Change Management for Digital Transformation
Change management for digital transformation is necessary. Early digital transformation leaders achieve nearly double the growth in revenue compared to digital laggards. For enterprise value growth, it’s over double. The gains of digital transformation put pressure on CEOs, CIOs, digital leaders and IT departments to make change happen fast but what about HR? What is their role?
Digital transformation is a misnomer that leads you to think that technology is the sole focus of the transformation. The reality is that it shares the limelight with the people who are going to be affected. Your stakeholders.
If digital transformation is happening within your business, HR should be two steps ahead of everyone when it comes to change management and people strategies. Otherwise, you’re putting the cart before the horse. In digital transformation, team and culture matter because getting change management wrong is responsible for more failures than any other factor of digital transformation.
Overlooking Change Management in Digital Transformation Impacts Culture
The pressure to transform adds to the risk factor and is considerably added to by your company size and industry. If you are stuck in a traditional industry or have an enormous team and lengthy SOPs, you’re more likely to struggle.
Oil, gas, automotive, infrastructure and pharmaceuticals see success rates between 4% and 11%. Companies with 100 employees or less are nearly 3 times more likely to enjoy a successful digital transformation than companies with 50,000 employees.
But why are these organizations struggling so much? Cultures of resisting change and a lack of employee input. Hearing 50,000 voices or coming up against a strong culture of tradition without any intelligible, rationalized strategy rarely bodes well.
“When organizations undertake digital transformation and focus only on technology at the expense of culture, that can hinder progress in many areas,” Carey Oven, Deloitte Risk and Financial Advisory at Deloitte & Touche LLP.
Failure to communicate and rationalize goals to stakeholders means you fail to align the team with your vision which causes an unfortunate ripple effect. As a result, your company culture gets diluted because leadership priorities shift away from the employees’ needs. Fear of replacement grows and morale suffers. By the time you’ve begun implementation, resistance, resentment has festered so staff buy-in and even retention can become a problem.
Digital transformation buy-in relies on change management. Communication and change management is the difference between employees thinking they are being replaced by robots and thinking they will be upskilled which makes them more employable in future. If you’re going to have a successful digitization, you better have your team on board.
5 Ways to Make Change Management Work for Digital Transformation
Digital transformation used to be a priority, but suddenly it has become a necessity. For over 10 years it was ‘top of mind’ but was also easy to ignore. Now that CX (Customer Experience) has become a greater competitive battlefield and employees want to be part of innovative companies, it’s a necessity.
1. Foster a growth mindset
30% of companies are still considered to be technology laggards because nobody is saying what needs to be said. You and your leadership need a mindset shift.
If your organization doesn’t have a growth mindset, doesn’t have a willingness to innovate, is frightened by transformation redundancies or is generally disinterested in change, you will become a dinosaur.
Your competitors infuse technology regularly because they are implored to. Customer buying patterns have switched to online preference meaning CX is crucial. Profitability and competitiveness hang in the balance but so many businesses are still dragging their feet. They keep using old school processes that weren’t built for this era.
Trying to digitally transform using tradition and the waterfall process is just not going to work. RFP templates, project management software, spreadsheets, shadow meetings are beyond outdated. Furthermore, they don’t get the results and land you with the problem of needing band aid solutions later.
Using old processes to transform your business for the future is the great paradox of digital transformation. If you’re going to transform digitally in this most disrupted market you need to make bold moves. Switch your mindset to growth. Develop a change management policy and invite your team to contribute to innovative change.
2. Communicate Transparently and Frequently
Communication is a vital sign of your digital transformation. If communication is absent, transformation will fail.
Ray D’Alio is the CEO of Bridgewater Associates, one of the biggest hedge funds in the US. Back in the 90s he introduced a concept of radical transparency. This ethos stated that employees should know everything that concerns them, from company threats, performance appraisals and beyond. The move created trust and engaged each employee in the company’s purpose.
Digital transformation is a radical idea to many but openness and transparency engenders trust. Explain why the change is a necessity and assure the team that you will be involving them throughout. Communication recruits employees for or against your transformation. If you don’t communicate the why behind the transformation, people will form their own opinions and paranoia can easily set in.
3. Respect and Create Digitally-Savvy, Supportive Leadership
Your leadership team are culture ambassadors. They instill your norms and values and they are responsible for widespread buy-in. They create the psychological safety required to have open conversations with staff around fears. Without their support and buy-in, your pain points and aims fail to filter down.
Articulate the problems the organization is facing and your reasons for pursuing change. Rationalize the changes and what they mean for each member of the organization so that the leaders can have difficult conversations. Bring them up to speed on your thinking and offer training if needed. Have your HR team speak to them about how to communicate with the team. Invest in your leaders because trickle down benefits permeate the entire company.
If this means bringing in more digitally-savvy leadership, do so early. 70% of digital transformations incur a change in leadership during the evolution.
4. Build a Workforce for the Future
“Train people well enough so they can leave, treat them well enough, so they don’t want to”. Richard Branson
Nobody wants to leave a culture that stimulates them intellectually, challenges them with stretch goals, allows them to use their strengths and provides a home for their creativity and development. And, on the flip side, bored people quit.
87% of millennials want career growth prospects and developmental opportunities. They want to be on the forefront of their chosen profession making a difference. If you are a laggard, your employees are already looking at other job prospects.
But, take it one step further. Employers advancing digitally are more attractive to ambitious recruits. By digitally transforming, you offer the chance to lead innovation and change the industry. This means the best talent in the market starts looking at you so when you need advanced leaders, they are already on the radar.
But, EX (Employee Experience) is just one side. For digital transformation, upskilling is critical. It bridges the gap between traditional operations and digital. It allows stakeholders a more informed input and increases the chances at digital transformation success threefold.
5. Make Digitization a Norm
Start by adopting digital tools that make information more accessible. Self-serve knowledge management systems save as much as 20% of workforce time by making information readily available to employees. Subtly, they also instill digital transformation as a business norm increasing your chances of success by double.
Encourage employees to find tools and processes that can speed up, replace or augment their current processes and operations. If employees have a key role in the transformation, it personalizes the success of it.
Put People at the Center of Your Digital Transformation
Change management and digital transformation is a shoes and socks approach. One without the other is just wrong and ends in stinking failure.
Despite the time we’ve had to construct perfect processes, the vast majority of businesses still implement change management all wrong. It isn’t a top down plan enacted at the last minute. It should be company-wide from the start or even before. At Olive, we know that building collaboration into your digital transformation process from the get go, results in higher user adoption down the line.
Olive has reengineered digital transformation to help transparent collaboration with key stakeholders. Olive’s customers see high user adoption results because they leverage our tool and services to work in ways that engage leaders, stakeholders and line employees regardless of your industry or business size. The same hurdles for getting buy-in are completely circumvented by giving your team an efficient voice.
Use Olive to survey your org and get to the bottom of what you are trying to achieve and why. Collaborate with department heads and key stakeholders to discover what their business needs and requirements are.
Using Olive, you can maintain a dashboard of project milestones, and communicate how the project is doing to your c-suite execs. Olive allows you to digitally transform efficiently in the right way with the guidance and support from expert professionals. Achieve high user adoption with the agility of a much smaller company.