Five reasons why digital transformation efforts fail

March 28, 2021 10:27 AM

Processes and automation that are introduced into core business functions as a way to save time and money are perceived by employees as a threat with a fear of being replaced

Involving people and aligning them to the prospective change, having their buy-in and making them part of the decision making will be the key differentiatorInvolving people and aligning them to the prospective change, having their buy-in and making them part of the decision making will be the key differentiator

By Priyanka Agrawal

Statistics show that 70% of digital transformation efforts fail!

Reason? Most digital transformations start from the technologist’s desk. Technology is often synonymous with transformation and is over-prioritised. Things often ignored are people, culture, and mindset. Employees are resistant to change. When new ways of working are introduced, it shows up in lagging efficiency and productivity, more attrition rate, passive-aggressive actions, or just out-and-out hostile attitudes. These can create substantial roadblocks in the way of any transformation process.

What ‘change’ looks like may vary from organisation to organisation; and unlike project management – where it’s easy to point out at schedules, tangible objectives, and specific outcomes, internalising ‘change’ follows a more reactive and indefinite route. Managing change requires a different rulebook. This process doesn’t have a track record as it deals with the most volatile aspect of human beings – their emotions.

The Resistance

Processes and automation that are introduced into core business functions as a way to save time and money are perceived by employees as a threat with a fear of being replaced. Employees are generally overwhelmed with the complexity and pace of change. Resistance builds up and causes necessary efforts to get side-tracked. Annoyance, frustration, demotivation, and churn are a by-product.

In a lecture on Strategic Change Leadership, Michigan State University Professor Dr. Cynthia Devers said, “People may prefer to be competent even when doing the wrong things rather than be incompetent when doing the right things. That fear is one of the biggest barriers to organisational change.”

People are fundamentally apprehensive of change. It is certainly difficult to choose between the current known state that has been mastered by practice and routine versus a ‘to-be’ state engulfed with uncertainty and lack of clarity. Thus, it is security and personal confirmation that takes precedence.

So, what contributes to the failure of the millions of dollars spent in digital transformation efforts? And how must companies tackle the mistrust in the process of change or in the intentions of the change agent? Where do organisations go wrong?

  •  Change management is an afterthought

All major transformation activities start with their focus on technology implementation. However, the influence it has on people is generally an afterthought. Meanwhile, creating change management and mitigation plan are usually dependent on the evaluation of the impact.

In today’s era of digitalisation, change management has come to the forefront. Involving people and aligning them to the prospective change, having their buy-in and making them part of the decision making will be the key differentiator in the failure or success of the initiatives.

The concept of increasing loyalty around everything that is about to happen and get people excited about the digital transformation agenda must be embedded at the inception stage itself.

  • Introducing too much too soon

For employees to cope up with the change, one needs to be sensitive towards how much a change disrupts their daily tasks and performance, their learning curve, and the upskilling. Business versus employee perception of what a necessary or desirable change is can vary at a department, band, or performance level.

Introducing too much too soon can often be a potential problem if a business doesn’t have a robust change strategy in place. Byte-sized information and internalising it before moving on is critical. Drowning the employees in a series of training and communication programmes can create panic, discontent, and overwhelming chaos.

A properly planned effort towards transformation with a series of quick wins coupled with a long-term vision creates sweet success while steadily moving towards the desired goal. A lack of comprehensive planning can lead to solutions that are unnecessary for an organisation’s needs. It can also lead to added costs, additional training, and unrealistic employee expectations.

  • Not aligning people’s interests with the business vision

In his book ‘When change happens’, Lalit Jagtiani said, “Effective change needs to be made relevant to the employees. People are driven to change when it is aligned with their personal aspirations. Facilitating this alignment is the most significant role a change agent can play, in even creating a desire for change.”

What is in it for me? Why should I invest my time and energy in this? What tangible difference will it make? These and many more such questions will keep haunting change facilitators if the people are not able to marry their personal growth path and ambition to the company vision and its demands from their roles. It is imperative to create a safe space for people to articulate their goals and help them align with the benefit of the change coming their way.

  • Change management is a project management activity

Change management usually gets a stepmotherly treatment and is unbudgeted because the value it brings is an uphill task to quantify. It is so deep-rooted in the non-tangible ways in which the company functions that putting together any form of physical output on a change programme is extremely difficult. Consequently, this under-investment in the change management programme makes it land into the laps of project managers.

Change management requires catalysts, change agents and iconoclasts who are willing to take the leap into the unknown and drive the company culture to adopt the new normal. These catalysts need blessings from the management to tackle resistance and create alignment. In addition to this, they also need a separate and uniquely placed team with professional training in dealing with people while having the business priorities in sight.

  • Ignoring the ‘Resistors’

Too often, an employee understands the new vision and is willing to make it happen. But usually, his/her path is obstructed by mountains of challenges. These challenges could be of various forms and sizes. Sometimes it is perhaps this person’s boss who agrees in principle to the change while in action s/he steers toward maintaining status-quo. Sometimes compensation or performance appraisal systems make people choose between a new vision or their self-interest. Narrow job descriptions that allow little wiggle room for employees to take risk or experiment also pose severe threats to achieving the company vision.

These are genuine roadblocks that undermine the entire effort and money spent in the process.

According to Harvard Business Review, in the first half of the transformation, no organisation has the momentum, power or time to eliminate all the obstacles. But the big ones must be confronted and removed. Action is essential, whether it is a person, a process, a regulation, or company structure. Only then can you empower people to maintain the credibility of the change being sought.

Final word

Digital transformation journeys are bound to bring about some disruption to the workplace. Yet, you can mitigate many harmful disruptions by making cultural changes, through education, and via actively communicating strategic change plans at the beginning to guarantee that everyone in the company is on board. It should be implemented gradually after considerable planning.

The author is co-founder, COO, chief strategy officer, Fractal Ink Design Studio

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