The momentum for companies to undergo digital transformation continues to grow. However, too often, digital transformation is thought of as just a technological change, forgetting that we need stewards of change. It turns out that for companies to succeed with digital transformation, they have to shift focus beyond technology and invest in their people.
Telstra, Australia’s largest telecommunications carrier, offers digital transformation services worldwide. As the underbelly of countless enterprises and organizations around the globe, Telstra surveyed 3,810 respondents from 12 industries in 14 markets around the world on where they were on their transformation journey.
As highlighted in the resulting Disruptive Decision-Making Report (as well as other research) businesses are actually further along with transforming their technology than they are with changing the corporate culture and individual mindsets of employees — both of which are necessary to profit from digital transformation.
In fact, Telstra found that organizations currently have the lowest confidence in how their people are contributing to digital transformation decision-making, when compared to facets such as technology and processes.
It’s More Than Dropping in Technology
According to the survey, organizations that have devoted the most attention to people and processes are more digitally mature and more advanced in their transformation journeys. In short, companies that overlook or ignore the people side of digital transformation will fail.
But like so many aspects of digital transformation, achieving this focus is easier said than done. The survey’s authors recommend three steps companies can take to improve the people dimension of digital transformation:
- Understand what digital transformation means for your organization
- Empower people and strengthen processes
- Be confident in your technology so you concentrate on driving change
These recommendations support the idea that the only way to thrive in the people dimension is by ensuring that digital transformation isn’t seen as an outside force that is inflicted on staff. Instead, it must be done in partnership, with those at the C-level setting a vision that has buy-in at all levels of the organization.
To gain a better sense of how companies are navigating these changes in practice, we looked at some best practices and case studies. We summarize them below.
Change Is an Organizational Anathema
“We know from neuroscience – and from everyday life – that groups tend to resist change,” says Ellen Leanse, chief people officer at Lucidworks, who has taught neuroscience and innovation at Stanford University. “Employees join an organization, and when it comes time to change, they tend to grasp to the status quo rather than look objectively at what the change will bring about.
Leanse, who speaks of the brain as “an ancient technology we use to navigate modern life,” explains that the brain tends to resist change and unknowns as part of its default fast thinking mode.
“The brain, ultimately, is a survival device. It optimizes for familiar behavior and often resists objective, open-minded, curious thinking. After all, it has no proof that the ‘‘new’’ will keep it, or us, safe and alive. Research shows that shared beliefs and behaviors stay even more entrenched in group settings. It’s easy to see some evolutionary benefits for that sort of psychology. Yet we all know the price when ‘groupthink’ sets in.”
To address this, Leanse suggests getting buy-in on a shared vision: something the group is willing to agree is a worthy goal. Then, emphasize cooperation and curiosity as paths to achieving this vision. This helps guide groups out of familiar, comfortable behaviors and find motivators (such as social connection and a sense of learning) that increase the satisfaction associated with the goal.
Help them feel like owners, empowered to meet their own (and shared) goals, as well as the organization’s. “When transformation is seen as a shared journey to a result a group agrees to,” says Leanse, “discomfort and resistance can fall away.”
Culture and People Are as Important as Technology
As new technology is being inserted into nearly all aspects of the business, a profound shift is taking place. As an article in the Enterprisers Project points out, this shift has a significant impact on company culture.
“Digital transformation initiatives often reshape workgroups, job titles, and longtime business processes. When people fear their value and perhaps their jobs are at risk, IT leaders will feel the pushback,” write the article’s authors.
To achieve this unity, the article suggests IT leaders should start with empathy to understand fully the anxieties and fears staff might have about integrating new technology.
A 2018 survey from McKinsey & Company came to similar conclusions. While emphasizing the importance of technology in transformations, the report also found that companies with strong leadership and enterprise-wide workforce planning and talent-development practices had higher success rates than those that did not.
Empower workers. In an MIT Sloan Management Review analysis of digital transformation, George Westerman, Didier Bonnet, and Andrew McAfee argue that worker empowerment is vital to positive digital transformations. This can involve showing workers how the new technology will help them do their jobs more efficiently or the benefits of a more digital workplace that allows staff greater freedom to work when, where, and how they want to.
The McKinsey survey also reinforces the idea that workers should be empowered. “Another key is giving employees a say on where digitization could and should be adopted. When employees generate their own ideas about where digitization might support the business, respondents are 1.4 times more likely to report success, it says. The report also recommended that workers play a key role in enacting changes.
Prioritizing culture. One of the key traps many companies fall into is underestimating the importance of culture in digital transformation. As Greg Satell argues in a piece for Inc., digital transformation is human transformation. To gain buy in, a strong vision that aligns with business objectives is crucial. But so is starting transformation with automation that improves the day-to-day lives of staff, reducing the need for tedious tasks.
These articles and the Telstra survey illustrate that technology can take an organization only so far when it comes to digital transformation. People play a key part, as technology can’t replace the need for organizational cohesion that comes only when everyone from the C-suite and down understands why change is necessary, what the changes will be, and how the business will improve as a result.
But it all starts with changing what we look for in employees, says Leanse. “By changing our perspective from looking for people who will just follow orders, we need to make sure that we hire people who have excelled in cooperation and who embrace empowerment.
Cooperation says we are all in it together, she explains. And empowerment means you are giving your employees the tools to learn, grow and control their autonomy — while they help the organization.
Dan Woods is a Technology Analyst, Writer, IT Consultant, and Content Marketer based in NYC.