Digital Transformation: How To Be In The Successful 30%
According to Harvard Business Review (HBR), in 2019, senior executives considered digital transformation projects as being high risk; as their number one concern. This is no surprise because 70% of all digital transformation projects do not reach their intended goals. That means that out of $1.3 trillion spent on digital transformation projects last year, $900 billion went to waste. A question we are asking today: "What was done in the other 30% of digital transformation projects that made them succeed?"
Many experts highlight that it is essential to keep in mind that digital transformation aims to improve corporate performance. A driver of a change is not a digital element on its own, but a business strategy, a vision, or a specific improvement. According to Dan Roman, a senior project manager and a digital transformation expert, lack of vision, goals, and metrics are common pitfalls of weak leadership. Dan highlights that 17% of leaders do not know how to align the business with IT (PMI webinar "The Agile Enterprise: Impact of Digital Transformations on Organizational Agility" by Dan Roman). The leadership team should be able to communicate their vision to employees and explain how digital transformation will help to get there. Clear metrics that support organizational goals should be in place, and a digital transformation team should be regularly reporting on improvements obtained as a result of digital transformation.
A critical element of success is leveraging employees' feedback, rather than having them as a barrier. In every transformational project, people are enablers of change. In the case of a digital transformation, it is common for employees to perceive change as a threat to their job security, and it inevitably leads to resistance. It is critical to prevent fear to prevail and demonstrate that the digital transformation process is an opportunity for employees to upgrade their skill set and align with the future marketplace.
Dan Roman recommends bringing outside consultants specializing in managing change to help organizational leadership get employees' communication precise. In addition to the outside consultants, Behnam Tabrizi, a consulting professor at Stanford University's Department of Management Science and Engineering, reminds us about the importance of leveraging organizational insiders as well. According to Behnam, outsiders may not know what works and what doesn't and instead will try to implement a one-size-fits-all approach. It takes the best of both worlds, external and internal, to ensure that digital transformation is positively perceived and the right people are engaged to provide feedback.
Another successful strategy is establishing cross-functional teams for your digital transformation project. These flat low-hierarchy structures have proven to be very efficient in Silicon Valley start-ups and are also very agile. According to Behnam Tabrizi, it is usually best to put together a cross-functional team with quick access to subject matter experts across the organization, which is somewhat separate from the rest. It is believed to be the best way to avoid hierarchies getting in the way and slow decision making.
In summary, applying the most relevant Agile principles and avoiding common pitfalls of transformational projects will help you as a project manager to navigate through this process.
Here are references to earlier blogs that you may find useful:
“Why Non-tech Corporations Cannot Overlook Agile Practices Any Longer”
“Critical Considerations for Your Organizations Transformation Project”
If you have any questions about this article or would like to share your experience, feel free to post a comment below or contact me directly at [email protected]
—Olga Minikh
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