Why Do Companies Struggle With Digital Transformation?

The next decade is almost here. With 2020 just on the horizon, companies of all sizes are faced with industry disruption, new technologies, and changing customer needs. Organizations with outdated systems, inefficient processes, and nimble competitors have reached a tipping point—they must either evolve or expire. In short, digital transformation is an absolute necessity.

While it can be daunting to be sure, it’s important to recognize that achieving success in your digital evolution is a realistic and manageable goal. This is true even if your list includes driving organizational innovation, evolving operational strategies, keeping up with market demands—or all of the above and more.

Companies know that leveraging digital solutions will change how they operate, and they expected to invest over $1.3 trillion in digital transformation efforts last year. Yet, according to Forbes, 70% of those initiatives will fail to reach their stated goals. Why? The key to successful digital transformation is to begin with a solid understanding of the root
of your issues—your purpose—and then align internally to plan and execute your unique transformation strategy.

Make no mistake, the struggle is real.

Organizations—and people—naturally struggle with change and transformation. And, once your organization has started down a path, it can be challenging to course correct and mess with the status quo. Plus, with expensive investments and leadership teams who do not want to change direction in the midst of failing efforts, it’s common to invest additional resources, time, and money—even to failing efforts—in the hope it will cause change.

If this sounds like you, you’re not alone. The good news is that you can begin to course correct if you work to reset expectations by considering how effectively you have defined and aligned around your organization’s purpose.


“Digital transformation is the integration of digital technology into all areas of a business, fundamentally changing how you operate and deliver value to customers.”

The Enterprise Project, What is Digital Transformation?


Determine the level of purpose and alignment you have achieved in your digital journey.

Start by assessing how effectively you have defined your transformation’s purpose and how broadly you have aligned the teams.

Purpose

Purpose involves a clear understanding of the goals and reasons that are driving your transformation initiatives. If you answer yes to all of the following questions,
your purpose is clear. If you answer no to any of them,
your purpose is unclear.

  • Have you articulated a clear purpose for your transformation efforts?
  • Is your purpose connected to something or someone that is valued in your organization or in the marketplace?
  • Has your purpose been communicated to all employees affected by your digital transformation?
Alignment

Alignment involves a shared understanding of how to achieve your purpose in a way that captures all necessary perspectives. If you answer yes to all the following questions, you have high alignment. If you answer no to any of them, you have low alignment.

  • Is your leadership team aligned around your purpose and approach?
  • Are peers and leaders aligned on your priorities, including any necessary trade-offs or requests for resources?
  • Do your teams understand your approach and are they able to execute against it?

Depending on your answers to the questions above, your organization will land into one of four categories:

Next steps if your organization is:

SWITCHING | Unclear Purpose/High Alignment

You may have developed a solid strategic plan, but market and consumer needs have since changed and you need to switch. Organizations tend to stick to the old plan instead of switching towards a new purpose because of group think, biases, or a highly consensus-driven culture. This approach can result in ad-hoc changes to the plan or a fear of abandoning it, both of which undermine ROI and business value by producing deliverables that don’t meet market needs, lose market share, and make teams feel defeated from doing throw-away work.

If your organization needs to switch, stop doubling down on your plan—even if you’ve made major investments—and start having honest, hard conversations. Empower the people engaged in your digital initiatives with the authority, responsibility, and necessary insights to act, achieve outcomes, and drive a new plan forward.

SAVVY | Clear Purpose/High Alignment

This is where you want to be. You have everything you need. Your leaders are aligned around a clear purpose and your plan reflects your customer needs and market conditions. Congratulations! You’re savvy. If your transformation is delivering what you want, you’re doing all the right things.

But it is also possible to be savvy and still not get the results you want as rapidly as you would like. Even with a strong purpose and good alignment issues can arise and it’s important to know where to look to refocus and keep your transformation productive. Most of the time, it’s because your leaders are aligned but your execution teams are not. Maybe initiatives are not properly prioritized or there is poor downstream communication, competition for resources, or siloed thinking instead of holistic thinking. If so, this will eventually cause resources to be overextended and your teams will miss opportunities and deadlines, slowing down your ability to deliver value. If this is the case, keep your eyes on the prize and intervene with your teams to address the issues impacting performance.

