Digital transformation is when an organization uses new technologies to reshape the way they do business, often making their processes more automated, efficient, and error-proof. Digital transformations can create enormous opportunities for innovation, but theyâre notoriously difficult to pull off. Â
Why is it so hard? Successful digital transformations require three things: technology, process, and people, and getting buy-in from your employees is no small task. This is because introducing new technology often leads to significant shifts in how employees carry out their work, sometimes changing the nature of their work completely.
According to data from a recent Forrester study commissioned by Nautical, focused on launching an online marketplace, 56% of respondents agreed that the willingness of internal teams to adopt and use new technology was challenging or very challenging. 61% of respondents agreed that resolving internal knowledge gaps was challenging or very challenging when launching new digital marketplaces.
Though some resistance to internal adoption is inevitable when you embark on a digital transformation, it isnât insurmountable if you have the right tools. In this article, we review:
The rapid pace of digital disruption is compelling organizations across industries to embark on large-scale technology-driven business transformation. As per a McKinsey survey, 75% of digital transformation efforts fall short of their objectives, with only 16% achieving substantial benefits. One of the main reasons for this failure is the lack of focus on the human side of change. Managing change effectively is critical for the success of any digital transformation initiative.
In this article, we will look at some key change management strategies that can help organizations successfully steer complex transformational programs to achieve the desired business outcomes.
Why Change Management Matters in Digital Transformations
Digital transformation entails a sweeping overhaul of organizational processes, systems, operations and culture. It requires people across the enterprise to work and collaborate in new ways. Adopting new digital capabilities can significantly impact employee mindsets, skills requirements, job roles and responsibilities. In the absence of structured change management, these impacts often lead to resistance, anxiety, lack of engagement and inability to fully leverage the new technologies. Stats show:
-
Only 30% of transformation initiatives are adopted and embraced by employees as per a McKinsey study
-
Procter & Gamble reported a massive 200% productivity improvement in projects where change management principles were applied compared to those without.
This underscores the importance of making change management a strategic priority and not an afterthought in digital transformation programs. When done right, it can accelerate adoption, drive better outcomes and position the organization for continued success.
5 Key Change Management Strategies for Digital Transformations
Here are the top five strategies and best practices that can enable smooth and effective change management throughout an enterprise digital transformation journey
1. Start at the Top with Strong Leadership
The most critical success factor is visible and active leadership commitment. Senior executives need to fully own the change agenda and lead from the front. They should communicate a compelling need for change and paint a clear picture of the expected outcomes. Ongoing leadership messaging helps align the entire company towards shared transformation objectives. According to Prosci research, active and visible executive sponsorship results in a 3.2 times higher program success rate.
2. Analyze Impacts and Engage Early
It is vital to assess how the transformation will impact different employee groups and proactively address their concerns through early engagement. A McKinsey study found that engaging employees early on increases commitment and adoption by 40%. Focus groups, training needs analysis and stakeholder interviews help uncover pain points to be resolved. Targeted change impact assessments also enable customized interventions for each personnel segment.
3. Equip Employees via Training and Support
Lack of knowledge and skills is a key adoption barrier. Employees need to be empowered with training on new digital systems and capabilities being introduced. Efforts should also aim to upgrade their technical competencies and make them future-ready. Ongoing enablement as well as helpdesk support facilitates smooth transition management. Disney recognized the need for reskilling early on and has trained over 40% of their workforce through their Disney Aspire initiative.
4. Communicate, Communicate, Communicate
Consistent, transparent and organization-wide communication is crucial for engagement. Core messages should be delivered across multiple channels – email campaigns, newsletters, intranet, signage and team meetings. Two-way communication channels allow employees to provide feedback and get their queries resolved. ASHP research highlights that construction projects with effective communication are 416% more likely to stay on budget.
5. Embrace Agile Change Management
Digital transformation programs typically follow agile methodology with iterative releases. Change management also needs to be agile and dynamic to keep pace. A flexible framework easily adapts to evolving scenarios versus rigidly following a prescribed plan. Feedback loops help continuously refine the approach. Maintaining a change-ready culture through regular immersions prepares employees for constant change. Agility and responsiveness to shifts will define successful change management.
Driving Successful Change in Digital Transformations
Adopting the above strategies enables organizations to minimize business disruption, accelerate adoption, improve proficiency, boost engagement and deliver maximum ROI from large-scale technology investments. However, the most crucial element is integrating change management into the DNA of the digital transformation program. It must be baked into every stage right from planning to execution through sustenance. The expertise of seasoned change management professionals should be leveraged to provide structured guidance. With this kind of holistic focus on the people side of change, companies can fully leverage new digital capabilities, smoothly transition to future ways of working and build a resilient organization that stays ahead of disruption.
5 âchange management strategies to improve internal adoption
Before you commit to a big digital transformation, you need to have a true understanding of the why. Sit down with key employees and take a close look at whats going well and whats not in your business. Here are some questions you can ask:
- Whatâs the reason for the business change?Â
- Do your employees feel frustrated by your current processes?
- How well does information move through your business?
- Whatâs the competitive landscape?Â
- What are the goals of the digital transformation?
With those answers in hand, explore how new digital tools and better data might benefit your business.
Organizations that fail to formulate a compelling âwhyâ for their digital transformations will have a serious uphill battle ahead of them. Simply protecting your bottom line with flashy new technology wonât be very compelling to employees whose jobs are being completely transformed.
Start at the top
According to McKinsey, a transformation is 5.8 times more likely to be successful at organizations where CEOs communicate a compelling, high-level change story. Itâs not only the employees who will be working with the new technology who need to understand and buy into the change but management as well. Change needs to come from the top.
In 1962, Everett Rogers proposed a theory called the Adoption Curve, which explains how all new innovations gain popularity by first taking root among a small group of tech-enthusiasts (called innovators). Early adopters then bridge the gap between those innovators and the majority. In the case of organizational digital transformation, the early adopters need to be the management teams.
When proposing new technologies to management, be sure to discuss the overall positive impacts of digital transformation on their areas of concern, including reduced task time, improved efficiencies, fewer errors, and lower costs over time.
Top 5 Organizational Change Management Strategies | How to Manage Transformational Change
How do you implement digital transformation?
2. Balancing tech and people in digital transformation If this is your situation, prepare a solid case for change management explaining why the people side of change is key when successfully implementing digital transformation. It is not only about technology—it is also about the people. 3. Integrate project management and change management
What makes a successful digital transformation strategy?
One of the key components of a successful digital transformation strategy is change management. Effective change management is essential for navigating the complexities of digital transformation and ensuring the successful adoption of new technologies and processes.
Is change management a key component of a digital transformation strategy?
Digital transformation has become imperative for organizations to stay competitive and relevant. However, embarking on a digital transformation journey is not without its challenges. One of the key components of a successful digital transformation strategy is change management.
What is digital change management?
Digital change management refers to the process of effectively managing and implementing change within an organization to adapt to the rapidly evolving digital landscape. It involves aligning people, processes, and technology to drive successful digital transformation initiatives.
