5 key reasons why digital transformations in organisations fail

Change in companies is difficult at the best of times; change that involves replacing old ways of doing things with new digital alternatives is even tougher.

Change in companies is difficult at the best of times; change that involves replacing 'old ways of doing things' with new digital alternatives, is even tougher.

You may be tempted to think that a digital transformation at your organisation will solve many of your problems, but in my experience, and the advice from countless consultants that work in this field - taking your company on a new, digital route requires far more than just the introduction of the technology itself.

So why do most attempts at digital transformation fail and what can you do about it?

Here are our top 5 reasons that you digital dreams may not deliver the value that you had hoped for:

Reason #1: There is no big picture vision of what the transformation will create.

People are reluctant to change unless you offer them a compelling reason to embark on change.

That 'reason for change' could either be a vivid promise of a compelling new future for everyone, or the threat of imminent demise. Hope and fear are powerful elixirs of change.

Either way - there needs to be a good reason to change that speaks to the hearts of the people that need to go through that change.

Facts on a PowerPoint presentation are not good enough; a great story, in the form of a vision, that connects with people's emotions is really required here.

The classic example of exactly such a vision, is JFK's 'Moon' speech - which inspired a nation to deliver the impossible idea of landing a man on the moon within a decade.

Reason #2: Leadership and senior management are not fully onboard with the transformation

Technology doesn't create new value for an organisation on its own.

Strong leadership that is skilled at leveraging new technology, to drive new business growth, is what actually creates value for companies that choose to holistically transform.

Unless senior leadership is fully-engaged and committed to leading the company through this process and towards the new vision - you'll have implementation problems.

The solution here is that senior leadership need to spend time personally absorbing the business value of the transformation themselves before rolling out the change to the rest of the organisation. Unless leadership believes in the change, nobody else will.

Reason #3: Technology is seen as something only the IT department does

If you think that simply hiring a strong CIO / CTO to push your digital transformation agenda is going to be enough; you'd be wrong.

A digital transformation needs to be carefully coupled with your key business objectives - and fully-integrated into your business systems and processes if it is going to be successful.

Leaving it to the IT department alone to implement - is a recipe for failure.

Having said that however, if the IT department is not completely involved and championing the change required, you've got problems.

The sweet spot is to have IT and business working hand-in-hand throughout the process. Business needs to develop a sharp understanding of IT and IT needs to deliver on key business objectives. If the two talk different languages, you have an important barrier to overcome.

Reason #4: Trying to digitally transform too much of the business

Digital transformation doesn't require that your business is now on a path to be the next Tencent. You don't need to undergo a radical transformation of your entire business model in order to tick the digital box.

Start small - in just one area of the business.

Start with starting to adopt an online project management tool like Trello; or upgrade to sharing via Slack at first.

Experiment in one area of the business and use the momentum of success to drive sustainable change in other parts of the organisation as you gain confidence and evidence of success.

Reason #5: A lack of coaching and communication

Change and especially digital transformations requires lots of talking, sharing, handholding and coaching of staff by senior leadership. You can't just drop the technology onto people and expect them to simply adopt it for themselves successfully.

Successful adoption of 'new ways of being' as an organisation takes time and lots of open and honest communication.

For many organisations, a digital transformation will require a significant shift in culture, which takes persistence, skill and a conscious effort to reform collective organisational behaviour into new preferable patterns.

Every organisation is different and the process of undergoing a digital transformation will manifest itself in unique ways.

These are the most common pitfalls when it comes to embarking on a transformational journey involving the adoption of new technologies - most of which have nothing to do with technology, but rather are very much about people and how they think and behave.  

So the consensus is that digital transformation in organisations is very much about people - those soft, sensitive, emotional things that actually create value through their energy, ideas, actions and focus.

Further reading:

Unlocking success in digital transformations
Digital transformations are even more difficult than traditional change efforts to pull off. But the results from the most effective transformations point to five factors for success.
Busting the myths of digital transformation - The Digital Transformation People
Many leaders, guided by pre-digital assumptions or listening to less-than-thoughtful, “experts,” are buying into dangerous digital transformation myths.
What Role Does Digital Transformation Have On A Company’s Value?
What role does digital transformation have on a company and its value? Answer by Tim Koller, Partner at McKinsey & Company, Corporate Finance Practice.