{"id":192,"date":"2020-12-05T19:36:42","date_gmt":"2020-12-05T11:36:42","guid":{"rendered":"https:\/\/www.praxonomy.com\/blog\/?p=192"},"modified":"2021-07-31T01:15:53","modified_gmt":"2021-07-30T17:15:53","slug":"3-digital-transformation-challenges-and-how-to-overcome-them","status":"publish","type":"post","link":"https:\/\/www.praxonomy.com\/blog\/3-digital-transformation-challenges-and-how-to-overcome-them\/","title":{"rendered":"3 Digital Transformation Challenges and How to Overcome Them"},"content":{"rendered":"\n

Digital transformation continues to take precedence as a strategic priority for many organisations in spite of the pandemic. In fact, it has become a catalyst: a recent study by communications platform company Twilio revealed that 97% of enterprises<\/span><\/a> accelerated their digital transformation efforts because of COVID-19.<\/p>\n

However, digital transformation initiatives are never easy. They\u2019re a challenge to implement. According to a recent survey by Bain & Co., of 1000 companies involved in digital transformation efforts only 5% met or exceeded expectations<\/span><\/a> that they had set for themselves. Seventy-five percent (75%) \u201csettled for dilution of value and mediocre performance.\u201d<\/p>\n

Let\u2019s take a look at some of the challenges that impede the success of digital transformation initiatives.<\/p>\n

1. Fear of Resistance and Disruption<\/h2>\n

Leaders often understand and appreciate the vision of digital transformation projects but stop short of fully committing to what it takes to succeed. Without a firm, steady commitment to the project the initiative will fail.<\/p>\n

Given the amount of effort and investments required by digital transformation projects, there is often a \u201cwait-and-see\u201d approach towards its adoption in many organisations. One of the reasons for stalling is the amount of resistance and disruption it will cause.<\/p>\n

How to Overcome This Roadblock<\/em><\/h3>\n

Leadership is an integral component of successful digital transformation projects and implementing effective change management practices.<\/p>\n

PwC\u2019s recent 2020 Digital IQ Survey<\/span><\/a> shows that companies who have successfully implemented large-scale digital transformation projects<\/strong> (They call these companies the \u201cTranscenders.\u201d) did not just \u201ctalk\u201d about or \u201cencourage\u201d change; they mandated it.<\/strong> This meant collaboration and cross-functional work amongst teams, while providing the tools needed to adapt. Through these methods, they were able to develop a culture that was inherently resilient and innovative.<\/p>\n

Interestingly, Cate Gutowski, then vice president of GE Commercial, took a rather unconventional yet similar approach<\/span><\/a> when tasked to lead the implementation of digital technologies into the company\u2019s 25,000 global sales operation. She disregarded the \u201cnaysayers\u201d and simply forged ahead with the digital transformation project. By doing so, she says, the organisation created a group of early adopters and innovators. She liked the Law of Innovators theory, from the book Start with Why <\/em>\u2013<\/span><\/em> which essentially states that in order to grow an initiative into a movement, one has to identify the innovators, who are the first 2.5% of adopters. By focusing on that group, Gutowski says that one can create influence and drive any type of change. They become digital advocates and evangelists for change.<\/p>\n

Others might caution against this approach, arguing that it might generate resentment amongst employees. This Corporate Board Member article<\/span><\/a> states that leadership of organisations need to demonstrate credibility, alongside \u201cpatience, resilience and the ability to build consensus.\u201d This can be achieved by listening to feedback, addressing concerns, and welcoming input \u2013<\/span> even when they\u2019re wrong.<\/p>\n

It is important to be prudent in choosing the right approach for your organisation. It is not a \u201cone-size-fits-all\u201d solution. Whether it be a hard-line stance towards change, or a slower, more employee-centric method (or a combination of both), a baseline requirement is that of strong leadership, often demonstrated by a steadfast commitment to the project.<\/p>\n

2. Lack of Employee Ownership and Required Skillsets<\/h2>\n

Effecting change of a considerable scale can be an uphill climb. If that roadblock is compounded by a lack of employee training for new and desired technologies, any digital transformation effort is bound to be upended.<\/p>\n

Gartner<\/span><\/a> states that what is often missing is an employee understanding of how digital impacts the business. Without this crucial piece of the puzzle, it becomes difficult for them to buy into the need to update their skillsets and subsequently own their roles in the process. They need to be able to see the \u201cBig Picture,\u201d and obtain insight into how they contribute to the organisation\u2019s success.<\/p>\n

How to Overcome This Roadblock<\/em><\/h3>\n

The onus is on leaders to understand that digital transformation issues are not specific to technology but are a talent and cultural issue as well. It is important to align talent and culture with the goals of the business. This can be accomplished by developing leaders or hiring individuals who are digitally-minded (i.e. have led initiatives of moving from a manual platform to digital), and by making technical training available to those whose roles are impacted by the change.<\/p>\n

On a day-to-day tactical level, utilising the company\u2019s communication channels (e.g. workshops, meetings, newsletters, emails, etc.) to outline the goals of the digital transformation project, as well as what it entails, can be helpful. It is important to provide information, especially at the onset of the journey \u2013<\/span> so employees understand and assume ownership of their own roles. A roadmap keeps them engaged.<\/p>\n

3. Differing Expectations Around Digital Transformation Initiatives<\/h2>\n

In a study<\/span><\/a> conducted by PricewaterhourseCoopers (PwC) and Corporate Board Member, fifty-eight percent (58%) of directors<\/em> said their board was \u201cinformed enough to support the company\u2019s digital efforts.\u201d But eighty-two (82%) of executives<\/em> surveyed believed their board was informed enough to provide oversight. This highlights a misalignment: there is a prevailing sense of overconfidence in the board.<\/p>\n

This can be attributed to differing beliefs around what digital transformation entails. Executives tend to view digital transformation as the process of \u201cmodernizing the brand\u201d or updating business functions with new technological capabilities. For directors, however, digital transformation impacts the entirety of the business model with the potential to reinvent or \u201credefine the company.\u201d If directors and executives are not on the same page, it becomes difficult to measure the success of transformation initiatives. Their goals become vastly different.<\/p>\n

How to Overcome This Roadblock<\/span><\/em><\/h3>\n

According to Mitch Gordon, former CEO of Edition Capital Partners and director at Mesa Air Group, says the board needs to be able to ask executives the right questions<\/strong>; this brings any misalignment issues to light. But in order to ask the right questions, there needs to be diverse skillsets and mindsets in the boardroom. Diverse boards who understand how to leverage technology and appreciate innovation to accomplish transformation goals have a distinct advantage over boards who don\u2019t.<\/p>\n

Once the board and management have their goals (including risk appetite, old and new technology integration, security, etc.) aligned, management should discuss the project in an accessible and relatable manner. Assumptions on the depth of directors\u2019 technical and digital knowledge shouldn\u2019t be made. Executives need to equip the board with sufficient information to make them digital savvy enough to understand how plans and tactics are working towards strategic goals.<\/p>\n

Why Organisations Should Still Do It<\/h2>\n

For all the roadblocks that organisations might potentially face, the abovementioned PwC Digital IQ study highlights the payoffs enjoyed by companies (the “Transcenders”) who have consistently invested in new, innovative digital ways of working. Here are some interesting statistics:<\/p>\n