A decade ago, a McKinsey study found 65% of the senior executives surveyed were only “somewhat,” “a little,” or “not at all” confident that the decisions they were making stimulated innovative thinking.
A more recent Oxford Economics study found only 16% of the companies it surveyed qualified as “Digital Winners” leading in transformation.
What the above research points to is that encouraging innovation is not easy and that 84% of companies are challenged with their digital transformation. If we dig a little deeper as to why organizations are challenged with digital transformation it’s not the technology it’s the people.
Many CIOs and CEOs admit that they underestimate the amount of work needed to engage their workforce to embrace digital transformation.
As companies have moved from legacy systems to cloud integration the focus has been mostly on the technology. The 16% of companies that are successful with digital transformation have mastered the key factor of technology integration – change leadership.
Change leadership is needed
Each time that a new technology system is introduced into the organization it is a change. Successful digital transformation happens when a change leadership approach is used alongside the technology project.
Psychologically when a change happens people respond in one of three ways: fear, push back or position for power.
It’s not that people are trying to sabotage new technology such as automation, AI or robotics; it is that they are responding with normal fear about the uncertainty of what it means to them.
The best leaders recognize that they must address the natural human fears about change and address them.
CIOs and CEOs need to provide the leadership skills so that managers can lead change and inspire teams to go along with technological innovation.
Involve stakeholders early
In any successful project a key component is to engage stakeholders early on in order to build cheerleaders and change champions within the culture. With digital transformation, the best way to ensure easy uptake of new technology integration is to include leaders and identified team members early on.
A municipal CIO we recently worked with shared a story where she failed miserably when implementing a new CRM system for the city. She thought that by focusing on the technology and what it could do everyone would embrace it and run with it. After the CRM launch she found that only 10% of the teams were using the system. Many workers refused to use it because they did not see how it was better than the legacy system they had been using.
The good news is that she learned from that situation and moving forward, she changed her approach. For her next major system change she met with the leaders of each department one on one and interviewed them to ask what their pain points were with the current system. From there, she asked each leader to identify a change champion within their team. The CIO then met with the change champions and surveyed them on their department challenges and for a wish list of what a new technology should do.
Prior to launching the new system, the CIO had the change champions meet with their departments and cheerlead the new technology, answer department specific questions and engage teams to be ready for the upcoming changes.
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Along the entire project timeline, the CIO ensured that the department leaders and change champions were celebrating key milestones within the technology integration process.
People first approach is key
In the 90s and early 2000s the push to upgrade technology was a big focus for business. CIOs and IT leaders were tasked with ensuring that technological transformation happened quickly. The result was that many companies did upgrade their digital systems, but it came at the expense of the people.
Even today, many people in organizations are now change weary and burned out by continual technological changes.
Moving forward CEOs and CIOs need to start with a “people first” mentality. With the unemployment rate at an all-time low the risk of not focusing on people first is to lose talented people.
The very first question when focused on digital transformation needs to be:
How is this new technology/system/upgrade going to impact people (customers and employees)?
If digital transformation is focused on that question then there is almost guaranteed success. When the focus is on “how fast can we implement this new system,” things can go awry because people are not the primary focus.
Digital transformation takes everyone
In the past digital transformation was seen as an IT initiative, just as people were seen as an HR focus. Now and especially in the future as automation accelerates, workers across all departments will need to see technology integration and a focus on people as priorities for everyone in the company.
In the future of work there needs to be cross department synergy.
Picture a future where people within a company eagerly anticipate change, want to drive change and are not threatened by ongoing technological innovation. That future can only happen with a dual focus on people first and technology second.