Knowing why transformations fail is a very important step towards getting it right. As transformations vary widely from company to company and team to team, pinpointing the reason behind the failure of Digital Transformation is by no means an exact science.
Apart from the variables unique to each organisation, here are 10 reasons relevant to any business or team.
1. The Narrative
Everything we do requires a narrative. Every design should have a story and every action a WHY. If not, everything we do is impulsive and meaningless.
Successful outcomes of most strategies, actions, or decisions rely heavily on the narrative aligning management and their teams. With everyone aligned, getting buy-in from the entire organisation is far more attainable – critical for successful transformation.
Employees have their own perspectives on why transformation is necessary for their own work environment. Your narrative should consider the outcomes and benefits of every department and employee, no exclusions.
2. Lack of Performance Aspirations
Organisations fail to set performance aspirations that are based on the new growth potential that comes with transformation.
A successful transformation strategy will lead to either
shortened sales cycles,
better team capacity management,
more accurate decision making.
Setting new performance aspirations will inspire team individuals to perform better and it links their outcomes to their involvement and commitment to this new way of working. Getting this right leads to inevitable growth.
This is a great way of getting teams to use the transformed systems, processes, and ways of working to their own advantage. This is vital for getting key role players on board and keeping them there. Ensuring the benefit of individuals will lead to the ultimate benefit of the organisation.
3. Mis-aligned or over-complicated incentives
Companies often fail to align incentives.
You will often find situations where the stock options are not the perceived value, especially as the perception of value differs from one employee to another. Another regular case is that the incentive compensation is too complicated. You need to align the incentives, and that includes going beyond the finances.
Focus on the employees’ aspirations and bring the two together. The most important thing lacking is executives’ ability to recognise the behaviors that drive the outcomes for the initiatives that really matter. This transformation to digital gives the organisation the perfect opportunity to revisit KPI measurement. We are done with 9 to 5’s. Out with time-clocking and in with proper KPI management based on deliverables and deadlines. People can finally be measured by their output instead of working hours.
4. Culture initiatives and performance tracking
Organisations fail to track the above-mentioned initiatives, which can easily total over a hundred and even thousands. You need a process and structure by which you track these initiatives, built into agile cloud technology. This has a major influence on company culture which many companies fail to capitalise on.
5. Legacy processes and procedures
We are at the intersection of paths between a new digital economy or obedience to the traditional world of work. It is the decision between one or the other that will determine our place in the future of work.
Legacy processes and procedures have no place or relevance in the new world of work. With a clean slate, we have the opportunity to rewrite the rule book from scratch.
6. Empowering the weakest links
Most CEOs have a good sense of the various abilities of their teams. Each one will name his champion horses, the talent that brings the winnings, and the future leaders of the organisation. Then there is mid-tier, the guys that will get the job done reliably but won’t pull any rabbits from any hats. Then there are the bottom-tier people where the real challenge lies. Questions hover around why they were hired in the first place. CEOs will have the exact same rankings on their executive teams too. It is vital that changes be made to the team where necessary. Many teams are held back by unwilling members not changing their ways. This is a massive barrier to transformation. The weakest links should not have the power to prevent the organisation from changing the way business can be done?
7. Too much focus on activities
Companies tend to focus too much on the activities as opposed to outcomes. Both are important, but results take preference. This comes back to the narrative. Every team activity should have a narrative, a strategy with a clear goal and desired outcome. There should be no place for purposeless activities in the workplace, that’s what friends, family, and the weekends are for.
8. Lack of Preparation
Organisations tend to dive into the next activity or solution without adequate preparation. As a result, many software implementations go dormant, wasting a great deal of company resources. It is easy to get lost in the presentation, the “sexy” stuff, digital dashboards, and analytics. However, without a strong foundation, narrative, and adequate planning with a people-centered approach, the chances of transformation success will be slim.
9. Little or no team depth
Most companies lack a deep bench of talent and capabilities. They rely on their first line-up for any given challenge or situation. Can you imagine what New Zealand rugby would have looked like without their depth on the bench? Far too few companies have come to know the value of extended teams, enriched talent pools for when you need them most.
The way the world is changing, now is the right time to build a bench of extremely valuable talent and capabilities without the full-time salary risk. In times of significant change and transformation, having the right person for the task can put you ahead by miles.
The same goes for the board directors and their advisors. Technology has earned its seat around this table. Technology has become a business-critical component of almost every department. Not having a technology head around the table, where the most critical decisions are being made, is reckless.
10. Not Obsessing Over Growth
My favorite reason for transformation failure is they don’t have enough focus on growth. Real growth. Not business as usual with a gradual increase in revenue as you gain market share. I am talking about real growth. Expanding into other markets, industries, or regions, utilising technology to optimise operations and lower costs. Explore ways of unlocking additional revenue streams in the current supply chain.
To succeed at transformation and get ahead of change, business leaders need to obsess about growth. Digital Transformation is one of the key contributors to business growth. The CEO should have his thoughts anchored on how to grow the business. As obsessed as the CFO ought to be about costs, the CEO should obsess about growth. Growth can happen in any part of the business at any given time no matter how big or small. It is often the small wins that contribute to the largest amount of sustainable growth. Growth should be an active and live strategy, a living thing that evolves on a daily or weekly basis of which brand, sales, and marketing are small components.
What are you doing about your growth strategy? You are an expert in your field, spend your time where it is most valuable to the organisation, and let us take care of your growth. Choose a growth partner capable of adopting your aspirations as their own and grow as a team.
At Digital HQ we obsess about growth. Let’s have a no-obligation coffee over a video call and discuss how we can help grow your organisation.
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