At the end of last year I wrote an article called ‘Digital Transformation Needs Organisational Change Management’.
The article stressed the need for organisational change management (OCM) in order for digital transformation efforts to be successful. The SADA systems survey I referenced stated that 53% of surveyed participants said their biggest challenge in completing a digital transformation was getting non-IT departments to overcome a fear of “massive change.
Also at the end of last year, Microsoft released a report called ‘Embracing Digital Transformation – Experience from Australian Organisations’.
It clearly exposes why Culture, Understanding, Leadership, and Talent (C.U.L.T.) are key to successful transformations.
Microsoft conducted in-depth interviews with 30 senior leaders of Australian organisations in which they shared their experiences – the drivers, challenges and gains.
The findings were interesting and I have summarised them here including the reason why OCM will be needed to make the transformation a success and address some of the challenges these organisations identified.
All interviewees viewed digital transformation as a competitive necessity. The organisations were found to be taking a very practical approach to transformation and were experimenting with and implementing digital tools to better engage customers, empower employees, optimise operations, and transform products and services.
Interviewees identified three critical success factors which actually mirror the barriers identified later in this post:
- Strong leadership buy-in
- An entrepreneurial culture
- Access to talent
Clear vision and strategy were also important.
The organisations broadly fell into two types, based on the extent to which they exhibited these traits. ‘Proactive and Embracing’ organisations embraced digital transformation and were empowered to pursue it – resulting in a strong digital mindset and a propensity for disruption. The second group, ‘Motivated but Constrained’ organisations, were keen to progress but found their digital efforts hampered (usually by internal conditions).
The first group made digital transformation a top priority. They were building entire systems to capture data and convert it into insights and intelligent action at scale. The second group were more likely to deploy point solutions to digitise business processes, such as moving from paper to electronic forms.
The following diagram, extracted from the report, shows where the respondents see the opportunities in digital transformation by each group.
Figure 1: Where respondents see opportunities in digital transformation
It was recognised by all organisations how important internal communication was in the transformation. Communication is an integral part of OCM. The interviewees said that the communication and education process enabled the adoption of new technologies by building understanding and confidence.
OCM will be critical in determining the level of understanding and confidence in all impacted stakeholders using models such as ADKAR so that targeted intervention can place where the levels are less than desired.
Refreshingly, the report suggests that successful digital transformation is about people as much as technology.
The organisations surveyed identified their four top barriers to digital transformation as availability of talent, culture and mindset, leadership and clarity of vision.
Figure 2: Top barriers to digital transformation (all respondents)
OCM can address these barriers though the development and implementation of resistance management plans, communication plans, training plans and reinforcement plans.
The report states that ‘given the breadth and impact of most digital transformation programs, it is essential that they are driven from the top of the organisation and enjoy sustained commitment’.
This will be achieved through a solid sponsorship model that cascades down through the organisation. OCM will ensure that sponsors are equipped with the skills, capability and tools to be effective sponsors through active coaching and mentoring.
Culture and mindset is where OCM really comes into its own.
The report acknowledges that ‘an organisation’s culture – its shared values and beliefs – can enable or inhibit digital transformation’. It mentions that the words ‘digital transformation’ can be equated to ‘job obsolescence’ and therefore people see it as a threat and will resist the change.
OCM can surface resistance to change and employ tactics to remove the barriers to change. It can ensure that all stakeholders understand how digital transformation will work, and in particular, how their roles will be changed for the better.
The report outlines some ‘next steps’ for organisations planning their digital transformation journey. It provides a set of questions to be asked to assess the current situation and then provides a ‘framework for success’ to be used as a checklist for turning intentions into actions.
The framework clearly shouts out that there is a critical need for OCM.
Figure 3: Framework for success
Words like buy-in; committed; sponsorship; champions; clear vision; education; communication; success stories; collaborate; and manage change scream OCM.
Ignore it at your peril!
Macanta can help you with the OCM aspect of your transformation.