By 2022, it’s estimated that global spend on technologies and services that enable digital transformation will reach $1.95 trillion. Without proper implementation of these resources, companies are at risk of losing more than just money.
Keith Kitani, CEO of GuideSpark explains what companies need to do internally during change management and specifically who needs to be in charge.
Digital Journal: How important is digital transformation for business?
Keith Kitani: It isn’t just important — it’s an existential mandate. Businesses today are digital. Period. Everything is digital, from the way we communicate (email, Microsoft Teams, etc.) to the products we deliver to the methods of production. It’s simply impossible to survive by relying on analog methods. Industry research confirms the necessity of digital transformation: Gartner has found 67% of business leaders acknowledge their company must become significantly more digitalized in order to remain competitive. And, according to McKinsey, just 8% of companies believe their current business model will remain viable if their industry continues digitizing at its current rate.
DJ: Which sectors have been most successful with digital transformation projects?
Kitani: Digital transformation success has less to do with a particular business sector, and everything to do with the culture of the organization. Success requires a change-ready, agile organization with strong management. Certainly, some sectors can be better than others at specific parts of the process. For example, tech companies generally get the systems and technology part right, but struggle with the people part of the process — which is just as critical. In fact, even for digital-first industries like high-tech, media and telecom, only 26% saw digital transformation success over the long haul. In manufacturing industries, like oil and gas, automotive, infrastructure and pharmaceuticals, we see success rates fall even further, to between 4-11%.
DJ: How important is strategy when implementing digital transformation?
Kitani:Strategy is everything. You must begin by defining and articulating your priorities and tying the reason for the change to the organization’s strategic priorities. Simply implementing digital solutions because you “should” is a recipe for failure. Identify your “why” and build a communication strategy around that in order to achieve buy-in from leadership, employees and every stakeholder in the value chain.
DJ: How important is leadership?
Kitani:Leadership buy-in is essential, from the C-suite all the way down to front-line managers. Obviously senior leadership support is important, but many organizations overlook the critical role that front-line managers play in achieving successful transformation. They’re the conduit to employees. In order to be successful in driving change, adoption and transformation among the workforce, you have to enable managers to make their own decisions, clearly communicate the value proposition to employees and motivate change adoption. Here’s where performance management and compensation come into play — empowering managers with these tools can make a huge difference in gaining employee buy-in.
DJ: Why else might digital transformation initiatives fail?
Failure to address the “people” issue is one of the biggest obstacles. Not only are some people just naturally resistant to change, but when they don’t fully understand why the change is being made nor the benefits, they often react with fear, suspicion and defiance. Organizations must get ahead of that with clear, frequent communication about the “why.” Also, change fatigue is real — Gartner says the average employee experienced 12 changes last year alone, and the pace is only increasing, which makes it even more critical that organizations articulate the “why” and “what’s in it for me” for employees.
At the same time, change cannot happen in a vacuum. When the transformation is happening in a silo — a specific group tasked with implementation, for example — they often don’t take into consideration the impact, concerns and questions of the rest of the organization. Cultural silos can also be a problem. For example, there could be leftover “cliques” from an M&A, and those silos can also hinder digital transformation.
DJ: Conversely, what other factors make for a successful digital transformation process?
Kitani: Clear, proactive and continuous communication is key to digital transformation success. Organizations must communicate why the change is important for the company and for individual employees. In order to do so, companies must recognize that every employee is at a different stage in the journey, and they each receive and process information differently. That means the message must be directed and delivered to employees in a way that makes sense for where they are in the journey, and in the channel and format that resonates best for them. Also, communication is not a one-time thing. It must be repeated and reinforced for employees to understand and internalize the message. Otherwise, the money, time and human resources devoted to digital transformation will be for naught.
