Digital Transformation 2.0: What’s Holding You Back?
“Would you tell me, please, which way I ought to go from here?” “That depends a good deal on where you want to get to,” said the Cat. “I don’t much care where–” said Alice. “Then it doesn’t matter which way you go,” said the Cat. “–so long as I get SOMEWHERE,” Alice added as an explanation. “Oh, you’re sure to do that,” said the Cat, “if you only walk long enough.”Alice knows she wants to go somewhere. She even has the sense to ask for directions in unfamiliar territory. But without a destination, she can’t know which way to head, and she’ll never know if she arrives. Many company leaders are like Alice. They recognize the need to evolve their operations, business strategy, and customer experience in order to succeed in a new digital era. But too often, they embark on their digital journey without defining a destination. Despite early momentum, their digital transformation stalls because they never articulated what the end goal, or even the second phase, actually look like. The only way to succeed is to know your destination. Maybe you have a vision for what this looks like. I’m here to put a name on it: digital adoption.
What is digital adoption?Digital adoption is defined as achieving a state in which people use digital tools as they are intended and to their fullest extent. It is not the result of a single software implementation. It’s not even the product of a new digital business model. It’s about synchronizing the human factor and the technology factor so that digital tools fulfill users’ needs. While it will look different for each individual company, digital adoption is the universal end-goal for all digital transformation efforts. To achieve it, you need a clear path to follow. You need a digital adoption strategy.
Why you’re struggling to get thereIt’s clear that companies understand the need to digitally transform. Worldwide spending on digital transformation technologies is expected to exceed $2 trillion by 2021, according to a survey report from Capgemini. Despite a strong investment commitment, the vast majority of companies are struggling to turn their vision into a successful transformation journey. They’re still stuck at the first step. Only 35% of business executives believe they possess the leadership capabilities required to execute a successful digital transformation, according to the report. Less than half believe they have the digital capabilities necessary to improve the customer experience (40%) and internal operations (36%). The problem isn’t lack of will. It’s a lack of a digital adoption strategy.
Brace for digital transformation 2.0There are many challenges that prevent companies from breaking out of the first phase of digital transformation. With a digital adoption strategy, you can overcome all of them.
Challenge No. 1: Aligning leadership around a clear visionYou can’t reach the next phase of digital transformation without first agreeing on a vision. You need to answer the question, “Where do you want your digital transformation to take you?” Few organizations today have this clarity, according to the Capgemini report. Only 31% of organizations believe senior executives share a common vision of how the business should transform through the adoption of digital technology.
Challenge No. 2: Creating a solid governance structureTraditionally, the CIO led the way when it came to any large-scale technology project. But for a successful digital transformation, you need a cross-discipline approach and strong leadership alignment. The CEO, CDO, CHRO, CFO and possibly other leaders will all be responsible for creating digital initiatives and monitoring progress. However, just 32% of organizations feel there is enough clarity in the various roles and responsibilities for digital initiatives.
Challenge No. 3: Painting an accurate picture of the current stateIt’s difficult to diagnose exactly where you stand in the digital transformation lifecycle, but it’s critical for planning your next step. You need to use data to identify where you have successfully digitized processes, find potential areas to optimize, and raise employee productivity. Monitoring the use and effectiveness of existing technology is key to assessing the current state.
Challenge No. 4: Fostering employee engagementYou won’t achieve the ROI you want if you lack employee engagement. If you want your employees to be receptive to your vision and promote the digital strategy, you must increase engagement across all ranks of the organization. Currently, just 36% of organizations have avenues for all employees to participate in the conversation around digital initiatives.
Challenge No. 5: Overcoming cultural barriersA range of cultural barriers has the power to derail your efforts and prevent you from reaching digital transformation 2.0, let alone achieving digital adoption. Employee resistance is perhaps the biggest and most threatening cultural obstacle. There are many reasons employees resist change, but they all stem from fear:
- Fear of the unfamiliar
- Fear of incompetence
- Fear of failure
- Fear of losing status
Dive deeper: How employee resistance to change can thwart the most promising change effort.Leaders must also figure out how to engage four generations during a period of change. They must also determine the best way to train a multi-generational workforce on enterprise technology. For example, your employees from younger generations might be more accustomed to advanced consumer-grade technology, but that says nothing about their aptitude for workplace software.