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by James Marwood, head of Business Change and Transformation
Digital transformation is the topic of the moment. Across the public and private sectors, organisations are looking to build and exploit new capabilities and increase the value of existing ones by increasing the take-up and use of digital, data, and technology. Usually, these are focused on improved interactions (with users, citizens, customers, employees, and suppliers), on better understanding and responsiveness to market or environmental shifts, and on driving improved collaboration in internal operations. These are all desirable goals, and especially for the providers of our essential public services who are dealing with significant challenges from volatile demand, a need to be ever more cost-effective and able to deal with effects of major events such as COVID, Brexit and an ageing population.
Despite this, most digital transformations fail to deliver on the anticipated outcomes. According to McKinsey only 23% of digital transformations added value, with only 16% delivering the intended levels of sustained transformational improvement. The reasons for this are as easy to explain as they are hard to avoid. Forbes is typical blunt:
…these are initiatives with limited scope, often led from the middle of the corporation, with mostly passive support from the top management, initiatives that are merely tacked on to internally focused command-and-control hierarchies.
So far, so depressingly familiar. The reasons for this behaviour is complex, and beyond the scope this short piece. However, I would argue that a fear of discomfort sits behind a lot of this. Organisations, especially those delivering services used by large numbers of customers or citizens are complex socio-technical systems. They have evolved to be the shape they are because of the forces acting upon them, both internal and external. However, once set this shape becomes very hard to change. Ask anyone who has tried to change habits around eating, exercise, or sleep. Structural change of this type is incredibly uncomfortable, even painful.
Anyone involved in digital transformation will tell you the key factors to consider – the importance of people over technology, the vital role active leadership has to play, the need to focus on value chains, the need to treat data as a strategic asset. Getting these right is hard enough, but fail to address the underlying commitment needed by the people leading, delivering, and experiencing the change. This will be uncomfortable. From the need for leaders to focus on new areas of activity, for people across the business to collaborate outside of their usual teams, to the need for careful balancing between having pilots and experiments that ‘Fail fast’ and giving these enough time to show value. Successful digital transformation asks a lot of everyone involved.
This requires decisive and inspirational leadership, creating and telling a clear change story that drives a sense of both urgency and shared ownership. This change story begins in the boardroom, but it doesn’t live there. It must spread throughout the organisation, from senior execs right down to the teams delivering the services to be transformed. This isn’t something that can be ‘done off the side of the desk’ with managers investing just a few hours a week. External support can be a huge help, but the first question to ask is “How do we deal with the coming discomfort, and how do we keep ourselves on track”.
This is key to the approach we take at i3Works. From working with the leadership to team to build that compelling story, to embedding and working hand-in-hand with the teams delivering the change, our support is focused on the holistic structure, direction, and detail required to drive truly transformational change.
If you’d like to know more then please get in touch.
