Employees as Digital Transformation Agents
The rapid rate of adoption of new technologies and the presence of digital disruption virtually in every industry makes it imperative for businesses to become digital. In fact, the majority of companies have attempted digital transformation in one form or another, a process that flows more naturally for digital natives like Airbnb and Uber than for incumbents who may need to leapfrog their legacy value chains. Company leaders are convinced that digital in our times means business continuity, yet the success of digital transformation initiatives has been far from impressive. In a McKinsey Global Survey of companies of different sizes and industries, digitally savvy industries like high-tech, media and telecom reported up to 26 percent success rates of digital transformations, while more traditional ones like automotive, oil & gas, pharma and infrastructure reported success rates between 4 and 11 percent.
While the reasons behind unsuccessful digital transformations can be attributed to a number of factors that may be sector or company specific, an active culprit that may often be ignored is the degree to which employees embody a digital culture. Without a well-informed, trained and incentivized workforce supported by a digital corporate mindset, the positive outcomes of the transformation will be brought to the brink.
Failing to address digital culture specifics early in the strategic planning can not only cause financial and brand damage, but also shatter trust in the leadership’s ability to walk the talk, weaken employee morale and create internal obstacles to the success of future change efforts. There are several key areas that need to be addressed by every company prior to initiating a digital transformation. In this post, I outline several blocks to successful digital transformations in connection with the employees and the corporate culture and also offer tips for going around them to maximize digital impact.
Block #1: The non-digital employee
Non-digital employees devalue the digital enterprise. It is the difficult but imperative task of the leadership to create a digital, well-connected and collaborative workforce. After all, the employee is a key customer who disseminates the brand. Failing to ensure that employee digitalization is a priority in the agenda for digital transformation is a shortcoming that directly threatens business continuity. Yet, a 2017 report by the Conference Board including 500+ interviewed CEOs indicated that only 18% of the interviewees indicated ‘tech-savvy’ among the top skills sought by CEOs and only 20% stated that their organization has a clear understanding of what digital transformation means. (Dennis McCafferty, CIO Insight)
Digital transformation is rightly not all about technology. It is not technology but people who drive digital transformation – thus, it is also about leadership, efficiency, speed and knowledge, which give a business its competitive advantage. In the digital world employees must swiftly and skillfully interact with technologies to complete most of their tasks. This means accessing, processing and applying knowledge at a higher pace than competitive teams delivering a similar customer experience and utilizing new skills, customizing and living the employee experience using the tools that get to the end customer. If the employees do not have the same level of experience in information accessing, connecting, scheduling, sharing and collaborating as the end customers, fully immersing themselves in a digital corporate culture, how can they properly understand and improve the end customer experience?
There is another benefit of increasing employee knowledge - knowledge is a precursor to innovation. The most innovative businesses use their employees as a major generator behind ideas. Knowledge does not necessarily lead to digital disruption but connecting the dots of the learning blocks can.
Action tips:
Evangelize and evangelize until everyone is clear what going digital means.
Put ’tech savvy’ at the top of the agenda of talent management.
Invest in the digital training of your top management team. After all, they will be the harbingers of change and their credibility will depend on how well they understand and develop the digital competencies of the employees.
Do not aim for level 5 technology if your team is at level 1. Focus on the foundation, learn the lessons and pace afterwards.
Start with small steps. Analyze results and reassess, if needed.
Bring in or hire technical evangelists and stars with leadership skills who are eager to be digital growth and quality drivers.
If necessary and possible, create a simulation where shifting groups of employees act as the end customer. This does not mean testing but reliving the customer experience.
For very complex digital transformations: introduce a pilot that is short, likely to be successful and illustrative for the improvements across the board. Get a buy-in, make any necessary adjustments and proceed.
Block #2: Unhealthy rivalry and silos
How many of us have witnessed tensions or information silos between Sales and Marketing teams, Marketing and IT or even Marketing and Strategy teams? I had a client whose Sales department often pointed to Marketing for mistakes or inefficiencies, instead of acknowledging that there was a weak lead funnel management and poor interaction in place between the two departments, which were in turn fueled by other departments in the organization who had their own preferences and interests. It can be difficult enough to resolve potential conflicts within one’s own department or team; when you add to this the complexity of inter-team conflicts and interests any change and transformation can go down the drain. It comes as no surprise that I have also observed finger-pointing teams unite in the face of upcoming change and transformation and try to stifle the progress.
A client of mine had given limited access to valuable employee information to its HR team due to confidentiality concerns and had instead entrusted this role to Accounting. The HR team was young and still in training, while the Accounting team had a long history of trust with the CEO. As a result, the HR team did not have a full view of the employees and it was difficult for them to design and execute a high-quality employee retention and development strategy, or to make proper analyses. After being given access to vital information, the HR team started thriving, not only because now they had access to a number of new scenarios and analyses, but also due to the acknowledgment of trust. As one can imagine, the scale of impact of hidden or obvious silos become tenfold in big data, digital environments.
