As per a McKinsey survey of organisations pursuing digital transformations, more than seven in ten survey respondents say the progress of these efforts has slowed or derailed at some point.
There is a widespread assumption that external pressures, such as market disruptions or regulatory changes are the major reasons for stalled digital initiatives.
But as per the McKinsey survey, more than 60 percent of respondents who report stalled digital transformations attribute the problem to factors that are internal. And with the right discipline and focus—organisations can control these factors in the near term to medium term.
More commonly reported sources of derailed progress include resourcing issues, lack of clarity or alignment on a company’s digital strategy, and poor quality of the digital strategy to begin with.
Notwithstanding the possibility of external disruption, certain actions may help organisations overcome, or even avoid, a stalling of their digital momentum.
Based on my experience of delivering some challenging transformation programs across a variety of client verticals, sizes and geographies, below are 7 important suggestions on launching or relaunching stalled transformation initiatives.
1. Drive your transformation agenda from the top
The commitment of your top management, including board-level sponsorship, is key to drive the transformation mindset and culture in your organisation. If the top management cannot lead by example and embrace change in culture, mindset and operating model, then it is unfair to expect your middle management and lower management to embrace the change brought in by the transformation. Top management should ensure a governance framework to passionately monitor, measure, and track value throughout their transformation. The value should be the thread that links your business strategy and your transformation together. Take time to be explicit about exactly how you intend to create value. Then establish strong, clear connections to your execution plans.
A large European manufacturing company, had not changed or transformed for over 10+ years but once the CEO set a new direction, then it trickled all the way to the bottom, and everyone was behind the change.
2. Review and recalibrate the transformation business case
Any stalled transformation initiatives that have been dormant for 6 months or more may not be coming back in the same condition it was when the program was put on hold.
It is certainly possible that benefits that were thought to have existed during kick-off may have vanished/changed significantly as companies are often forced to put in place new business practices to meet the changing market dynamics. Organisations, especially Finance experts, should revisit their business case to validate that the potential benefits are still intact or to recalibrate and identify the capabilities that are now required to enable your business transformation. Building a strong foundation for your business case has always been considered a critical success factor. Before you relaunch the stalled transformation, it is absolutely critical not to overlook this step.
For the same European manufacturing company, we created a detailed business case based on current financials and the maturity of the market in automating some of the mundane repetitive tasks. The business case benefits generated significant interest at the top management and secured their commitment to sponsor the transformation.
3. Ensure you have the right talent to drive the transformation initiative from the front
One of the main reasons for transformation initiatives to stall or fail is not having the right skilled resources. Before embarking on the transformation journey, it is important to do a detailed analysis of the type of skills and people that would be required in the lead and supporting roles. A competency assessment would be best suited to identify the training needs customised for each individual.
Investing early in up skilling your resources before kicking-off or relaunching the transformation agenda would help you meet the objectives and timelines.
During my tenure for a leading high street bank in the UK, the incumbent teams did not have the required skill sets and competencies to deliver the transformation agenda. I was brought in along with other subject matter experts to drive the transformation and help up skill the internal teams to ensure in long term, they are able to support the bank’s transformation agenda.
4. Establish a communication strategy and maintain transparency across all levels
Many organisations overlook the importance of a well-designed communication strategy for their transformation program.
Communication is a critical component of change management in any enterprise transformation. It can help build a level of trust and effective communication, giving the right level of detail as early as possible, will ensure that all stakeholders fully understand the transformation, rationale, and potential impact. Build a culture of transparency on your transformation program so that there is an open conversation across the organisation and there isn’t any feeling of management hiding information or middle and lower management do not get a feeling that they don’t understand what the top management is up to.
During my role, while leading a complex transformation program for a UK-based media company, we ensured that a formal communication strategy was created to provide regular updates across all stakeholders in the organisation including the supervisory board.
5. Do not start with a big bang approach, identify low hanging fruits to test the waters
One of the common mistakes I have seen companies make is trying to go big bang with their transformation initiatives. Transformation programs can last for several years/months and it is important to build confidence in the team and the management by identifying quick wins or low-hanging fruits as they are called, to test the waters. This becomes more critical if your transformation initiative has come to a stall and needs to be restarted on a positive note. By delivering some immediate benefits on those low-hanging fruits, you not only learn from your experiences but at the same time reduce the risk of making costly mistakes that could potentially lead to stalling the initiative again or demoralising the team who could eventually lose interest in delivering the transformation.
An example that comes to my mind is a leading UK retail business that wanted to build an augmented reality (AR) based service to enhance the shopping experience of their customers. As in most e-commerce businesses, there could be as high as 25% to 40% returns for products purchased online. So rather than trying to launch all products with AR capabilities, it was important to extend the functionality to a few popular product lines and test if the revenue was growing while reducing the returns to enhance profitability before extending it across all major product lines.
6. Avoid putting the cart before the horse
In the modern world, technology plays an important role and is pivotal to any transformation. However, one of the other common mistakes organisations make is to select the technology first and then try to retrofit your transformation agenda/goals into the selected technology. In most cases, the workaround to retrofit can erode any benefits and instead of simplifying the experience, organisations make it more complicated.
To avoid getting into this situation, it is best advised that let the transformation agenda and goals define your requirements and based on these requirements find the apt technology solution. In case you have selected a technology solution that is no longer fit for purpose, seek legal help to identify ways to exit the contract and in case you cannot exit the contract due to steep penalties, look for solutions that can deliver the functionality by integrating seamlessly with the chosen solution.
The top-of-mind example that I have seen is in large global organisations that do not take into consideration local nuances or requirements and try to enforce something centrally. Though standardisation is a good practice when making decisions ensure local requirements are taken into consideration before making any technology-related decisions based purely on discounts offered by the vendor to put pressure on signing a contract before a set deadline.
7. Invest in deploying collaboration tool
In the majority of the organisations, there are geographically dispersed teams and could be working in different time zones. This does command the use of collaboration tools to make the process efficient and transparent. There are several collaboration tools such as Slack, Trello, Microsoft Teams, to name a few that if used well can promote a culture of close collaboration. Though email is an essential part of office productivity tools, exchanging all information over emails for transformation programs is not efficient and moreover difficult to manage.
Online collaboration gives team members the tools they need to work with others from any location. This drastically enhances productivity and provides transparency to the transformation team. If any transformation program-related KPIs / statistics can be regularly published on the collaboration tool, it helps boost the morale of the team and promote a culture of continuous improvement. A research study by Deloitte found that three-quarters of those surveyed believed access to collaboration tools can significantly improve productivity levels by as much as 20-25%.
If a transformation stalls, organisations can regain momentum by following the 7 suggestions defined above. It is worth remembering that the steps are not defined in any order of priority and each one of them has a pivotal role to play in the success of your transformation journey.
Leaders have to anticipate and own transformation—celebrate success but also learn from mistakes, do a root cause analysis and implement preventive measures.