Beyond Digital Transformation Part 2 – The People Dimension

The people dimension of any organisation is complex at the best of times, but during a transformational period, it becomes far more complex, with so many elements that need careful exploration.

Where are decisions made?

The first question to ask is, who is setting the transformational goals? The obvious ‘right answer’ is the ‘business,’ but there are so many different perspectives to consider. The art of truly successful
transformation is recognising all these perspectives and harmonising them.

Too often, ‘digital transformation,’ because it is technology-driven, is seen as an IT-owned exercise. Look around the ecosystem of organisations offering ‘digital transformation services,’ and, when you scratch the surface, you find technology firms. This is perhaps the biggest issue that derails such programmes because as soon as they become owned or driven by one function, they risk diverting from the overall objectives. The focus needs to shift from digital to business transformation; otherwise, we risk simply ending up with digital upgrades.

There needs to be an overarching agreement between everybody on why the transformation is being undertaken, and this agreement needs to be the touchstone to which the work returns on a regular basis. Digital transformation is not about changing the technology; it is about transforming the organisation.

Is the C-Suite in harmony?

It has long been said that the C-Suite should drive successful transformation. If the question of why we are doing this is answered at that level, then the answer will embrace the whole organisation. Sounds simple.

However, even within the C-Suite, there are competing viewpoints, with the CEO, CFO, CMO, and CIO having potentially different perspectives on what transformation means to their organisation, irrespective of the underlying driver.

It is imperative that the overall strategy is understood from all perspectives and shared across the organisation at all levels. A C-suite-driven transformation will fail as surely as an IT-driven transformation if it is not bought into by everyone.

In recent years, there has been a drive for CIOs to gain a seat at the table, i.e., to join the C-Suite. Whilst this does provide a technology-oriented view at the highest level, it does not solve the problem of harmonising all the points of view. In many ways, it simply adds another perspective to the mix and it is often the case that the CIO is not the person to bring harmony to this mix of views. To harmonise there needs to be a role that draws all of the disparate views together into a single, cohesive strategy.

In addition to the competing viewpoints, data suggests that only one-third of digital transformation strategies are actually set within the Board Room, with the majority being set by the IT function and a small percentage being specifically driven by a particular business area to meet its own needs.

The worst-case scenario is multiple, sometimes conflicting, programmes of work underway that may derail each other or create competition for resources.

How can we transform without a single, clear vision that everyone understands? If we cannot clearly articulate the why of a transformation, then we have no possibility of succeeding because we have no clear goal.

Do we have the right people?

Transformation requires a different thought process to business as usual and often requires quite different skill sets, especially on the technology side. However, outsourcing this to a third party is rarely an effective answer as this means that, after any technological change, the skills will leave the business. Successful transformational organisations understand how to leverage external expertise but ensure that the relevant knowledge remains in-house.

The other key difference between successful transformational organisations and others is that they apply equal importance to the process and people change as they do to the technology change and will also use external expertise to drive these elements forward. Examination of failed digital transformations highlights that technology is rarely the issue. The most common factors that derailed these initiatives were the inability to effectively manage and develop modern technology going forward and the lack of organisational change.

Ensuring the right people, both internal and external, are involved is critical.

Who sets the approach?

Any strategy that does not effectively unify business and technology and accounts for all perspectives is likely to fail, but there are different ways to achieve this. Most successful transformation projects have benefitted from external advice and guidance at all levels. Using a Strategy Advisor is an effective way to unify the multiple strands present in any digital transformation. Finding expert skills to explore processes and technology in conjunction with existing teams is equally effective.

However, that does not mean any digital transformation using partners will succeed. In fact, evidence suggests the opposite is true. Recent research by the Cloud Industry Forum suggests that many organisations are discontented with their partners and see them as a reason for transformational failure. Why is this? Partners will, all too often, have playbooks or stories from the trenches and will always seek to set an agenda that suits their P&L by repetitive, known approaches. It is hard to find the balance between a partner with their own agenda and one who will simply bend to the organisation’s will and, therefore, be expensive.

Successful transformations often use an Advisor during the strategy definition and retain that advisor as an external Programme Manager in a part-time governance role over an extended period. They then select a range of delivery partners for specific elements of the ‘how.’ This approach means the right delivery partners can use their methods and gain efficiencies, but they cannot dictate the overall programme, which is still owned in the right place. This approach will also lead to cost efficiencies as using multiple specialists and containing their remit will result in more agile and efficient execution.

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