Digital transformation is the process of using technology, people and processes to restructure an organisation to improve business performance.
The process of digital transformation starts with an awareness of the need for change. Changing the language you use, the office environment, breaking down silos, and creating a more informal working environment. The second step is changing the KPIs used for individuals, teams and the wider organisation. Thirdly, digital transformation is about the decisions you make to inculcate the change in the organisation. Digital transformation is a signal for the entire organisation. It is not only the task of the Digital Transformation Officer; it is everybody’s job to create the change through the actions they take.
A study conducted by McKinsey in which 1793 representatives of regions, company sizes, industries, functional specialities and tenures were surveyed about the digital transformation projects they’ve been involved in shows that eight in ten respondents have been part of a digital transformation project in the past five years. However, less than 30 per cent of the companies report a successful transformation and less than 16 per cent say the digital organisational transformation has improved performance and prepared them to sustain change in the long term. Success also varies by companies’ size. In organisations with less than 100 employees, respondents are 2.7percent more likely to report a successful digital transformation than in organisations with more than 50 000 employees.
The same study shows that the contributing factors to a successful digital transformation fall into five categories: having the right digital savvy leaders in place, building capabilities for the workplace of the future, empowering people to work in new ways, giving day to day tools a digital upgrade and frequently communicating via traditional and digital methods.
The role of the digital leaders in the transformation process
To steer the organisation in the right direction, companies need committed and dedicated Chief Digital Officers. The results of the study show that less than one-third of the companies engaged in digital transformation hire a CDO. The companies with savvy digital leaders are 1.6 times more likely to succeed in the efforts to transform the companies.
Building capabilities for the workforce of the future
The study shows that developing talent and skills is one of the most critical factors for success in a digital change effort. The first thing that companies have to do is redefine the job responsibilities, so they align with the digitalisation strategy. When this practice is in place, employees are 1.5 times more likely to report successful digital transformation efforts.
Two other important roles are the integrators and technology innovation managers who connect the traditional and digital parts of the business. The integrators translate and connect the digital capabilities with the existing way of working. Technology innovation managers have specific technical skills to lead work on the company’s technological innovations. Success is more likely to happen when companies implement organisation-wide plans to hire talent with specific skills needed in the digital transformation process. Employers that use innovative recruitment methods like technology conferences and hackathons are at least twice as likely to succeed in attracting top digital-savvy talent.
Empowering people to work in new ways
Changing organisational culture is one of the most important aspects of the digital transformation process. Research conducted by McKinsey shows that there are two main ways in which companies are empowering their employees. The first is establishing new ways of working like a continuous improvement or an open work environment. Another is empowering employees to choose what methods they want to adopt to support digitisation. The success of the change process is incumbent upon employees at all levels of the organisation. Team members should be encouraged to challenge the old ways of working, experimenting with new ideas and more importantly work cross-disciplinary. Employees that meet these criteria are 1.6 times more likely to succeed in their efforts.
Upgrading the daily way of working to support the digital strategy
For employees to embrace a new way of working, the study reveals four changes that involve the use of digital tools. The first change consists in adopting digital tools that make information more accessible across the organisation. Transformation is twice as likely to happen when organisations implement self-serve digital technologies. Another thing that companies can do is to modify their standard procedures to adapt to the new technologies. Additionally, a focus on data-based decision making and the use of interactive tools can speed up the transformation process.
Frequent communication via traditional and digital methods
Clear communication has always been the key to successful transformation efforts. It is imperative for employees to understand where the organisation is headed and why the change has to happen. Another important measure is senior leaders instilling a sense of urgency for the transformation to take place in their units, a practice where effective communication is essential. The study shows that using remote communication tools is more effective than traditional channels.
In conclusion, digital transformation is about being in a state of constant improvement. It is important to have the right digital savvy leaders in place to reinforce new behaviour and formal mechanisms that have proved to support organisational change. However, it is everyone’s job to make the digital transformation happen so recruiting people with the right skills and experience to take on the new challenges is essential. These measures coupled with a clear strategy communicated to all team members will speed up the transformation process.