Since digital transformation projects change your business from the ground up, it’s not surprising that many efforts fall short. McKinsey found that less than 30% of digital transformation projects succeed, with non-tech savvy industries only reaching single digits (4-11% mostly.) Even tech-forward industries like media and high-technology struggle to complete their projects to a level they’re satisfied with and consider “successful.”
And that’s the challenge many companies face with digital transformation. Yes, it’s a wholesale initiative that touches every part of a company, from technology to company culture, expectations, and overall goals. But companies also struggle to define what success looks like for them. Is it when you automate a certain percentage of manual processes or when you can ship new products in significantly less time than before? Is it when you reach a certain level of cost savings in two or more departments or when everyone has been shifted to a fully remote workplace?
Digital transformation projects touch multiple business units and technology that must collaborate for success. Companies that do achieve success often point to several keys they used to improve their situation. Digital transformation becomes part art, part technology if you want to get it right for your company. Here are six key elements of successful digital transformation that can make it worthwhile for your company today.
6 Keys to Successful Digital Transformation
Companies who succeed with digital transformation strategies start with considerations that fall into these six categories:
- Having open-minded, digital-savvy leaders
- Building capabilities for the workplace of the future (both in terms of technology and the right people with the right skills)
- Empowering people to work in new ways
- Communicating frequently across many channels (traditional and digital)
- Giving tools and processes a relevant digital upgrade
- Defining what success means
1. Having the Right Leadership
Because change takes place at all levels of a company during a digital transformation, it’s critical to have the right leadership in place to lead the efforts. Namely, leaders who are familiar with digital technologies and can guide these efforts effectively. Many projects stall because leaders fear the project because they don’t understand the technology or method being introduced.
Next, having transformation-specific roles and designating relevant responsibilities helps keep the momentum going for the project. These should be roles and people who are dedicated full time to the change effort. This aids in ensuring nothing is left behind, and milestones are reached for every stage.
Finally, leadership commitment before, during, and after the transformation is critical too. Leadership is invested in seeing the project through to completion and ensuring that it is successful for whatever objectives they’re looking to achieve. As with most work, success is more likely when people are engaged in it and the process.
2. Building Capabilities for the Workforce of the Future
For some companies, it’s easy to develop the talent and skills throughout the organisation that are needed for digital transformation. They’re already involved in a tech-forward industry, so pivoting to incorporate more of that is straightforward. For the rest, however, it’s not.
That’s not to say that you only need those with relevant tech skills to have a successful digital transformation. Redefining roles and responsibilities to align with the transformation’s goals is also helpful. It clarifies the roles and capabilities your company needs so you can plan for the future. For example, perhaps you need to hire people with specific skills from outside the company, while for others, you can offer training to internal candidates and achieve the same success.
Two skill and capability areas critical to this are people with the tech and soft skills to bridge potential gaps between the traditional and digital parts of your company. They can help foster collaboration among colleagues, translate and integrate new digital methods that align with existing business workflows, and have the tech skills to enable much of it.
Another area that leads to digital transformation success is when companies scale up their workforce planning and talent development. This helps people identify what’s needed, what skills existing employees may have, and how they can help develop them in the future. This includes setting company-wide hiring goals based on specific skills instead of job titles and descriptions, which can double your chances of success.
3. Empowering People to Work in New Ways
Digital transformations require more than just replacing technologies. It requires cultural and behavioural changes across the organisation, such as increased collaboration, calculated risk-taking, and customer-centricity.
Successful transformations empower people to embrace these changes by reinforcing new behaviours and ways of working through formal processes. That includes continuous learning to help employees make the transition and a more open work environment that encourages collaboration and questioning.
One factor that can make-or-break a digital transformation is reinforcing the change at all levels. It’s one thing to have upper management proclaim that “this is the new way of doing things,” and that’s it.—It’s another to have them challenge the old ways of working and encourage employees to experiment with new ideas. Rapid prototyping can help employees and teams learn how to work in this new paradigm by encouraging new workflows, tools, technology, and collaboration across business units.
4. Communicating Frequently Across Many Channels
Clear and frequent communication is critical during a digital transformation. Significant change like this can be scary for an organisation that’s not used to such wholesale changes. People at all levels must understand where the company is headed, why it’s changing, and why the changes are relevant.
Further, these change stories must be communicated often and regularly across many channels. Many employees don’t engage with corporate communications in certain channels, so they may miss the messages from upper management or their business unit. Given how much time we spend on digital communication channels such as instant messaging or email, it’s not surprising that some surveys found that these remote and digital channels do a better job of supporting success than in-person or traditional channels such as the town hall meeting. One survey found that transformation initiatives that used digital channels to communicate information were 3X more successful than traditional ones.
5. Giving Tools and Processes a Relevant Digital Upgrade
Many initiatives are so focused on “going digital” or bringing on board new technology that they forget to look at whether the technology will be useful to the company. There are four considerations companies can use when deciding on the relevant upgrades:
- Adopting digital technology that makes information more accessible to people in the company.
- Rolling out self-serve technologies that give people more control over how the digital changes affect them.
- Updating overall processes and procedures to include the new technologies as they are deployed, ensuring they’re relevant to all who use them.
- Visibly using interactive tools and technologies such as self-serve tools or digital communication channels to demonstrate the adoption of the transformation overall.
6. Defining What Success Means
The final key is in defining what a successful digital transformation looks like. Is it when 25% of the company uses automation, or when your transformation team has updated all processes with relevant tools? Is it when you reduce product time to market by 35%, or when your HR team is better able to hire staff with the skills to match your new digital-first philosophy?
These discussions should start with upper management, who are ultimately responsible for deciding on these metrics. However, those planning the transformations and those affected by them should also contribute to these measurements. After all, they’ll be deeply impacted by the transformation, and their efforts will roll up to the metrics measured and reported to upper management.
Aligning metrics or business objectives with the relevant digital transformation efforts makes it easier for all stakeholders to do this.
Your Company Can Have Success With Digital Transformation Too
Many companies can digitally transform a single department in a few months or a single quarter. Transforming an entire organisation requires more planning, effort, and investment. No single technology or business model will ensure success since it touches every aspect of a company and most employees, people, and processes.
You can get ahead of the competition with the right leadership, mindset, communication plans, and willingness to empower people at all levels of your company. When everyone understands the plan, knows what will happen when, who it will affect, and how they can help, digital transformations are more likely to happen and happen successfully.
If you’d like to apply these keys to success to your company’s digital transformation, get in touch with the Redcentric team today. Our digital transformation services are ready to help you on the road to success.