The Human Factor in Digital Transformation

Digital transformation is the process of using digital technologies to either create new or radically modify pre-existing business processes, culture, and customer experiences to meet changing business and market requirements. Using modern digital technology to transform previously non-digital businesses. The clue is in the name, no?

Well, yes – but too many businesses fail to recognize that there’s no single, simple way to apply digital transformation to any business. It was never intended to be a “one size fits all” proposition. And neither can it be thought of as simply the application of technology to business, because a business is made up of its people. If you do digital transformation well, with humans at the heart of the process, it’s the equivalent of giving your staff a steamroller to smooth out the process. If you do it poorly, and neglect the human factor, it’s the equivalent of running over your staff with a steamroller, because they feel like inconveniently lumpy parts of the process.

Before you can conduct an effective transformation, you need to consider the active preparation, training, hiring and teambuilding that the transformation will entail – because if you just take care of the technological transformation, your attempt is doomed either to fail, or to slow down for a potentially crucial period as reluctant and potentially scared staff get to grips with the change.

The Golden 30%

Failure to appreciate that digital transformation has to include workforce transformation too is why, according to David Loseby (a procurement adviser with a doctorate in Behavioral Science), the success rate for digital implementations is between 30-40%.

If you wanted to spend company money on a new machine that had only a 30-40% chance of working, you’d be laughed out of the CFO’s office. But the benefits of digital transformation done right are enormous – they’re skilling you and your company up for the next few decades of the 21^st century. That’s why you have to do it – but you have to do it right.

Loseby re-iterates the point that if you impose transformation on a workforce, they will reject it, because it’s new learning, it’s leaving old, previously valuable skills behind, and if it’s done in a high-handed way, it can lead to walk-outs, resignations, or even union action.

So, that 30-40% – what’s their secret? How come they can get digital transformation right when up to 70% of the rest of the market fail?

The Involvement Key

The key is likely to be involvement. Involving the workforce, keeping them engaged with the forwards motion of the company, offering training where necessary and appropriate to retain staff but equip them with the skills they need to survive in the new version of the business – all of these can smooth the process of digital transformation so it becomes a thing with the workforce behind it, rather than determined to stand firm against it.

It’s true that doing all this work costs any business time and money. But it’s time taken to stand alongside a prior workforce even as the business moves into the model it will use for the foreseeable future. In short, it’s the right thing to do.

Digital Transformations You Might Not Have Noticed

If you need examples to prove the point, there are hundreds within that 30-40% success rate. Whichever part of the tech industry you point to, there are companies that have implemented a gradual, people-first digital transformation. In fact, the process of digital transformation has been ongoing not just in the tech sector but in major brands for years.

Microsoft’s move from individual program discs for its Office packages to a digital download of Office 365? That’s a digital transformation in one of the world’s leading brands that has focused on making life easier for customers, without sacrificing staff or staff roles. See also, Netflix’s move from being a mail-order Blockbuster competitor to being on every TV and device in the Western world and creating its own award-winning content.

Companies like Ikea streamlines their offering, putting more and more customer service online. That doesn’t mean there are necessarily fewer staff in store*, because the company chose a level of digital transformation that didn’t involve staff in radical re-skilling.

Ongoing Revolution

More in the hardcore tech environment, software firm Atlassian shifted its offering to an SaaS subscription billing model – but it took its time, grew its platform and gave itself the scope to scale, meaning there was no steamrollering of staff. Atlassian in particular is an example of digital transformation as an ongoing process – the company is now looking to use robotic process automation, and to bring in artificial intelligence and machine learning.

That’s the point of getting digital transformation right, and bringing staff along with you – as well as recruiting and training new staff in the new disciplines and ways of the transformed business. If you do it right and bring hearts and minds with you, you’re not transitioning from one megalithic, pre-digital state to another megalithic, post-digital state. If you get your digital transformation right, you’re moving from a megalithic pre-digital state to a new, flexible state, forever able to adapt and survive in the technologically-rich future. You needn’t stop transforming your business after just one shift, but can keep it going to meet upcoming challenges, because you have people with you who have proved their adaptability to change.

The Harvard Approach

And to quote the Harvard Business Review on why businesses succeed at digital transformation when up to 70% fail: “The single most important step in digital transformation is assembling the right team who can work together and a strong leader who can bring about change.”

Never underestimate the importance of the human factor in your digital transformation. The Harvard Business Review and 70% of the businesses who try to implement a transformation will call you a fool if you do.