Putting the Human in Digital Transformation, Part I

Posted September 27, 2018 | Leadership |
Photo by Anthony DeRosa

Back in the early 1990s, William Gibson, the science fiction writer, author of Neuromancer, and originator of the term “cyberspace,” stated, “The future is already here — it’s just not evenly distributed.” This predates the widespread consumer adoption of the Internet, the cloud, much of machine learning, and the rise of the FANG companies (Facebook, Amazon, Netflix, and Google). Gibson neatly summarizes the reality of innovation, which, like evolution itself, can operate at different speeds within different environments and in response to different stimuli. The “unevenness” of the future creates the possibility for all but the trailblazers and inventors to observe what has already been tried and tested in an alternative domain, and to learn lessons from the leading edge.

Unfortunately, this learning opportunity is all too often ignored. Time and again we see examples of organizations applying approaches and technologies that have already been superseded or discredited by true digital leaders, with all-too-predictable consequences. In the post-mortems carried out on these failed, or at best suboptimal initiatives, the focus tends to be on failures within the technology domain. However, we believe that this is often a lazy hypothesis.

A significant proportion of failures to realize the anticipated value from digital transformations can be directly traced to failure to appreciate and address human behavior associated with the transformation. We believe that, when driving digital transformation, human behavior should be paid at least as much attention as the technology itself.

Digital is proving to be genuinely transformative — even within companies that were originally skeptical — but genuinely transformational change is hard. Recent studies show that 84% of digital transformation initiatives fail, often despite the rigorous application of “best practice.” Assuming the right digital technology has been identified to successfully create the potential for transformation, there are still significant hurdles to overcome, including:

  1. Inadequate attention to human behavior

  2. Uneven delivery focus and inappropriate controls to deliver technology enablers

  3. False assumptions

We introduce these hurdles in this Advisor, and explore the ways organizations can truly engage their people by understanding their behaviors and, consequently, ensure that they undergo successful digital change.

Inadequate Attention to Human Behavior

The last 20 years have seen the identification and explanation of a wide range of insight into human behavior, and especially our “predictably irrational” reactions to external factors. Unfortunately, much of this insight has not yet become common practice when businesses undertake transformation, with people often still perceived as ultrarational, calculating “machines.” Some common oversights include:

  • Inadequate attention is given to the people directly affected by the change and their psychological journeys.

  • Not sufficiently communicating or understanding the underlying organizational challenges that lead to the proposed change, so people fail to understand the damaging consequences of protecting the status quo.

  • A resistance to change — for individual and often deeply personal reasons. For example, the change may impact processes and ways of working that have delivered successful careers (i.e., the change impacts their professional “defensible turf”).

  • People are not adequately or effectively supported during the transition as they give up the old ways and adopt new ways of working. In fact, the need to “stop doing something old to start doing something new” is still often overlooked, despite Voltaire’s perceptive observations over 250 years ago.

Uneven Delivery Focus and Inappropriate Controls to Deliver Technology Enablers

While we believe that mastering human behavior is the biggest determinant of success in digital transformation, there are still a number of significant issues in how we deliver the technology enablers, which are the foundations that can be leveraged as part of transformation:

  • Over-reliance on waterfall methodologies and milestone tracking — not all problems are known or even knowable during upfront planning, and as the military has known for over a century (as attributed to German Field Marshal Moltke the Elder), “No plan survives first contact with the enemy.”

  • Misrepresenting Agile, or not correctly applying the principles originally defined in the Agile Manifesto — but instead focusing on the hype and ceremony of Agile, which can lead to well-intentioned teams following superficially agile processes, but ultimately failing to deliver.

  • Working toward a single “gold-standard” technology release at the end of the project, on the assumption that people will automatically use it, and then declaring premature victory. This is often accompanied by limited or non-existent interaction with actual users or customers during development or configuration.

