How Change Management can Support Digital Transformation
When I meet with clients or colleagues I like to ask them for their definition of digital transformation. It varies widely from department to department and leadership to rank and file. The definition I share with them is "comprehensively changing business processes and or experience journeys by integrating digital technologies, processes changes and people skills, with the intent to create competitive advantages and accelerate profitable growth."
Comprehensively is the key work. The online definition of comprehensive, "in a way that includes or deals with all or nearly all elements or aspects of something." So digital transformation is about big change across a process, line of business, division or company.
Digitization is about automating processes. Applying technology to do things faster, smarter and with a higher quality than humans can do. This is more limited execution versus a transformational effort.
Another angle of digital is application modernization, which is about upgrading frameworks, language and relationship to an architecture. This could be a piece of digital transformation as part of a larger transformational effort.
As the core of digital transformation, technology will enhance an existing process, replace an existing process, or it could be an entirely new business process. In any of these three possibilities, process is going to be effected. When processes are changed or introduced, they will affect people at some level too. This could be a reduced role, an enhanced role or a completely new way of someone doing a job. In any of these scenarios, training and or awareness will be needed.
Unfortunately, many companies don't realize the complexity of digital transformation. According to PwC's Global Digital IQ Survey, more than 50% of executives say their businesses are not focused on executing their strategies, and few are able to bring their digital ideas to market in line with their vision. See my article Digital Delivery: Closing the Business-IT Gap
In this article I talk about the gap between business and IT, and the lack of an enterprise view and lack of detailed use cases. The lack of a change management plan is the third reason why companies are not able to bring their digital ideas to market. The recommended enterprise view provides vision for the technology, and use cases provide detail around processes and people. A change management plan puts it all into action.
Change management as the name states is the management of change. While transformation is comprehensively changing something. The two efforts are intertwined by change. In order to increase the chances of success when introducing digital transformation, you need to have a strong change management plan.
Companies and individuals inherently resist change. Here are Eight Reasons for Resisting Change (Schermerhorn, Hunt, & Osborn, 2005):
- Fear of the unknown
- Lack of good information
- Fear of loss of security
- No reasons to change
- Fear of loss of power
- Lack of resources
- Bad timing
The good news though is that even though "we" have these reasons not to change, we are also wired at the same time to be able to change and adapt. We can change and adapt by repeated experience of the experience itself. The key is to get the new experience introduced in the first place. Therein lies the need for a solid change management plan that addresses the reasons like those stated above, and gets the change into the hands of those affected by the change.
So a change management plan that parallels a digital transformation effort is critical. The following is a framework for a change management plan.
- Defining measurable stakeholder goals - What are the sets of quantitative and qualitative goals by stakeholder? How can each functional area point to and understand the benefits they will get.
- Creating a business case which is continuously updated - What is the rationale for a digital transformation initiative in the first place? What is the overall benefit to the company and the employees short and long-term. Show the plan and how the company is going to be able to execute.
- Monitoring assumptions, risks, dependencies, costs, return on investment, and cultural issues - Digital transformation is dynamic so keeping track in real-time will help to keep the efforts from being derailed. Show progress and any wins along the way.
- Creating communications that informs various stakeholders of the reasons for the change, the benefits of successful implementation, as well as the details of the change - This is absolutely critical to execute well since it can address many of the reasons for resistance to change. Communicate to all of those affected.
- Devising an effective education, training and/or skills upgrading scheme for the organization. - Digital transformation affects people, so show in detail the plan for those affected in getting up to speed.
If you want to be in the 50% group that are able to bring their digital ideas to market in line with their vision, then a robust change management plan should be created in parallel to a digital transformation effort. The two efforts are intertwined. Use change management plan each and every time, and adoption will go smoother and quicker.