Another challenge that hampers digital performance comes with ownership of digital tools and media. For example, if Marketing manages social media pages but fails to coordinate with Customer Service on key employee interactions and requests, existing customer ratings can plummet together with a dip in the performance of the Customer Service team.
Action tips:
Identify potential functional and departmental silos that would jeopardize extracting the full benefit of digital transformation. Between which teams and why? Create an action plan to address these.
Ensure that all employees are aware that they represent the entire brand and not a single department, and that any actions traced to reduce the performance of another team will have repercussions on their team’s overall performance. Inspire but measure with the right metrics, so that there are no question marks when it comes to cause-and-effect scenarios.
Build in full-time digital functions that are responsible for information exchange between specific teams and whose goal is to ensure informational and ‘’lessons learned’’ exchange across specific departments. Or have a person in each team who is responsible for all interactions and joint efforts with the other team.
Design performance objectives that are partially dependent on cross-interactions with other departments and factor in their digital interactions across different platforms.
Design a collaborative workspace across all layers starting from office layout and space.
Do not let a single group steer the transformation process. Have a matrix-like structure that involves people from all teams and fosters interaction and learning lessons from the experiences of each team.
Block #3: Non-collaborative corporate culture
Collaboration of ideas, information and work effort toward a common goal drives business growth. The benefits of collaboration at the digital enterprise can grow exponentially via use of technology. Yet digital transformation will not change with a magic wand a corporate culture that lacks collaboration and team spirit, nor will it disperse inter- or intra-departmental silos. It is up to the leadership team to acknowledge the gaps in the culture and address these rigorously and at the right time.
How can the leadership team ensure a shift toward a culture of sharing through internal initiatives and can this be supported with the right digital technologies? Creating restrictions to the ability to access and share information means a downward spiral; yet many enterprises fear the loss more than a gain of an equal impact, giving rise to employee disempowerment, insufficient digital mobility and flexibility, and a widening knowledge gap in the workforce. Some enterprises even consider going digital to be a risk for the business. While this risk may be realistic, the benefits from full digitalization far outweigh the risks.
Digital must happen at all levels! The whole organization must go digital to have a digital transformation, not just key teams, employees and management. Strictly hierarchical corporate cultures behind tight firewalls do not deliver the right ground for the dissemination and utilization of information.
Action tips:
Calculate the benefits of digitalization and the risk damages from data breaches.
Replace data and content restrictions with legal contracts, data security experts and regular interactive sessions and workshops on data security. Have a well-trained incident management team to quickly minimize damage where possible.
Ensure the stable foundation of a digital culture before starting to use the technology by studying and training people in the context of the new technologies. Create a list of questions to address:
- How can my leadership team ensure a shift towards a culture of sharing and collaboration?
- What should digital culture look like at my company? What are best practices at digital market leaders that the top management team should consider and are they relevant and necessary?
- How do people in my company access and process information? How do they connect and collaborate?
- What is the level and quality of interaction on the team, department and inter-departmental level?
- How do I make sure that different interests and objectives over the use of the same digital tools are addressed quickly and without conflict across departments?
Block #4: Unmotivated, change-resistant employees
Technology is an enabler but the employees are the drivers of digital transformation. There is nothing more damaging to business growth than an unmotivated workforce. No matter how well-educated, skilled and efficient your employees can be, it is the application and not the cultivation of knowledge that matters. A highly engaged work force believes in and thrives with a common goal.
Action tips:
After you have designed the digital transformation strategy and laid out the strategic map with the management team, initiate a series of dialogs with all employees via video conferences, workshops or what would be the most effective way of communication. Be clear about what you want to achieve in terms of the end goal, the path and the tools to get there. Instead of throwing the digital transformation strategy at them and asking them to perform, or informing them only of bits and pieces that are their responsibility, listen to what they have to say.
By communicating with your employees early on in the process, you will not only get a fuller picture of the potential resistance, team dynamics, interests and motivation levels, but also of the potential risks for the success of the initiative that you need to add to your risk management plan. There is another very important purpose for having constant dialogues with employees – to give them a sense of belonging and contributing to the whole, instead of just following the top management’s strategy. Many studies have iterated findings that when generally passive and unmotivated employees actively become part of the discussions and decision making, their commitment grows, overall results improve and change is more sustainable.
Communicate the need for change in a strong, memorable way. Include a message of urgency that this is the only way for the business to survive and move forward, especially when the times for the business are bad. Without an obvious and realistic threat, there is a strong chance that employees will stick to the old habits and be complacent.
Create or realign incentives for the team to perform as desired and demonstrate benefits for the employees joining the change. Follow the motivation, mental state and performance of employees during and after each milestone while ensuring that traction and pace continue. Reinforce digital behavior and team spirit.
Pay special attention to the likely change-resistance agents. For example, in Marketing and Sales the mastering of specialized digital skills and tools such as content generation and management, e-commerce and social media management, VoC analysis, data measurement is imperative. A legacy model of repeating what has formerly driven success permeates many organizations, but with today’s digital disruption many legacy methods no longer achieve desired results.
Last but not least… If in doubt or lacking the right resources, hire external experts in change and digital transformation to help you steer the process.