a rapidly changing world of exponential technology growth and digital transformation are people still an organisation’s greatest asset?
The commonly subscribed adage that ‘People are a company’s greatest asset’, probably still rings true in most cases but in digitally-led environments, it tends to be business leaders who make the real difference.
However, traditionally the resources invested by organisations into understanding and developing their people are vastly outstripped by their investment in customers and in ‘shiny’ new products and technologies.
So what is Digital Transformation
Digital transformation is the process of using digital technologies to create new – or modify – existing business processes, work culture and customer experiences to meet changing business and market requirements. This reimagining of business in the digital age is digital transformation.
The fact that historically there has often been a distortedly abstract view of digital transformation initiatives doesn’t help in creating momentum for change, often leading to a mix of confusion, apathy and fear when a digital transformation project is discussed. These negative emotions and sentiments ultimately tend to set up the vast majority of projects for potential disaster.
In fact, whilst the importance of business transformation has grown dramatically in the last decade, a startling 84% of business transformation projects ultimately end in failure. It takes around three years for organisations to even begin competing in the digital market, even when they get it right.
It’s also pretty self-evident that at the heart of most failures it’s not normally the technology, but the people, and more specifically still the leadership team.
And the most commonly cited reasons for failure? ‘
Management behaviour ‘not supporting change’ and ‘employee resistance to change
Failures are often characterised by a lack of urgency, a reluctance to adopt, a fear of change and a lack of clarity about ‘where the business is headed and why the change is essential, but these are all factors that can be addressed by good leadership.
However, the legacy abstract view of Transformation initiatives tends to create a filtered perspective of why the change was needed in the first place and a realistic understanding of just how tricky it can be to successfully achieve the desired outcomes.
Current approaches to digital transformation are heavily focused on the process, the technology and the execution plan. However, this approach tends to be short-sighted. The greatest obstacle to digital maturity is where organisations ‘think about transformation as a technology challenge instead of a strategy or leadership challenge’, and that ‘In digital transformation, the transformation is more important than the digital.
If digital is the ‘What’ of a transformation, then Leadership is the ‘How’.
For this reason, many organisations will first look to large consultancy firms to manage the end-to-end process, specifically the resource and talent management aspect of the project life cycle.
DigitalTransformation tends to be driven by a variety of factors:
- Business or Target Operating Model change
- Digitising an organisation or product
- M&A or Divestment activity
- Cost reduction
- Supply chain optimisation
- Responding to competitive threats
- Shared services implementation
And the potential benefits of successfully implementing change programmes can contribute to real business success, often developing a competitive advantage by achieving one or more of the following:
- Free up the budget
- Improve customer satisfaction
- Regulatory changes
- Improving profitability or growing your market share
- Cutting costs
- Improving employee engagement
It’s really difficult to complete a digital transformation programme and to achieve the potential benefits listed above, fighting inertia, technical complexity and resistance along the way. But it also reaffirms that the most important element of a business transformation programme is always the people. Technology, products and services always feel like they are the cornerstone of a programme, but if your team and the people leading them aren’t on board and implementing the transformation strategy from the get-go, it is almost impossible to succeed.
By investing in the human element of the programme and getting the right blend of project leaders from the outset, whilst ensuring the right people with the right skills and expertise are working on the project, you can mitigate the risk, take a step closer to achieving success and delivering against the promised outcomes.
Just always remember not to lose sight of the fact that whilst you get swept up in the excitement and the technical requirements of the project your people still remain critical to achieving a successful outcome.
We help a variety of enterprise organisations deliver their digital transformation programmes, bringing in teams of experts and taking ownership of the final deliverable so our clients can focus on what they do best.