  • Assuming that initial specifications are accurate and immutable, when the reality is that they are an imprecise estimation of needs at a point in time, which will inevitably evolve and adapt during the project’s life cycle.

False Assumptions

The foundations of many corporate transformations are often fundamentally flawed from the outset, due to the pervasive adoption of false assumptions, which can cause projects to persist long after all rational evidence is pointing to failure:

  • The proposed solution is treating superficial symptoms, with delivery teams believing they are “right” and not curing the underlying root cause (which generates constant frustration with directly impacted staff and people on the ground).

  • A culture in which “failure” is unacceptable rather than seeing failure as a learning opportunity.

  • Initiatives and projects that become “too big to fail,” especially when they are tied to internal politics or the personal career aspirations of senior executives.

So Where Should Organizations Start?

Over the last 25 years, a large body of excellent research and published approaches and methodologies has identified key enablers to deliver successful change. We have reviewed and synthesized a wide range of these frameworks and concluded that the following six enablers are critical to driving successful digital transformation efforts:

  1. Empowerment to action — we have authority to do what is needed.

  2. Aligned vision — we understand and are committed to what needs to be done.

  3. Engaged leadership — we are supported, guided, and protected.

  4. Tolerance for failure — we accept that to achieve success, sometimes you need to fail fast, fail smart, and keep going.

  5. Tangible incentives — we have appropriate reward systems in place for success.

  6. Belief it can be done — we know we can get the job done.

At face value, these enablers do not, of themselves, provide a roadmap for success. Many of them only address part of the challenge. However, we feel that they can be unified into a powerful toolkit to facilitate successful transformation, when assessed against three specific personas and observed through three distinct lenses. In our next Advisor, we will explore these personas and lenses, and delve deeper into the human side of digital transformation.

Like what you read? Want to hear more from Greg Smith?

Watch The Great Enablers of Genuine Digital Transformation, on-demand. If watching it inspires questions, drop us a line right now, and we'll connect you with Greg!



About The Author
Greg Smith
Greg Smith is a Cutter Fellow and Managing Partner of Arthur D. Little (ADL). He founded and co-leads ADL's Digital Problem Solving practice and is a member of ADL's Executive Committee, where he has responsibility for ADL's global innovation strategy. His work focuses on business strategy in the context of digital transformation as well as the application of disruptive information technologies in solving intractable business problems in major… Read More
Mandeep Dhillon
Mandeep Dhillon enjoys problem solving by combining traditional management consulting techniques with insights from design thinking, emerging technology patterns and business innovation across different sectors. Since 2015, Mandeep has supported leading players in education, specialty chemicals, medtech, private equity and transportation in a wide range of problem-solving areas, ranging from business and commercialization strategy to operating… Read More
Raf Postepski
Raf Postepski is a Cutter Expert; a manager at Arthur D. Little (ADL), London; and a member of ADL’s Digital Problem Solving practice. He has experience in managing complex programs across all stakeholder levels within various industries, including entertainment, e-commerce, technology, pharmaceuticals, and manufacturing. Mr. Postepski focuses on digital strategy and transformation, behavioral change, agility, and target operating model design. … Read More
Chandler Hatton
Chandler Elizabeth Hatton is a Manager at Arthur D. Little (ADL), Amsterdam, and a member of ADL’s Technology & Innovation Management and Strategy & Organization practices. Previously, she served as CTO of SimGas, an innovative design and production company that offers small-scale biogas systems to customers in subtropical regions. Ms. Hatton has an engineering background and holds a dual bachelor of science degree in mechanical… Read More
Liam Collis
Liam Collis is a consultant with Cutter’s Data Analytics & Digital Technologies and Business Technology & Digital Transformation Strategies practices. He has eight years of consulting experience covering a wide range of business and digital transformation. Recent project/roles have included Lead Strategy Analyst for a FTSE 100 gaming company on a number of breakthrough projects aimed at building competitive advantage and a regenerative… Read More