How to transform your business

One study found that 69 per cent of the $US1.3 trillion spent on digital transformation last year was wasted.

Business transformation is hard and expensive. A recent Harvard Business Review study found that 69 per cent of the $US1.3 trillion spent on digital transformation last year was wasted. And with major consulting firms citing success rates below 30 per cent, it’s not for the faint-hearted.

The root of the problem is that mature organisations must digitise before they can become digital. Digitising an organisation goes to the heart of how an organisation creates and delivers value — then turns it on its head. After decades of corporate evolution, delivering value today is built on thousands of process fragments stitched together by a tangled web of legacy systems.

Solving the problem presents a dilemma: train existing staff who understand the organisation but lack the skills and cultural mindset that the digital natives tout as critical success factors, or hire external staff with the new skills but limited knowledge of “how things get done around here”.

Organisations tend to choose the latter and it is this approach that can sow the seeds of division, often leading to the transformation being undermined.

There are several issues. The new hires (the change team) typically find the pace frustratingly slow and think the mindset and culture is more constraining than empowering. They struggle to understand how the organisation works, conclude the bureaucracy is designed to impede progress and the existing delivery team (the run team) “doesn’t get it”.

The run team feels overwhelmed. Members are expected to do far more with far less because their budgets have been cut to fund the transformation.

They also assume the change team is being paid more and, when it’s over, the run team will bear the brunt of the job losses.

Unsurprisingly, there is resentment on both sides and unrealistic expectations at the executive level exacerbate the issues.

The pressure builds.

In reality, many of the new roles are more of an evolution than a revolution and it’s easier and faster to train new technical skills than wait for new hires to adjust and adapt.

Bearing this in mind, the key to success is to bring the run team into the transformational tent.

They must lend their subject matter expertise to the change team, free up capacity to retrain staff in the new skills and prepare the groundwork for the transformation by simplifying the existing processes. The change team will need a small number of external hires to anchor the new skills and mindset but their role is also to train and coach the run team in the new skills.

Easy to say, but is it achievable?

There are three steps to make this possible. First and foremost the executive leadership group must acknowledge that the run team and the change team are critical to delivering the transformation. The run team must then implement an operational excellence program to create the necessary capacity. Finally, the run team and change team must develop an understanding of each other’s roles and embed joint accountability. With this approach, the risk and cost will reduce and staff engagement will increase.

What’s more, the likelihood of success may even nudge higher than a coin toss.

Nigel Adams is the founder of Hetton Advisory and author of Match Fit for Transformation.