Leaders implementing a digital transformation typically focus on the technology first, and push off “people change” to later. But digital transformations don’t fail due to technology: 60% of organizations say that culture is the biggest barrier to digital transformation.
What Stops Digital Transformation
In NOBL’s work with organizations going through digital transformation, we’ve found that these cultural barriers take on a variety of forms:
- Inadequate leadership skills and vision. Just 35% of organizations feel they have the leadership capabilities to successfully navigate a digital transformation, and 31% believe that leaders have a clear vision for how new technology is supposed to change the business.
- Operational limitations. 29% of organizations are able to quickly change their operational processes in response to changes in the market, and just over a third say they excel at operations as a whole.
- IT woes. IT—the department often responsible for leading digital transformation—often lags behind the rest of the organization in terms of efficiency. For instance, IT departments that have been optimized can deliver key applications in 90 days or less, compared to almost a year on average.
- Unrealistic timelines. Converting to a new system always takes more time than anticipated, and yet is typically scheduled on top of day-to-day work, rather than breaking it down into sprints. As a result, implementation feels like a long slog with few wins along the way.
How to Successfully Lead Digital Transformation
With an estimated $2 trillion budgeted for digital transformation, we expect more and more companies to confront these challenges. If your organization facing its own digital transformation, take these steps to address potential cultural barriers in advance:
- Align leaders and develop a clear communication plan. One of the most common reasons for implementing new tools is to improve communication and collaboration, yet only 33% of respondents believed that new technology improved communication between leaders and employees. Digital tools can amplify your message, but they can’t define it for you.
- Involve people in the process as much as possible (but accept that you’ll never make everyone happy). 60% of companies that have excelled at digital transformation (“masters”) invite employees to participate, compared to 16% of companies that are new to it. Providing input—even if a different decision is ultimately made—allows people to feel that they have some control of the situation, and that change is happening with them, not to them.
- Provide the right kind of training to bring people up to speed. When going through change, people naturally wonder about their skill set—do they have the knowledge and capability to succeed? To counteract this concern, proactively identify what digital skills people need to develop. 70% of “masters” do this, compared to 26% of companies that are new to digital transformation.
- Identify and support your champions. As with any change, you’ll have people who are completely bought-in as well as total cynics, but the majority will wait to see which way the wind blows. Focus your energy on supporting champions and winning over cynics—they’ll be your biggest assets in converting the fence-sitters.
- Celebrate milestones. As Kanter’s Law states, “in the middle, everything looks like a failure.” To prevent people from backsliding into old tools and bad habits, define what progress looks like ahead of time, and publicly celebrate when it’s achieved.
The Self-Driving Org: A Digital Transformation Framework
Leaders specifically attempting to implement AI in their organization face additional challenges, with 95% of AI pilots failing. That’s because more than any other technology, AI demands integration of both people and systems. This doesn’t happen all at once; in fact, most organizations go through six phases before reaching full autonomy. NOBL has built a digital transformation framework, complete with case studies of organizations that have implemented AI to different degrees, to help more teams achieve “The Self-Driving Organization.”
NOBL also offers digital transformation services—learn more or reach out to see how we can support your organization.
