The pitfalls of digital transformation
Whether it’s managing a pandemic, dealing with the labour shortage, connecting with consumers whose habits are changing, or simply optimizing operations, digital transformation is (still) on the agenda for most organizations. From SMEs to multinationals, few can get away without it.
My team and I work in partnership with many organizations, and our role is to support them wherever they are on the path to digitization. In that role, we’ve seen a wide range of management styles—and, take it from me, there are as many forms of digital transformation as there are companies. That said, we’ve also seen some very clear patterns, which have allowed us to better understand the digital pitfalls organizations fall into out of a sense of urgency to get something—anything—done.
I wanted to share with you the five biggest pitfalls we encounter on a regular basis in our mandates.
#1 – Over-focusing on technology
Organizational transformation is an idea that has been popping up in managerial textbooks since the early 1900s. Somewhere along the way we added the word “digital,” and suddenly technology began to take centre stage. “What technology do I need for my ebusiness?” is often the first question managers ask, even before we’ve figured out what needs to be transformed… let alone if starting an ebusiness is a priority.
We shouldn’t even be thinking about technology until we’ve discussed tactics and an implementation plan. Technology is the effect of transformation, not the cause. As a manager, you should first focus on what you want to transform, and let the experts find the technology that will get the job done.
#2 – Not being strategic enough
Organizations have a habit of treating digital like an easy way to optimize their current processes, as opposed to a variable that can transform an organization’s business models and vision. Yet looking at ways to digitize the customer journey, inject a factory with 4.0 values, or develop an ebusiness site can all have a profound influence on your organization. Digitization can affect your relationships with clients, the creative process of your product/service, and even the people you work with.
If your digital transformation is done properly, it can even help you to create new business opportunities!
By not exploring digital transformation to the fullest, organizations run the risk of optimizing processes that do not fit their vision, mission, or future business models.
#3 – Leaders who lack the right tools
Excluding multinationals, the digital transformation of SMEs usually falls under the responsibility of various members of senior management: the CTO, CMO, CFO, COO, or even the CEO. And that’s if a manager at this level decides to take on the role at all! Here’s what this signals: Managers do not know who to pass this hot-potato file to, and give it to the leader who appears to have the best tools for the job. Yet you would only entrust your company’s finances to the CFO, or management to the CMO.
At first glance, the CTO seems like the ideal candidate to take on your digital file. But as talented as this person may be, they often have very technical experience, which may lead to issue #1 above: focusing too much on technology. Then there’s the CMO, whose job centres around relationships with the organization’s clients, although that risks creating a rift between operational needs and client expectations.
Organizations need a leader who not only has the expertise, but also the time to devote to the project, and is able to support their colleagues to analyze, understand, and structure the company’s digital needs. Although this may seem like a significant expense up front, it is an investment that will pay off in the long run.
#4 – A company culture based around projects
If your organization has been around a long time, you probably already have plenty of procedures in place to generate revenue—maybe even a reasonably predictable EBITDA year after year. You optimize your structure like this: Your employees have a specific role to play, which takes up pretty much 40 hours every week. There’s little wiggle room or time for anything else.
Yet these are the same employees you’re expecting will help operationalize your digital transformation—often without investing in the project, providing additional training, or allotting extra time to get this new project up and running. Not only do these employees often find themselves out of their comfort zones, they also lack the expertise and tools to fulfill this new mandate. And that’s on top of trying to get their 9-to-5 workday done.
#5 – Lack of training
As mentioned above, the demand for digital expertise is increasing faster than academic training can keep up. And the impact is pretty significant. Organizations are having to hire from a small selection of qualified candidates, leading to fierce competition—especially when it comes to salary. If an organization is just starting to look for the resources they need to start their transformation, it’s already too late. And besides, any new digital expert stepping into a traditional workplace won’t stick around long if the company hasn’t done the groundwork needed to embark on digital change. That’s why training your teams from the top down to take on digital transformation projects—a task that’s often severely underestimated—becomes key to ensuring your success.
In conclusion, even if you’re feeling the pressure to get something done, you can’t just dive headfirst into digital projects. It may seem like a good way to ease the pressure, but you’re most certainly going to make a lot of big mistakes.
Take a step back, be strategic, get your teams onboard, find the right resources, don’t underestimate the importance of training, and give yourself the time you need to ensure the job is done right.