The costs of leaving your people behind during digital transformation

  • Posted on November 18, 2019
  • Estimated reading time 4 minutes
digital transformation costs

This article was originally written by Avanade alumn Michael Hendrix.

Can you name a major organization that is NOT attempting a digital transformation? It’s a tough task. Almost as tough is naming organizations that have SUCCEEDED in their attempt: 70% of large-scale change programs fail; only 16% appear to both improve performance AND be sustainable; with the cost of failed transformations estimated at $900 billion dollars in 2018 alone.

The underlying issue is not digital technology, it’s people. Organizations are underestimating and underinvesting in people, who are the heart of continuous digital transformation. Those that invest in their people, that deliver the strongest employee experience (EX,) also deliver twice the innovation, 25% greater profitability and twice the customer satisfaction.

What does it mean to invest in people? Effective change management is the obvious answer, but traditional change management is not up to the task. The nature of work is changing and change efforts must change with it. The language and style of traditional change management practices is centered around: process and technologies. It’s all about “telling” and “showing,” which is very directive in style and approach. This works well when the object of change is simply to enhance the current capabilities of the work force, allowing them to work faster, more efficiently, more productively. But in a digital transformation, work is often being dramatically reimagined as digital technologies replace, transform or recreate roles and tasks.

The landscape of change management has changed:

  • Change is now continuous and never ending. Advancing digital technologies, demand for innovation and expanding digital product offerings don’t have an end date. Work is moving faster, change is nonstop.
  • A multi-generational workforce means that a one-size fits all approach to change management is no longer possible. Diversity is the new norm.
  • The workforce is more openly value driven so our approach to change needs to tap into this very human motivation.
  • Our ability to capture and analyze data is providing us with new insights into the effectiveness of our change management programs. Data and analytics can now track a person’s consumption and interaction with our communication and training interventions and draw correlations back to their actual on-the-job experiences and performance.

Business and IT executives want to avoid becoming another “failed digital transformation” headline. The stakes are high and engaging your employees, customers and partners is paramount to an organization’s success. Navigating the myriad of change initiatives through the journey from awareness to adoption can be overwhelming. But there are best practices and ways we have of driving an innovative change solution. They’re based on three building blocks of organizational change management for digital transformation:

  1. Human-centered design. Organizations need to activate and accelerate their transformation with a contextualized, persona-based change strategy and roadmap. Too often, the very people upon whom the business is depending for innovation, collaboration and accountability are not really part of the change journey. They’re told at the last minute to get on board and use the new technology and new processes. People don’t respond well unless they co-create and they’re part of the design process.
  2. Personalization. This means taking the foundational information from the human-centered design to develop what I call a library of persona-based communication and training artifacts that brings to life the unique “what’s changing story and new ways of working” for each impacted user group/persona. The one size fits all approach we had five or ten years ago certainly doesn’t fit with the diversity we find in organizations today. People consume communications differently, they learn differently, they engage differently.
  3. Future readiness. This means future-readying your people, not just your digital architecture or infrastructure. Start day one to actively coach/mentor leaders and business ambassadors and drive a continuous campaign of communications. Invest in and enable digital training platforms that are evergreen and offer flexibility and scalability for maximum value realization. Do it across all impacted end-user communities for the upcoming changes to business processes, technologies, and ultimately, new ways of working. Always with the goal of unlocking value to the business.

Remember: at the end of the day the investments to license, install and configure software around the best of breed business technologies is only half the business case for digital transformation. That alone will not ensure success. The other half, and I would argue the greater, more difficult half of the business case, is winning the hearts and minds of the people in the organization. That means developing an innovative change solution to bring them along the transformational journey from awareness to adoption, helping them clearly understand why the change is happening and how that change directly impacts the how, when and where they are expected to do their work.

Bottomline: Avoiding costly digital transformation failures will often require investing in your people as much, if not more, than you invest in new technologies.

Interested in what it looks like to be future ready for your digital transformation? Watch the video below.

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