SWIRLING | Unclear Purpose/Low Alignment

You feel like you are swirling when your leaders have not defined and aligned around a thoughtful purpose. You know something must change, so you begin disparate or short-term digital initiatives that often lack clear goals but may result in a few short-term wins. Decisions may be made at the executive level without considering the implications or impacts to other business lines, departments, or customer experiences. Without a clear plan or vision, digital transformation is chaotic and priorities constantly shift. Execution teams get hit with decision fatigue. Leaders think investing more money, resources, and time will cause the swirl to stop. Instead, this results in a long and cumbersome journey delivering poor business value and employee morale.

If you are swirling, stop throwing things at the wall to see what sticks and take a stand for change. Get your leadership team together for a focused conversation around your vision and goals and define the outcomes necessary to achieve those goals. Start with small pragmatic steps to gain confidence of the execution teams and to show progress.

SLUGGISH | Clear Purpose/Low Alignment

On the other hand, you may have a clear purpose, but are lacking alignment across leadership. This can make progress feel sluggish. It often presents itself in the all-too-common tug-of-war between IT and communications/marketing departments over who “owns” digital. The reality is that digital should permeate all areas of your business so, without alignment, you’re faced with scattered thinking and conflicting priorities that impede the progress of your digital plan. Individuals drive what they think to be the right change, while execution teams think that they are in charge, but hit impasses when initiatives begin to intersect. As a result, activity is mistaken for progress, execution teams give up in exasperation, and you deliver a low ROI.

If your organization feels sluggish, stop working in siloes and start collaborating. Figure out how you can work together to execute on outcomes through a clear, coordinated plan that captures all necessary perspectives. It is especially important to consider your organization’s or team’s readiness for change and define a shared vision of success, as well as the necessary feedback mechanisms, so that you can use objective data to drive decisions and, more importantly, progress.

Set yourself up for digital success.

Knowing where you are in your digital journey can help you determine the successes and pitfalls of your current effort, as well as help you pinpoint what’s needed to improve. But ultimately, real change requires bold vision and tactics, coupled with pragmatic shifts across the entire enterprise.

Transformation doesn’t happen overnight. So, prepare your stakeholders for incremental change over time. Make the time, talent, and budgetary investments needed to create change. Commit to the process. Use data to drive your decisions. Prioritize activities according to urgency and operational needs. And take these other best practices into consideration as well:

Keep business moving
Because large-scale changes require significant investment before ROI is realized, develop a realistic set of goals that are achievable in the next few months and will have meaningful impact on your business in the near-term, while simultaneously building on your holistic long-term transformation.


Focus on people, not just technology
Companies often cite outdated or absent technologies as their roadblock to change. However, in our experience if you lack the right teams and processes, even the most advanced technologies will fail you. It is essential to invest in digital talent.


Drive outcomes over outputs
Success comes from meeting 100% of your goal, not from being busy 100% of the time. So, get your teams focused on outcomes instead of output. Then track progress against outcomes, from individuals to teams to broader initiatives.

In order to thrive in the future, you need to weave your digital strategy, goals, and objectives into the culture, operating models, and initiatives throughout your organization. Celerity has helped organizations at every phase of transformation hone and quicken their strategy and efforts through a pragmatic approach that creates impact today, tomorrow, and through all the disruptions ahead. You don’t have to do this alone. Let Celerity help you get unstuck and take meaningful steps toward your digital and cultural transformation.

If you’re looking for practical tips to ensure your digital transformation journey puts you in the 30% of companies who meet or exceed their goals, watch our recent webinar, Think Small: The Realist’s Case for Pragmatic Transformation. Celerity CEO Ken Quaglio was joined by Forrester VP and Principal Analyst, Nigel Fenwick, and SVP of Mortgage Lending at Navy Federal Credit Union, Randy Hopper, to discuss how organizations like yours can capitalize on your investments in digital.

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